The term “estate planning” is daunting. You are forced to think about life’s favorite certainties – death and taxes. Estate planning, however, is one of those things that once you put a plan in place, you will feel such a huge sense of relief. This is YOUR plan in which you make key decisions about your family, money, and health. When doing an estate plan, here are 5 key items you may consider:
Create a Power of Attorney. A power of attorney is an essential document if you become hospitalized for a long period of time, suffer from dementia, or struggle with general mobility. A power of attorney is good only while you are living. However, this document allows a person YOU chose to handle your financial decisions. This is often a spouse, adult sibling, or an adult child. A power of attorney should never be a person suffering from a drug, alcohol, or gambling problem since they can access all of your financial accounts. A power of attorney can last a lifetime and can be so valuable even thirty or forty years down the road of life.
Create a Health Care Directive (or Living Will). Health care directives can be tricky because most people cannot anticipate their medical needs or pain tolerance or all the “what ifs” of medicine. A Health Care Directive most importantly appoints a health care agent to be your voice when you are no longer able to communicate. A health care agent represents you to the physicians and hospital staff. Writing a health care directive can be simple or it can be in more detail. Often, communicating with your agent during an illness or before a health care crisis can be the very best way to work together.
Create a Will or Trust. An attorney can help you decide whether you need a will or a trust and each state will differ. However, both documents are essentially a more detailed plan for what happens at your death. It can be incredibly powerful because you decide who handles your affairs when you are deceased, you may designate guardians to take care of younger children and/or pets, and you decide where your money and assets go at your death. Without a will or trust in place, all of these decisions are made for you, often dictated by the state laws and courts.
Check Assets and Beneficiary Status. When you are doing an estate plan, you will likely check ownership and beneficiary statuses on all of your property and financial accounts. This will help you in your will and trust planning. Most estate planning attorneys care about your accounts only to make sure they are designated correctly and that you are maximizing and stretching your investments as they pass to others. They are not criticizing or judging your saving plans or how much money is in each account. Also, if you have a designated financial planner, your estate planning attorney can work closely with that person to help direct the assets for you and your future generations.
Designations for children. Many states have forms that provide a temporary guardian for children for the time between death and a court designation. Parents designate a temporary guardian (likely matching a longer term guardian established in a will or trust) to be able to immediately take the child if parents are unable to care for their children. That way, there is no question about what friend or family member should take the child if something happens to both parents unexpectedly.
This article by Rachel Bohman, Attorney, for Bohman Law Office, LLC should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general information purposes only, and you are urged to consult your own lawyer concerning your own situation and any specific legal questions you may have.