Basic Estate Planning Documents
The package...When one...finally...decides to prepare estate planning documents, they often wonder who should I name as my trustee....just kidding...A question I get alot but not considered as part of a basic estate plan. Nonetheless, an important question that doesn't seem to have the most wide spread knowledge is when one goes to an attorney's office to prepare estate planning documents, one does not know what is included in (or should be included in) a package. This article, in my opinion, is what you should be getting when you pay for an estate plan. The reason is because each of these documents serve an important purpose in different stages of one's life in their estate planning.
Financial Power of Attorney Probably the most recognizable document. This document appoints an agent to handle your financial affairs.
Medical Power of Attorney Unless you are in a hospital, this document seems to be forgotten but it is very important to have when needing to make medical decisions in the 11th hour and you are fighting with the hospital on who gets to make that decision. This document appoints an agent to handle your medical decisions, say when you are unconscious and unable to make them.
Declaration of the Person This document and next document, are like beefed up versions of the previous two documents. Power of attorneys help you in your time of need. These documents control you in your time of need. Typically, these documents come into play when you have suffer a permanent lost of capacity and aren't expected to come back from it. The declaration of the person is like the medical power of attorney. It appoints an individual to make decisions like where you will live, etc.
Declaration of the Estate This document appoints an individual to handle your financial affairs. One might wonder why would I want such aggressive documents appointing someone this type of authority. Great question, because if you need this type of care, wouldn't you have wanted to pick the person will make these decisions. If you don't have this document. A court will decide who makes these decisions. It may not be who you wanted.
Living Will Somehow this document gets confused with a Living Trust or a Last Will. I am here to dispel that confusion. It is the pull the plug document. If you are in such a state that you are unexpected to never regain consciousness, do you want to be kept on life support or after some time, have an appointed agent, pull the plug. A tough choice for anyone to make while they are sipping a glass of wine on a grassy hill or finishing a run, but this document will save your friends and family heartache.
Burial Agent A document I do not see often in estate planning packages but man oh man, it should be included. It appoints an individual to handle your burial affairs. While it might not seem like something that can cause trouble when you are making decisions with the funeral home, what you will be buried in, where you will be buried, it can...and when it does, its ugly and heartbreaking. And because these decisions always need to be made quickly to avoid your body sitting on ice for long, it always ends up, a sad decision.
Last Will and Testament The big one. Sometimes it is so hard to convince people to even have this document, let alone the other foregoing documents. Have a Will. I am sure I will write an article on how to write a Will entirely in your own blood....or handwriting....but before I do... have a Will. The Last Will appoints an individual to serve as executor for your estate. This individual, upon your death, will file your Will with the Court, to become appointed using your Last Will. Then, they will collect your assets and legitimate debts. Last, they will disperse with your estate as your Last Will instructs them to do so. There are many ways to leave your estate but if you don't leave instructions, the state will decide for you....
Now, how much should it cost? A million-dollar question.
P.S. Yes, I know there are trusts, deeds, transfer-on-death designations, and about fifty other things estate planners can argue about over coffee. This article is limited to what I consider the basics. The rest will have their day in future articles.
