We hear the sad stories all too frequently – conflicts that come up when a loved one’s wishes were never documented or someone passes away much too young with no guardian named for their children. Estate planning is the process that seeks to avoid these difficulties, as well as ease the emotional and financial burden of your incapacitation or death on your family and loved ones.
Estate plans are comprehensive plans that also allow you to continue to prosper and live comfortably while alive and transfer assets to your beneficiaries with the least amount of fuss and expense after you pass. They allow you to convey your wishes when you can no longer do so.
Six documents that every estate plan should have are:
1. A will: Even for smaller estates, a will helps ensure the smooth transfer of property, names an Executor to handle your estate and establishes a Guardian for minor children.
2. A durable financial power of attorney : A durable power of attorney is a legal document that gives someone authority to manage your financial affairs if you become incapacitated and can no longer do so.
3. A living will: A living will expresses your wishes with regard to being allowed to die instead of being kept alive by artificial means in the event of being terminally ill or in a permanent unconscious condition.
4: A durable medical power of attorney: A durable medical power of attorney designates a “principal”–another person– that you trust to make health care decisions on your behalf if you are unable to make these decisions.
5: A Declaration of Disposition of Remains: Since wills are not normally located until after a funeral, it’s best to leave a letter expressing burial wishes, service wishes and the like in an easy-to-find location. This document also apppoints the person to be in charge of ensuring that your wishes are carried out. Make sure to advise loved ones where to locate this document.
6: A HIPAA Authorization: If you are hospitalized and do not have this document, your friends and loved ones may never be able to determine your condition…or even that you are in a hospital! This authorization enumates the list of persons who may obtain such information about you.
In addition to the above, you may wish to consider trust documents. Trusts are valuable tools in estate planning. Too often those seeking inexpensive alternatives to estate planning could have benefitted substantially from establishing a trust, since assets in trust do not pass to heirs under the terms of your Will, thereby avoiding the expensive and time-consuming process of probate; rather, they are transferred according to the instructions in the Trust document.
As you can see, estate planning is much more than simply creating a will; it is an evolving process that should be updated as life changes dictate. An estate planning attorney can help you address these documents and tasks.