Although estate planning may not be the top priority on your daily to-do list, it’s something that should be addressed before it’s too late. Completing the process ensures your wishes are fulfilled and your family is taken care of upon your death. It also keeps you covered if you’re still alive but become disabled or incapacitated. Here are four documents you will need.
1. Trust
The last thing you want to do is leave it up to the courts to determine who receives your assets. Accordingly, it’s critical that you have a Trust in order to specify who gets what and other details. You don’t want to create strife between two or more family members because of a lack of clarification. That’s why it’s usually best to tell individuals ahead of time of what will be passed on to them. You should also choose a successor trustee to be in charge of paying taxes, managing assets and distributing them to beneficiaries.
2. Durable Power of Attorney
In the event that you’re unable to make your own decisions while still living, you will want a person who you trust to make your decisions for you. You will give this individual the authority to act on your behalf to cover financial and legal transactions. Because this person will have a lot of power in their hands, it’s important to think carefully before choosing a durable power of attorney. This person should not only have your best interest in mind but should be financially responsible and capable of effectively managing money. Having a backup in place is a good idea in case something happens to your initial power of attorney.
3. Medical Power of Attorney
This is a legal document that gives another person the ability to make your medical decisions for you if you’re unable to do so. They will act as your medical power of attorney and will essentially have your life in their hands. Consequently, making your choice isn’t something to take lightly. The person you choose should want only the best for your health and well being. They should also be able to remain calm during a stressful situation. Subsequently, objectivity is a good characteristic to look for.
4. Living Will
Drafting a living will isn’t always a pleasant thing to do, but is nonetheless an important part of estate planning. In this document, you will specify what you want for end of life care and ensure that you remain relatively comfortable. For instance, if you develop a terminal illness that’s incurable, you could dictate what type of treatment you receive, if any. You could also determine whether or not you want artificial respiration to keep you alive. Having a talk with family and loved ones about your living will and medical power of attorney should make it easier in case of a difficult situation in the future.
Due to the emotional nature of estate planning, it’s sometimes put off. Even though death and medical issues aren’t something that we like to think about, much less put at the forefront of our minds, it’s better to take care of legalities in advance to make the process easier later on.