Do you have these 3 legal documents?

You work hard to build savings for the future so you can enjoy a comfortable retirement and leave something for your children, grandchildren, or other heirs. In addition to focusing on the value of your assets, it’s also important to pay attention to the legal aspects of long-term financial planning.

3 essential legal documents

The following documents are instrumental in helping ensure your wishes are fulfilled in the way you want — a key part of making the most of your life’s work.

1. Will – A will specifies how you want your estate (your property, money, and other assets) to be distributed after you die. A will can also indicate special instructions, such as naming guardians for your minor children, describing your desired funeral arrangements, or directing charitable gifts to causes that matter to you. You will choose someone to serve as executor of your will, and that person is responsible for fulfilling the instructions outlined in the will.
2. Durable Powers of Attorney (DPOAs) – There are different kinds of durable power of attorney.
• You can name a DPOA for Finances to appoint someone to make financial and legal decisions for you if you become unable to do so.
• You can also name a DPOA for Health Care to appoint someone to be your health care proxy. This person can make health care decisions for you if you are unable to communicate consent or make decisions for yourself. In addition to naming a DPOA for Health Care, you may also want to prepare a Living Will, which documents your specific preferences about various types of medical care.
• It’s important to have both types of DPOA to be prepared for future uncertainties.
3. Living Trust – A living trust is a legal instrument that can hold ownership of your property, financial accounts, and other assets — essentially, anything you decide to put in the trust. A living trust helps you transfer your assets efficiently to your beneficiaries, avoiding the cost and delays of the probate process. A trustee is named to manage and distribute the trust’s assets as outlined in the trust upon your death. With a revokable living trust, you remain in control as the trustee while you are alive and capable.

Keep in mind: Everyone’s situation is different, so seek legal advice to determine if these documents are right for you and if you need any other estate planning preparations.

Additional considerations

Decide if you feel comfortable creating these documents using online tools and templates or if you prefer to work with a professional. Only you can decide which approach is best for you. Be sure to carefully consider your options to ensure you end up with correctly executed documents that are right for your situation.

After you’ve completed your documents, keep them together in a safe place and tell someone you trust where they are. It’s also a good idea to leave a copy with another trusted person, such as your attorney, trustee, and/or a close family member.