Estate Planning Basics
It's never too early to prepare essential estate planning documents, but it can be too late. If the unexpected occurred, is your estate in order? If you or your spouse passed away, have you picked a legal guardian for your children? Have you clearly explained to your loved ones how you would like to be cared for in a medical emergency?
The right estate planning documents can help you prepare for these issues and more. At a minimum, every adult should have a Last Will and Testament and a Living Will.
Last Will & Testament
A Last Will and Testament is a legal document used to tell the world who you want to get your property and assets after you pass away. If you have young children, your will can also be used to name a guardian to raise and care for your children after your death. And a will can be used to select a person to manage your estate after your death. A will allows you to control your legacy. If you die without a will, state laws will govern how your estate is distributed and who receives your assets.
Every adult should create a Last Will and Testament, especially if you want to control how your estate will be distributed, have assets such as a home, checking and savings accounts, IRA or other items of value; have children under the age of 18, have loved ones you would like to provide for after you're gone; or would like to leave money to a charity.
A Living Will is used to tell family and medical professionals what life sustaining procedures, if any, you would like to receive. It can also describe whether you'd like healthcare workers to take measures to prolong your life. You need a Living Will if you have opinions about the end of life medical care you'd like to receive. With a Living Will, you can share your wishes in case you're unable to communicate them in the future.
Every EstateGuidance Living Will also comes with an optional Healthcare Power of Attorney, allowing you to appoint someone else to make medical decisions on your behalf. A Healthcare Power of Attorney only becomes effective when you are unable to consent to medical treatment on your own. If your health declines to the state that you can no longer communicate with others, the person named in your Healthcare Power of Attorney will communicate and make decisions for you.
Final Arrangements allows you to let your family, friends and associates know how you would like to personalize your funeral or memorial service. Although this is not a binding legal document, a Final Arrangements plan provides your surviving friends and family with a sense of direction during a difficult time. With a Final Arrangements plan, you provide your loved ones with the reassurance that they have honored your memory according to your wishes.
Every Final Arrangements plan allows you to specify the type of service you would like to have, how you would like your remains to be handled and any other personal touches you desire. Alternatively, if you do not have any specific wishes, the Final Arrangements plan allows you to give your designated contacts the ability to make these decisions for you.
Durable Financial Power of Attorney
A Durable Financial Power of Attorney is used to designate a trusted individual to make financial decisions when you are no longer able to handle such matters on your own. Generally you can grant specific powers to a person, called your agent, or you can grant them control over all of your finances. For example, if you want your agent to have control over your investment accounts, savings account, and real estate but not your vehicle or business, you would be able to specify those wishes.
Your agent is a fiduciary and has a fiduciary responsibility to you. What this means is that your agent must use your assets for your best interest and cannot use your assets in a way that would benefit your agent and harm you. It is crucial that you choose someone that you trust. You should never let someone talk you into being your agent and you should never sign a document that you do not fully understand.