Estate planning is sometimes thought to be a scary process. Right up there with purchasing life insurance or having a root canal. But almost all of my clients breathe a sigh of relief when they have completed the process saying they have dreaded this for years and are thankful that it was really not that hard and was now done. Of course, it is not really done because a good estate plan should be reviewed periodically to see if the law has changed, you have changed your mind or perhaps some of the people you designated to serve in certain positions are no longer alive or appropriate to serve. Having a plan can also give you the peace of mind that your assets are protected, your medical wishes are documented, and that provisions have been made for your friends and family.
While a complete package of estate planning documents includes numerous related documents, four of them are the core documents.
Will. A will is a legal document in which a person provides instructions for the distribution of his or her assets upon their death. This document can also be used to designate a guardian for any minor children, although I also recommend a separate document designating the same guardians but to take effect if you become incapacitated. The executor of the will is the person who, upon your death, gathers your assets, pays your debts and distributes your estate in accordance with the directions in your will. Your will may also designate a trustee if any trusts are to be created under your will; for example, for gifts to minors or for gifts to individuals receiving government benefits.
Durable Power of Attorney. A durable power of attorney is a document in which you designate an agent to perform specific actions when you are not able to perform them yourself because of incapacity. You specify which powers your agent will have under your durable power of attorney. Those powers typically include handling real estate transactions, financial matters and making legal decisions. Without a power of attorney, if you become incapacitated it may be necessary for your loved ones to go to court to have a guardian appointed to make those decisions for you.
Medical Power of Attorney. A medical power of attorney is a document in which you designate an agent to make medical decisions for you when you are not able to make them yourself. If you are able to make your own decisions, this document will not be used. You can specify that your agent is to enforce your wishes that are expressed in your Directive to Physicians and Family (described below).
Directive to Physicians and Family. A directive to physicians and family is a document indicating your preferences regarding sustaining your life in various circumstances. It is sometimes referred to as a living will. It also can list other health care preferences, for example, specific treatments, tests or care options you do or do not want performed. This document is only referred to if you are unable to express your preferences at the time consent is required. It lets your physicians, hospitals and family members know what your preferences are.
If you are anxious about what will happen to your estate or what will happen if you become incapacitated, don’t be scared – contact your estate planning attorney. He or she can explain these documents and any others it would be appropriate for you to include in your planning. The process is painless and will be one less thing you need to be scared about next Halloween.