IN THIS ARTICLE
02/ Living Will / Advance Directive
03/ A Will / Revocable Living Trust
05/ Accounts’ List
06/ Life Insurance
The importance of having certain key documents completed and accessible in an end-of-life file is critical.
While nobody wants to think about not being able to take care of their own affairs or to consider their own demise, it happens.
If you want to have some control over what will happen to you and your stuff if you were no longer able to make decisions for yourself –through incapacity or death–it is important to have certain paperwork completed and accessible.
Specifically, there are 7 types of documents that everyone should have in an end-of-life file. This paperwork will help ensure that your wishes are known and carried out if you are no longer in a position to make your own decisions.
The 7 Most Critical Types of Documents
1. Power of Attorney Papers
Power of attorney (POA) papers are among the most important documents you can have. In the event that you are unable to make your own decisions in the future, these are the documents that indicate whom you would like to have make decisions for you.
There are two different types of power of attorney documents: one for healthcare matters and one for finances.
You can appoint one person to be your POA for both healthcare and finances or you can appoint different people to these roles.
Having POA documents completed is critical because if you were unable to make your own decisions and you hadn’t previously appointed someone to be your POA, it is very possible that a court-appointed guardian and/or conservator could be assigned. Sadly, this happens more often than you may imagine.
[Read more: Who can be your power of attorney if you don’t have anyone to appoint?]
2. Living Will / Advance Directive
Along with your POA documents, it is also important to have a living will.
A living will is a legal document in which you detail the medical treatment you would like to receive (or not receive) if you were in various states of compromised health. For example, would you want to be put on a ventilator if you weren’t able to breathe on your own?
By having detailed information about the care you would like in different scenarios, your POA can advocate to make sure that your wishes are honored. It is also easier for a POA to proceed with confidence, if they know that they are making decisions that are consistent with the care that you would want.
Note: You can complete a living will and appoint someone to be your POA for healthcare, together, in one document. This document is known as an advance directive. You can find advance directive forms for your state on the AARP website or check out the Five Wishes Advance Directive, if you are interested.
3. A Will / Revocable Living Trust
Another critical document that everyone should have in their end-of-life file is a will.
With a will you direct what you would like to have happen to your “stuff” when you pass away. Your will is also the document where you can name an executor.
An executor is the person who ensures that accounts get closed, debts get paid and that your assets are distributed according to your wishes.
In addition to a will, many estate planners today strongly recommend having a revocable living trust. Some believe that having such a trust reduces the chance of your estate ending up in probate court.
If you don’t have a will and/or a revocable living trust in place when you pass, you won’t have a say about how your assets are allocated. Instead, the laws of your state will determine how your estate will be divided.
[Read more about what your power of attorney and executor need to know]
4. Property Ownership Papers
Another critical component of your end-of-life file are property ownership papers. These are the papers that show proof of what you own, from your home and car to your cemetery plot. Having ready access to these documents will help someone taking over for you manage your property more easily.
For example, if a car (or other property) needed to be sold in order to help fund your care, your POA would be able to do this much more quickly if they didn’t have to search for the title. There wouldn’t be a delay in getting you the care you needed that may otherwise result from your POA having to search for ownership documents.
Having your property ownership papers together will also help your executor, when settling your estate. They will know about all of the property you have and can make sure it all gets distributed according to your wishes.
5. Accounts’ List
In addition to all of the legal/official paperwork mentioned above, it is also important to have a document, in your end-of-life file, that contains information about all your accounts.
This document can be as simple as a basic sheet of paper with hand-written information about your accounts. The important thing is that it should include information about all of your accounts from services you pay for, like utilities and streaming memberships for example, to accounts where you invest your money, like bank and investment accounts.
Having all your accounts listed together (with the corresponding account numbers and online access credentials), in one document, will help your POA/executor tremendously and will in turn be beneficial to you.
To highlight this point, imagine that you didn’t have a list of your accounts and your POA didn’t know you had a long-term care insurance policy. Your POA wouldn’t know to make payments on your policy and your policy could lapse. Also, if your POA didn’t know about such an account, you wouldn’t be able to realize the benefit of the care that a long-term care policy provides; one that you likely had been paying for many years.
[Learn more about making a plan for your online files and digital assets]
6. Life Insurance
Another key document to have in your end-of-life file is a copy of any life insurance policies you have. Life insurance paperwork should include the name of your life insurance company, the policy number and agent, if applicable.
If you have a life insurance policy, you purchased it for a reason. You wanted your beneficiaries to be left with some money after your death.
However, in order for your beneficiaries to get the money you intended, your beneficiaries and/or executor needs to know about and have documentation of your policy so they can make a claim. Otherwise, it’s possible that unclaimed funds will eventually end up in the state treasury for the last place you lived.
7. Most-recent Tax Returns
Finally, your end-of-life file should also include copies of your most recent tax returns.
Many experts specifically recommend including your three most recent tax returns with your end-of-life papers.
Your recent tax returns can help guide your executor with regard to your assets. Also, having past years’ tax returns can help your executor file a final tax, estate and/or revocable trust return, if necessary.
Once you’ve completed and gathered all 7 types of documents for your end-of-life file, you should congratulate yourself. You’ve done the hardest part.
The only thing left to do is make sure that you keep the file up to date and most importantly, that you tell your representatives, your POA and your executor, where they can find this file.
If the people you hope will take over for you, don’t know about your end-of-life file and the critical documents stored within, it’s as good as not having them. You’ve worked too hard to let that happen to you.
