One of the biggest questions clients ask us about estate planning is “When should we start?” Luckily, there is an easy answer. For anybody aged 18 or older, there is truly no time like the present. The whole intent of estate planning is to determine what happens to our belongings once we pass. Once someone turns 18, nobody is allowed to act for that person legally without proper written permission or an express court order.
There is more to the process of estate planning than a last will and testament. These documents also allow you others to make health care and financial decisions for us if we are incapable of making them for ourselves. As much as these documents can do, they must be written and signed while you are still living and competent. If there is an emergency or unexpected illness, you may not be able to give any permissions. Then, your next of kin have to hire an attorney and go through an emergency hearing to obtain those permissions. Established estate planning documents prevents the extra labor.
No matter who you are, in the United States there are five essential estate planning documents. Ensure that all of your documents are prepared by an attorney well versed in estate planning to avoid any potential complications.
Will
A will, formally known as a last will and testament, is the first document most people think of when they think of estate planning. The “executor” (person writing and signing the will) uses a last will and testament to express what to do with all of his or her stuff. Items, trusts, property, and intangible assets are all divided and go to who or wherever the person designated.
Living Will
A living will outlines what people need to know what you want for end of life care. It informs both physicians and family members of your desires. It is a legal backup for your health care surrogate specifically for end of life care.
Designation of Health Care Surrogate
Designating someone as a health care surrogate means that they have access to your medical records and your medical affairs. There is no relation, other than being someone’s health care surrogate (or a parent to someone under age 18), that gives you power to make medical decisions. Spouses, parents to children over age 18, or children of older adults do not have the right to make medical decisions.
Durable Power of Attorney
A durable power of attorney designates a specific person to handle your affairs when you are incapacitated. That designated individual has the power to handle economic and legal affairs. The durable power of attorney appoints the specific person with that power. Additionally, it allows you to make your wishes known. This way, the person with power of attorney follows your directions, even when you can’t give them.
Revocable Living Trust
A living trust is a document that manages people’s assets through a trustee. When the person who established the trust passes, their assets pass on to their beneficiaries while avoiding the complications of probate court.