Key Elements of Your Estate Plan
Lots of people call our office asking for a “simple will” or saying that they “just” need a power of attorney. They may have specific circumstances in mind, like an upcoming surgery or a need to help their aging parent manage money. Of course we always want to meet that immediate need, but our conversation with the person branches out to include other documents.Why would we not just draw up a single document a la carte? Because each estate planning document is like one tool in a toolkit. With one tool you might be able to accomplish one task, but that task is likely to be followed by several different tasks during the course of the project. Without the full set of tools, it may not be possible to complete your project. That’s how estate planning documents work: sometimes alone, but sometimes in coordination, addressing a range of events and changes that may occur as a person ages and eventually passes away.While the estate planning toolkit will vary from person to person, there are some standard tools that should be in every adult’s set: a last will and testament or a trust; powers of attorney for finances and health care; and a living will.Last Will and Testament. A will allows you to specify where your money and possessions should go upon your passing. It also allows you to choose an executor of your estate. The executor will take care of managing your estate, paying debts, and distributing property as specified. A will only takes effect upon your death; it has no bearing on what happens related to your assets or health care while you are still alive.Trust. A trust does everything a will can do, but it also allows for you to choose someone to manage your assets if you become incapacitated because it is effective during your lifetime. A trust also provides privacy, as it is not subject to court proceedings that become open to the public; a will, on the other hand, may be subject to such public proceedings. There are numerous other advantages to a trust that can be explored with the help of an attorney.Financial Power of Attorney. This document names an attorney-in-fact to handle your finances during your lifetime in the event you are no longer able to manage assets for yourself. An attorney-in-fact can open and close bank accounts, write checks, and sell property if you choose to allow them the authority to do so. It should be created with legal advice to make sure your wishes regarding your finances are properly documented. The power of attorney document only remains in effect as long as you are alive; after you pass away, your attorney-in-fact does not retain authority to act on your behalf.Health Care Power of Attorney. A health care power of attorney names an agent to make health care decisions for you in case you aren’t able to make decisions yourself. Such decisions might include transitioning into a residential care facility or whether to extend end-of-life medical treatment. Like the financial power of attorney, this document goes into effect during your lifetime, but the authority it grants to your agent ends at the time of your death. It is important to create an all-encompassing health care power of attorney with legal guidance and not rely on forms provided by medical facilities prior to procedures.Living Will. A living will specifies your wishes for end-of-life medical care. For example, you can specify whether you want to be kept alive by artificial means if you are in a terminal state.This document outlines your wishes about medical treatment and care when you can’t communicate those wishes for yourself and is a guiding document for your health care agent and your medical providers.
Having a complete estate planning toolkit is necessary for you to have a say in what happens if you become sick and cannot make decisions for yourself, and to determine what happens with your money and your belongings after death. An estate plan also helps those who have decision-making responsibility during your life and after your death to do so in a more simple and straightforward manner.If you have any questions about something you have read or would like additional information, please get in touch. We will be happy to help point you in the right direction.
