3 Documents Everyone Should Include in Their Estate Plan
If we’ve learned anything throughout the course of the Covid-19 pandemic, it’s that life can be extremely unpredictable. Unfortunately, we have no way of knowing what the future holds, or if and when tragedy will strike. While an estate plan may force you to think about uncomfortable topics, it’s vital to have one in place for your own protection, the protection of your family and loved ones, and for the protection of your life savings.
The following three estate planning documents are essential for any estate plan, and help ensure that, should you become incapacitated, you receive medical treatment in alignment with your wishes, and that if tragedy strikes, and you pass away unexpectedly, your family and assets are protected.
The last will and testament is a legal document that explains how a person wants their assets distributed after their death. If you do not have a last will and testament when you pass away, it is called dying “intestate,” and the probate courts will decide how your assets will be distributed. While the court system does follow a set of laws to determine how to distribute your assets, your wishes will neither be known nor considered. The only way to ensure that your wishes are granted upon your death is to have a legally binding last will and testament in place.
The advance directive for healthcare is a two part document that contains both the living will and the healthcare proxy. The living will is where you state your wishes for end-of-life care. For example, you can express whether you want all possible measures to be exhausted, or that you do not want feeding tubes or ventilators. By setting out these instructions ahead of time, you will save your family the extra stress and heartache of having to make these decisions without your input.
In addition to the living will, it is imperative to also have a healthcare proxy in place. The healthcare proxy is where you name someone you trust to be your medical power of attorney. This person will help make medical decisions on your behalf—in alignment with what is outlined in your living will—in the incident that you become incapacitated, or otherwise unable to do so for yourself. Having a trusted agent in place will give you peace-of-mind knowing that your wishes will be carried out, no matter what happens.
A durable power of attorney is different from a medical power of attorney. With a durable power of attorney, you will grant a trusted individual power over your finances and estate. This way they can pay your bills, sign important documents, and even sell assets if needed.
These three documents, together, create a “crisis instruction manual” for your family and friends and leave you with peace-of-mind.
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