Crucial Estate Planning Documents Everyone Needs
Some people think that estate planning is only for the very wealthy who need to try to avoid estate taxes. However, estate planning involves more than just wealth preservation. An estate plan can help ensure that your wishes are known and carried out when you cannot voice them. A complete estate plan should contain four key documents.
Drafting a simple will can make things easier for your loved ones after you are gone. A will distributes your assets to your beneficiaries. Having a will often makes things easier for your loved ones and can eliminate arguments because you can name recipients for family heirlooms and personal effects. You can also appoint a guardian for your minor children in your will, rather than leaving the decision up to the court.
You need to appoint an executor, or personal representative, in your will. An executor pays the final taxes on your estate and any other expenses you have, and then the executor distributes your assets according to the directions in your will. It is important to choose your executor carefully, as the job requires a person who follows through and is detail-oriented. In many cases, your executor will need the assistance of an attorney to carry out his or her duties.
Advanced health care directive
Your will does not take effect until after you die, so it is important to have an advanced health care directive, also called a living will, in case you become incapacitated. With an advanced health care directive you can make known what kind of limitations you want to put on life-sustaining measures when you cannot tell health care providers yourself. You may wish to include whether you want to be resuscitated if you stop breathing or if your heart stops and whether you want doctors to use artificial respiration or feeding to keep you alive.
Medical power of attorney
In addition to drafting a living will, you should give someone medical power of attorney. Medical power of attorney, also called a health care proxy, gives another adult the right to make decisions about your medical care on your behalf. It is important to name a health care proxy so that your loved ones will not get into arguments about who gets to make the decisions about medical treatment. You should make sure that the person whom you name as your health care proxy can make rational decisions under stress and is willing to follow your wishes regarding medical care.
Durable power of attorney
You should also consider giving someone power of attorney for non-medical affairs. Giving someone power of attorney means that person can act as your agent if you are unable to act yourself. This person can handle financial and legal affairs for you if you should become incapacitated. It is important to select the person to whom you give power of attorney with care, making sure that person has good money-handling skills and is someone you trust to make sound decisions on your behalf.
Estate planning is important for everyone, and you should not delay drafting these crucial documents. If you have questions about estate planning, speak with a seasoned estate planning attorney who can help you create an estate plan that meets your needs.
Keywords: estate planning; will; trust; advanced health care directive