7 Documents That Are Critical to Planning Your Estate
1 – Durable Power of Attorney
A Durable Power of Attorney let you pick somebody you know and trust to manage your financial and legal matters if you can’t.
This may be the most important document you can create. Without it, your family may be forced into court in a proceeding for a “guardianship.” This is when the courts decide you can’t manage your own affairs and name somebody to manage for you. A Guardianship is quite expensive because it involves going to court.
This isn’t something you should put off. You must be legally competent to sign a durable power of attorney. Many people worry about giving up control until it is too late. Then their family is forced into court.
2 – Healthcare Power of Attorney
Make sure somebody can make healthcare decisions for you if you beccome mentally incapacitated.
This shouldn’t be confused with a Durable Power of Attorney. The two cover different areas of your care.
In many, if not most states, a Healthcare Power of Attorney is only used if you can’t make your own healthcare decisions in any manner. As long as your are mentally competent to manage your affairs you do.
3 – HIPAA Waiver
HIPAA is a law that says your healthcare information is your private business. Without a waiver, your family may not be able to talk to the doctors and nurses to check on your condition. A hospital may not even be able to tell people if you are a patient.
A HIPAA Waiver tells healthcare professionals who you want to be able to check on your condition and get other healthcare information.
4 – Living Will
A Living Will (not to be confused with a Last Will and Testament) lets you explain in advance what treatments you want if the end is upon you. It is strictly to tell the doctors what treatments you want and don’t want if you can’t make those decisions.
A “Living Will” has no relationship to a Last Will and Testament or a Trust.
5 – Last Will and Testament
Wills require probate! Probate is public. Probate is lengthy. Probate is expensive.
Wills don’t give you, your family, or your property any lifetime protection. Wills are not even effective until Probate is opened and the Will is admitted by a Judge.
A Last Will and Testament
- Gives your final estate away to who you want in the amounts you want
- Names guardians for minor children
- Names an executor (somebody to oversee the process)
If you don’t have a Will, the Court, not you
- Names the executor
- Decides who gets what
- Decides who gets how much
6 – Living Trust
A Trust is a way to pass assets on without Probate.
You name a trusted person, the successor Trustee, to manage the property and stuff in the Trust. Unlike a Last Will and Testament, a Trust can distribute property now or later. A Trust can be used to create complex rules for the distribution of your property.
7 – Inventory
You should have an inventory of your property. This doesn’t just include your house and cars but should also include
- Bank accounts
- Financial planner or advisor
- Life insurance policies
- Retirement accounts
- Divorce records
- Marriage records
- Mutual Funds
- Accounts payable with contact information
- Any loans you’ve made with contact information