Most people do not like to talk about estate planning. Some do not want to think about the idea of death, others do not want to discuss financial or personal matters, and more simply procrastinate. However, once you do make the decision to set up your estate plan the options and paperwork can seem daunting. Here are ten basic, essential documents that you should discuss with your attorney about including in your estate planning process.
1. Basic will
The will is the document that most people think of when they consider estate planning. A will, in its most basic form, states who gets what when you pass. Family, friends, trusts, charities, and just about anyone else can be named as an heir or beneficiary in a will. You can also name a guardian for minor children in a will, and you should appoint an executor for the will, as well. If you do not have a will the court decides who gets what in your estate and a judge decides where your children will live.
2. Beneficiary forms
Almost every retirement account and insurance policy names a beneficiary in the case that you die while in the possession of the policy or account. Most beneficiary forms are mandatory, but you need to check each account and update the beneficiary if any major life changes like marriage, divorce, or children have occurred. You should also make copies of all beneficiary forms, and make sure that they are included in your estate planning documents.
3. Financial power of attorney
A power of attorney form names a person to make specific types of decisions about your well-being in the case that you are no longer able to do so yourself. A financial power of attorney form designates a person to make all financial and legal decisions on your behalf. A financial power of attorney form can be customized to the level of decision making power and types of decisions that the holder can have.
4. Medical power of attorney (Healthcare proxy)
The medical power of attorney form is similar to the financial power of attorney. The difference is that the person named to the medical power of attorney, otherwise known as a healthcare proxy, makes all of your medical decisions for you if you are unable to do so yourself. An important detail within the medical power of attorney is to include a HIPAA form that gives the person appointed as your healthcare proxy access to your medical records and information so that better decisions can be made about your care.
5. Living will
Also known as an advanced medical directive, a living will details all of your decisions regarding end of life wishes and long-term medical care. You can customize a living will to a particular illness or types of procedures that you do or do not wish to have. If you foresee issues arising within your family about your living will for personal or religious reasons consider explaining within the living will why you chose those directives. Whoever is appointed in your medical power of attorney should follow the decisions set out by you in your living will.
The next post will continue with the last five documents essential to the estate planning process.