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Five Estate Planning Documents You Need

Regardless of your age, health, and wealth, we'll discuss the five estate planning documents you may need.

Estate Planning

Estate planning should be a vital piece of your overall financial plan, and it's an important task that everyone should undertake. It involves making arrangements for the handling of your assets and personal matters during your lifetime and upon your death. This process is crucial for making your wishes known and for providing guidance to your loved ones. Below, we outline five key estate planning documents that are typically considered fundamental for most people.

1. Will

The cornerstone of any estate plan is a will. It's in this document that you outline how you want your assets to be distributed after you pass away. Whether you have a sprawling estate or modest possessions, having a will ensures that your property is handed down as per your wishes.

Furthermore, it is in your will that you nominate an executor. The executor is the person who will be responsible for ensuring the terms of the will are carried out. If you have minor children, you can also name guardians for them in your will. Failure to establish a will can result in the courts deciding how your assets are disbursed, and who is appointed the administrator of your estate, both of which may or may not align with your wishes. Since a will is a legal document, courts are reluctant to overturn the provision written within it, so the document should be well written and up-to-date in accordance with state laws.

2. Living Trust

A living trust, also known as a revocable trust or inter-vivos trust, can be a useful tool to avoid the probate process, which can be lengthy and often costly. This trust is generally established to own property such as your home or your investments. It is called a living trust because its purpose is to manage your assets while you are still alive. You control the property in the trust, can change the terms of the trust, can transfer property in and out, and can end the trust altogether.

By establishing a living trust, you transfer ownership of your assets to the trust and dictate how they should be managed and distributed after your death. It provides a seamless transition of asset management upon death or incapacity without court intervention. This benefits the estate as the trust bypasses a sometimes lengthy and costly probate process. Additionally it helps keep your assets private, as inventory that passes through probate is subject to public record.

3. Durable Power of Attorney

There might come a time when you become unable to handle your financial affairs due to incapacitation. A durable power of attorney ensures that your financial matters won't be left hanging. This document allows you to designate someone to step in and manage tasks such as paying bills, managing investments, and filing taxes on your behalf. There are two types of DPOAs, such as an immediate DPOA which is effective immediately, or a springing DPOA, which takes effect in the event of incapacitation.

4. Advanced Medical Directives

While the durable power of attorney takes care of your financial affairs, advanced medical directives – also known as a health care power of attorney – is focused on medical matters. This document allows you to appoint someone to make medical decisions on your behalf if you're unable to do so. It's vital to discuss your healthcare preferences with this person so they can act according to your wishes. If advanced medical directives are absent from your estate plan, then your wishes will not be granted should you become incapacitated.

5. Letter of Instruction

Also called a testamentary letter, this document is an informal nonlegal letter that generally accompanies your will. It's used to provide your family with your personal thoughts and directions regarding the contents of your will, as well as other directives such as your burial wishes or where to locate your will.


Estate planning can be complex and emotional, but these five documents form the backbone of a solid estate plan. Everyone's situation is unique, and there may be additional documents or considerations needed based on your specific circumstances. Be sure to consult with a qualified estate planning attorney to ensure that your plan fully addresses your needs and wishes. By taking the time to put these documents in place, you are giving a precious gift of clarity and certainty to your loved ones in the future.

IMPORTANT DISCLOSURES AVL CPA Firm, LLC. does not provide investment, tax, legal, or retirement advice or recommendations. The information presented here is not specific to any individual's personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

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