People think estate planning is only about a will, but it’s much more. Estate planning protects and preserves assets after you’ve passed. Still, it also protects property and your wishes while you are living, explains a recent article, “Do You Have These Key Estate Planning Documents?” from Cape Gazette. There are four documents every adult should have, no matter their age or stage in life. They include Power of Attorney, Advance Medical Directives, Last Will and Testament, and a Letter of Instruction. An estate planning attorney can help create all these documents for you.
What would happen if you were severely injured or became suddenly ill and needed someone to be able to run your household, pay your bills, and access your financial assets? A Power of Attorney authorizes another person to make financial and legal decisions on your behalf. The person doesn’t have to be a family member but needs to be someone you trust completely.
There are two types of POAs: an immediate POA, which is effective as soon as it is executed, and the other is a springing POA, which is not effective until a court decides you are incapacitated. Your estate planning attorney will help you decide which is best for your circumstances.
Additionally, you’ll want to have an Advance Medical Directive. This document expresses your wishes for medical treatment and allows you to appoint another person to make critical decisions if you are incapacitated. Without one, decisions will be made by someone appointed for you, which may or may not align with your personal values.
There are a few different types of medical directives. The Living Will concerns the specific medical treatment you would want in the event of a terminal illness or injury. A Healthcare Proxy allows another person to make medical decisions on your behalf. The DNR—Do Not Resuscitate is a legal order signed by you and your treating physician to tell healthcare professionals and first responders not to perform CPR or other treatments to bring you back to life in a medical crisis.
A Last Will and Testament lays out how you want your property distributed and serves several other purposes. Parents of minor children use their wills to name guardians who would raise their children in the event of both parents’ deaths. The will is also used to name an executor who will manage all the tasks accompanying death: paying estate and income taxes, selling a residence, paying creditors, distributing assets, and more.
A Letter of Instruction or Letter of Intent is not a legal document but a wise adjunct to your other estate planning documents. It can provide funeral and memorial instructions, explain why your estate plan was structured as it was, or simply express your feelings. The letter will not override instructions in your will but can be used to underscore your wishes.
Reference: Cape Gazette (April 12, 2024) “Do You Have These Key Estate Planning Documents?”