So what does it mean when someone refers to estate planning? Well, collectively it refers to many things but we will focus mainly on the big 3, Last Will & Testaments, Power of Attorney and Directive for Health care. The main purpose of estate planning is to eliminate the courts having to get involved. By planning ahead of time, things such as who will be in charge of your assets upon your passing, the disposition of your remains, who will watch over your minor child, etc. will give your family and loved ones some peace of mind.
What exactly is a Last Will & Testament? It’s basically an official document that tells the world how you want your probate assets distributed. This can include providing the name of an Executor to handle your Estate matters, appoints a Guardian for minor children and may even include the method in which you want your remains handled. Now, I know there are a lot of technical terms here and we will break everything down….in a subsequent post. For now, bear with us as we give you a basic overview.
A Power of Attorney, which I discussed in a previous post ( Sign the POA and Be on Your Way) is a document in which one party grants authority to another party to act in place of the principal party. Whether it be in regards to economic and/or financial matters. The Power of Attorney must be signed by the principal and one or more witnesses in front of a notary public.
A Directive for Health Care designates an agent to make health care decisions on your behalf. Say you’ve decided you want a DNR clause and to ensure this is understood in the event it occurs, the person you appoint as your designated agent will be responsible to uphold this request. This document will require witnesses but does not need to be signed in front of a notary. Of course you should always refer to you local state rules to ensure your directive mets state standards. The key point to take away from this document is it allows you to choose your end of life care/treatment preferences in the event of a terminal condition or persistent vegetative state.
Having at the very least, the three documents listed above in place at some point in your life is extremely helpful. Of course, will the help and assistance of a qualified attorney this can be accomplished. Furthermore, you may need to adjust these documents as your family grows or maybe even upon getting divorced or a sudden death of a family member that you appointed as an agent or principle for your estate matters. The point of this post is to give you a basic understanding of what estate planning encompasses.