Four Important Estate Planning Documents To Draft
The average age of death in the United States is 81 years old. Most people don’t expect to die before then, but a surprising number do. And statistics show that nearly 90 percent of Americans don’t have a valid will or trust in place.
You don’t want to think about it, but at some point you are going to die. Planning for what happens next can be complicated and emotionally difficult, but failing to do so could leave your loved ones feeling unprepared – or worse, having no control over their future. This month’s blog outlines four key documents you’ll need to prepare in order to make sure your family will be provided for if something unexpected were to happen.
Writing a will is an important act of self-care. This document ensures that your possessions, financial resources and last wishes are passed on to the people you would like to benefit. Without a will in place, state law determines who inherits your possessions, which may not be those you choose. By naming guardians for your children or caretakers for a dependent with special needs in your will, you make clear who will raise them in your absence.
After you have created a will, write a letter of instruction. This letter relays any thoughts and wishes that you want your loved ones to know. Include the names of people you want to take care of certain aspects of your estate after your death. The letter also provides information about your funeral wishes, such as cremation or burial, or who will be overseeing them. You can also talk about how you want to be memorialized in your obituary or other types of posthumous tributes.
Durable Power of Attorney
A power of attorney is an important document that allows you to appoint a responsible person to take care of your financial affairs in case you are unable to do so. A durable power of attorney means this person can also act on your behalf while you’re living and after your death.
A power of attorney allows you to name a trusted person who will make legal, financial, and health care decisions for you if you are unable to do so yourself. You can establish an immediate power of attorney, which gives a person the ability to act on your behalf for a limited or permanent time period, or you can set up a power of attorney that becomes active only upon a qualifying event, such as a temporary or permanent disability.
Advanced Medical Directives
Although advanced medical directives allow individuals to outline their preferences regarding medical interventions, there is no guarantee that those preferences will be followed. It is important for advanced medical directive holders to communicate with their care providers about their wishes.
There are three main types of advanced medical directives:
- A living will is a legal document that describes your current wishes about medical treatments should you become unable to make them known. Your physician and family members will be guided by your living will when deciding upon treatment options for you.
- If you cannot make your own medical decisions, a durable power of attorney for health care enables you to specify the person or institution that can make those decisions for you. This document gives the person or institution appointed by you the authority to make healthcare decisions on your behalf.
- A do-not-resuscitate order is a legal document that gives you a choice about whether or not you want CPR to be attempted if you have a cardiac arrest or stop breathing.
Trusts are a great way to control how your assets are distributed when you’re gone. If you don’t need a trust, that’s fine—but if you have an estate plan, or if you’re concerned that your heirs won’t know what to do with your money after you pass away, consider setting up a trust. A trust can be beneficial because it enables you to avoid probate court, which means everything is distributed faster and more efficiently. In addition, trusts give you the ability to name beneficiaries who aren’t related to you by blood.