The Four (or Five) Estate Planning Documents Everyone Needs

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Female hand holding a pen and writing a plan in a planner

By Rick Fingerman, CFP™

Some people think estate planning is only for the wealthy, but this is just not the case. In fact, estate planning is an important part of every person’s overall financial strategy, whether you’re going through cancer treatment or not.

What is estate planning?

My definition of estate planning is simply having a plan in place that addresses how one wants their estate – including assets, pensions, real estate, and more – handled in the event of incapacitation or death. The first step is to draw up certain legal documents and a clear financial plan.

Necessary Estate Planning Documents

1. Health care proxy

This document allows you to appoint someone to make medical decisions for you if you are unable to do so. A common misconception is that only the elderly or sick need a health care proxy, but it is wise for all adults (aged 18 or older) to appoint someone they trust in case of an accident or illness.

2. Will

Generally speaking, a will allows your wishes to be carried out upon passing. It can name guardians for minor children, appoint a personal representative (sometimes known as an executor or executrix) to handle the settling of your estate, and even provide instructions for the care of pets.

3. Living Will

This document spells out end-of-life medical care wishes, in the event that one cannot communicate those wishes. In a living will, you decide whether you would like to remain on life support, or want to receive certain medical treatment in life-threatening situations. Without a living will, these decisions are left to loved ones to make.

4. Durable Power of Attorney

This important document gives an appointed person the ability to make financial decisions on your behalf. A named agent can pay bills in your name, file tax returns, buy or sell real estate, or take distributions from retirement accounts if required.

5. Trusts

Trusts aren’t always necessary — however, they do accomplish things that a will cannot. Trusts allow you to name a trustee who ensures that your dependents are well cared for and has the discretion to deny or approve financial requests of those dependents. There are many different types of trusts, so it’s important to have your wishes spelled out clearly so the correct trust can be used. If you are a Dana-Farber patient participating in our Pro bono Financial Coaching program, you may be eligible for an estate plan at no or little cost.

Rick Fingerman, CFP® is a managing partner of Financial Planning Solutions, LLC and liaison between Dana-Farber and the Financial Planning Association of Massachusetts, offering free financial coaching to qualifying patients.

This blog is for informational and educational purposes only. It should not be considered investment, tax, or legal advice. Rick Fingerman, CFP® only renders personalized advice to clients of Financial Planning Solutions, LLC or patients of Dana-Farber that have signed a pro bono financial coaching agreement.

Rick can be reached at 617-630-4978 or rick@planwithfps.com

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