Estate plans vary from person to person, reflecting the individual’s unique goals and financial situation. Some people need to contemplate guardianship, carefully considering their children’s future, while others are childless and can sidestep the discussion completely. Some people need a complex estate plan to protect their many assets and beneficiaries, while others make do with a simple will. Your attorney can help you decide which building blocks your estate plan needs, but to help you get started, today we’re exploring some absolutely essential estate planning documents.
Essential Estate Planning Documents
LAST WILL & TESTAMENT
When most people think about estate plans, they think about wills. A will can accomplish several different things, including all of the following: (1) a plan for who should receive your property and how it should be distributed upon your death, (2) the appointment of a guardian for any minor children, and (3) the naming of the executor who will manage your estate. Some people hire an attorney to avoid probate, but regardless, you should always have a will for backup.
POWER OF ATTORNEY
If you become incapacitated, someone you trust will need to make decisions for you. In a power of attorney, you authorize a person of your choosing to act on your behalf in certain situations, including critical financial affairs. Although it is frightening to imagine yourself in an incapacitated state, it is tremendously important that you do so while you are healthy and lucid. Be sure to take your time as well, carefully considering who would be the best person for the job.
HEALTH CARE PROXY
Also known as a medical power of attorney, a health care proxy is very similar to a power of attorney. It is a document that authorizes a person of your choosing to make decisions on your behalf regarding health care when you are incapacitated. Someday, if you are unable to make sound decisions for yourself (for example, if you have Alzheimer’s, you have a stroke, or you are in a coma), the person you grant medical power of attorney will play an extremely important role in your life.
LIVING WILL
Also known as an advanced health care directive, a living will allows you to give direction to healthcare professionals regarding end-of-life care. Most importantly, you can express your desires regarding life-sustaining or life-prolonging treatments. Some people also choose to forbid certain treatments or go into more detail regarding specific services like analgesia (pain relief), antibiotics, feeding, ventilators, and cardiopulmonary resuscitation. In some states, you can combine this document with a health care proxy, forming an advance directive.
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Many people choose to use a revocable living trust in their estate plan as well, of course, and there are many other additional documents you might consider. However, if you want to stick with the basics, the four documents listed above are absolute essentials. To customize and finesse your estate plan, consult with an experienced attorney.