Did you know the average American has a net worth of $748,800? However, this varies based on age range. For instance, the average for those between the ages of 35 and 44 is $436,200, while it’s $833,200 for the 45 to 54 age range.
Either way, those figures show that even typical Americans have wealth to hand down. That’s enough reason to prepare estate planning documents ASAP.
So what exactly are the documents you need for estate planning?
We’ve listed the most crucial ones below, so read on.
A Will
A will is a real estate planning document that names your heirs and their guardians. It can also specify other people you want to distribute your assets to after you pass away.
Your will should contain information about all your tangible and intangible assets. Examples of the former are your real estate properties and personal belongings. By contrast, the latter includes savings accounts and investments like stocks and bonds.
A Durable Power of Attorney (POA)
Another vital estate plan document is a durable POA; it lets you delegate someone to act on your behalf. Once named, this person can decide for you if you become incapacitated. For example, they can make financial and end-of-life healthcare decisions for you.
Suppose you develop dementia, a common condition affecting about 10% of older U.S. adults. This illness can render you mentally incompetent and unable to make financial decisions.
If you don’t have a durable POA, the court may have the final say on what happens to your assets. However, their decision may not be what you wanted when you were still mentally competent. That’s why you should prepare a durable POA as soon as possible.
Insurance and Financial Information
While you still can, file all your insurance policies in an estate planning binder. These should include your health, auto, home, long-term care, and life insurance plans. Then, separate them with estate planning tabs for easier access and review.
Organize your financial accounts and the details needed to access them, too. These include savings accounts, credit cards, investment portfolios, and pension plans.
Online Account Credentials
According to estimates, the average digitally active person has around 100 passwords. These codes are for emails, social media, and financial accounts, to name a few.
It’s hard enough for a typical individual to remember passwords. So, imagine how much more challenging it can be for a person with memory problems.
The problem is that many online accounts are only accessible via the web. Take cryptocurrencies, for instance; these digital currencies live on the web. One can only access them with their corresponding private keys.
So before you forget or anything happens to you, keep a hard copy of your online account credentials. Then, assign a digital executor and specify their responsibilities in your durable POA. For example, you can instruct them to distribute your digital assets to your heirs.
Prepare Your Estate Planning Documents Today
While most people don’t want to think about their passing, it’s an inevitable part of life. Remember, even healthy and young people can pass away early, such as in the case of an accident.
So, consider preparing your estate planning documents as early as today. That way, you’ll have one less thing to worry about, especially if you have dependents.
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