Wills, trusts, and end-of-life planning come to mind when most people think of “estate planning.” We all understand the significance of these matters, but it’s also crucial to indicate who will make decisions on your behalf in the event that you become unwell or otherwise unable to do so.
Your estate plan may designate who will make decisions regarding your medical care if you are unable to make them for yourself. Without an estate plan, the state’s laws and courts will decide some of these matters for you, and their choice may not be in line with your desires. Furthermore, going through this process might strain your family financially and emotionally.
Establish a power of attorney (POA)
The power of attorney (POA) document specifies the people who will handle significant things on your behalf while you are still alive, such as financial and medical decisions. The POA is terminated and your will takes effect after your death.
You do not have to name only one person as your power of attorney to handle your affairs if you become incapacitated. In fact, you should choose a backup for each position in case your initial pick is unable to fulfill their duties.
The various powers of attorney include:
Executive power of attorney
Big decisions are managed on your behalf by an executive POA. If you have designated more than one POA, this person will make every effort to see that your wishes are carried out by the group you selected. The executive POA will be responsible for all of these roles if you fail to designate POAs for each one. The executor of your will assumes control of your intentions after your death.
Medical power of attorney
When you are unable to express your medical preferences or give approval for operations, a medical POA speaks up for you. A medical POA will intervene to speak out for you, for instance, if you are unconscious in the hospital due to a severe injury. The medical POA does not apply to decisions about end-of-life care. A living will, which we will cover in the next part, is not the same as naming a medical POA, thus they must be done separately.
Financial power of attorney
Your individual accounts are managed by a financial POA. Your executive POA can engage a specialist to handle your bookkeeping, file taxes, and review statements, or an accountant can give an annual analysis of how your bank accounts are being managed.
Digital power of attorney
Today, digital accounts are at the center of many people’s administrative life. Your online and digital accounts are made accessible to a digital POA in order to facilitate necessary transactions.
Consider giving your digital POA access to a password manager so they can enter into the required accounts to make their responsibilities easier and more accessible. For instance, if your executive POA has access to your 4Privacy account, they may be able to give your digital POA your password details.
Establish a living will (advanced care directive)
If you are unable to express your own wishes for end-of-life care, a living will (also known as an advance directive, healthcare directive, declaration, or directive to physicians) outlines your preferences. It is both legally binding and state-specific.
Making a living will in advance is crucial, just like with your last will and testament. It is too late to make a living will once you truly require one.
What should be included in your living will
Since few medical decisions are clear-cut, a living will should be as explicit as possible. Decisions about your end-of-life care for your loved ones will be less uncertain if there are clearer guidelines about the kinds of medical care you do and do not wish to receive.
How important is your quality of life to you? Your medical POA will be able to speak for you if you provide an answer to that question in your daily life. The better your response, the more specific.
A living will can clarify what you do and do not want to receive:
- Resuscitation of the heart
- Invasive diagnostic procedures or tests
- Mechanical respiration
- Kidney dialysis
- Feeding by tube
- Experimental techniques/procedures
Depending on the state you live in, a living will needs witness signatures and perhaps a notarization. The following individuals are likewise prohibited from serving as your witness in several states:
- A potential heir to a portion of your estate
- A person you specify in your final will and testament
- A blood or married relative
You can locate a notary public in your neighborhood UPS store, bank, credit union, library, or county clerk’s office. You can utilize online notary services in an expanding number of states, but before using one, you should confirm that it is legal where you live.
Provide your executor with a copy of your estate plan
Congratulations, your estate plan materials are complete. You have reached the final stage. It’s time to be sure the personnel you’ve selected to handle your business have the knowledge they require.
Give your executor and power of attorneys (POAs) copies of your estate plan documentation. Additionally, you ought to let them and the others on your will know where your original will is kept.
Your original estate paperwork should be stored in a secure location. Keep your original estate paperwork with your lawyer or in a secure location with any crucial documents. You may also keep a copy of your estate plan in the Estate area of your 4Privacy Vault and share it with Trusted Contacts.
How often should I update my estate plan?
Even if the most time-consuming and challenging portion of estate planning is over, you still need to make sure that your plan adapts to your changing circumstances. At least once every four years, you should evaluate your estate plan to make sure it still matches your current goals and assets.
After major life changes like getting married, getting divorced, or having a child, you should also update your strategy.
Finally, you should monitor financial legislation and adjustments to tax regulations that may have an impact on your estate and adjust your plan as necessary. You can determine when these developments would necessitate updating your estate if you have worked with a financial advisor or estate planning lawyer.
What documents are included in an estate plan?
A living will (sometimes known as a “advance care directive”), a power of attorney, and a final will and testament are the three primary legal papers that are commonly included in estate preparation.
You might wish to or need to include extra documents in your estate plan depending on your specific needs. The most popular ones are those we’ve listed. You can read more about estate planning here.
Last will and testament
Which family heirlooms go to whom? How would you split your cash resources? Who will look after your kids or animals? A will provides all of these important clarifications for your heirs.
The core of your estate plan is your will, or last will and testament. Wills are legally binding, state-specific documents that outline your preferences and directives on matters such as who should receive your property and how to care for your dependents.
Power of attorney (POA)
You can designate individuals in a power of attorney, a legally binding document, to act on your behalf should you become incapacitated. In your POA document, you can designate a number of people to manage certain circumstances, such as childcare or college finances.
Living will (advance care directive)
If you are unable to speak for yourself, a living will outlines your end-of-life preferences for the types of medical care you want (or do not want).
A document designating someone to make medical choices on your behalf in the event that you are unable to.
Letter of instruction
A document that addresses informal estate matters not covered by your will. The letter might also contain burial arrangements, a final word for your loved ones, or information on how to access the property mentioned in the will.
Forms that, despite the conditions of your will, let you transfer assets like bank accounts, retirement funds, or life insurance policies directly to the beneficiary.
A legal arrangement whereby a trustee holds assets on behalf of your beneficiaries. In addition to your will, trusts provide a few advantages. For example, they can stipulate how and when your assets pass to your beneficiaries.
The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only.