I’m a planner by nature; I prefer to be prepared for whatever the future may bring. That inclination led me into a career as a financial advisor and later to become an advocate for continuing care retirement communities (CCRCs), also called life plan communities. These communities offer residents assurance that they will receive appropriate care as their needs change.
In both of my professional roles I helped people prepare for life’s uncertainties. That same mindset is why I emphasize keeping estate planning documents current and complete.
The essential planning documents
Below are the core documents everyone should consider having in place and keeping up to date.
A will or trust
A will explains how you want your assets and property distributed after you die. Assets distributed under a will typically go through probate, a court-supervised process that validates the will, inventories and appraises property, pays debts and taxes, and then distributes remaining assets according to the will’s instructions.
A trust serves many of the same purposes as a will by directing how your estate should be handled after death, but it also offers instructions for managing your assets if you become incapacitated during your lifetime. Trusts often avoid the probate process, allowing beneficiaries faster access to assets.
>> Related: 4 Must-Dos of Retirement Planning
Power of attorney
A power of attorney authorizes someone you designate—the “attorney-in-fact,” agent, or proxy—to make decisions on your behalf if you become mentally or physically unable to act. That person can be a spouse, adult child, relative, or trusted friend. The most important consideration is that the chosen agent will act in your best interests when making financial or legal decisions for you.
Advance directive (living will)
Advance directives, often called a living will, document your preferences for medical care if you become terminally ill, severely injured, comatose, in advanced stages of dementia, or otherwise near the end of life. The clearer and more specific your instructions, the better they will guide healthcare providers and caregivers in making treatment decisions that reflect your wishes.
>> Related: Power of Attorney Documents Can Alleviate Problems Later
Why you should review estate planning documents
In addition to wills, trusts, powers of attorney, and living wills, many people have important documents such as life insurance policies, 401(k) plans, and IRAs. Creating these documents is an important first step, but ongoing maintenance is just as critical. Regularly review beneficiary designations and the terms in your documents to ensure they reflect your current wishes.
Annual reviews are a good baseline, but several life events should also prompt a review and possible update of your estate plan:
- Marriage or divorce: Changes in your marital status—or changes in the status of a beneficiary—may require updates to your documents.
- A birth: The arrival of a child or grandchild is an important reason to revisit beneficiary designations and estate plans.
- A major health event: A serious diagnosis or health change is a natural trigger to update powers of attorney, advance directives, and other documents.
- Addiction: If a loved one struggles with addiction, you may need to reassess how you name and structure beneficiaries or trustees to protect their interests.
- A significant change in finances: A dramatic gain or loss in wealth—such as an inheritance, business sale, or financial setback—should prompt a review and potential amendment of your estate plan.
- Tax law changes: Tax rules evolve frequently. Consult a tax professional periodically to understand how changes might affect your estate and heirs.
- A move: Relocating to a new state or country can affect probate rules, tax implications, and legal recognition of powers of attorney and advance directives. If you move—or if you choose to move into a CCRC—review all planning documents, especially if a refundable entry fee or other community-specific arrangements affect your estate.
>> Related videos: CCRC Refund Options
Planning for what’s ahead
No one can predict the future with certainty, but you can take control by establishing key legal documents: a will or trust, power of attorney, and advance directives. Equally important is regularly reviewing and updating these documents—especially after major life events—to ensure they continue to reflect your wishes.
If you have questions about creating or updating any of these documents, consult a qualified estate planning attorney who can provide tailored guidance based on your circumstances.