Estate planning overview, wills, living wills and power of attorney
We all know we need one. In fact, it's probably been on your list for years. But for over half of adults in the US, it still isn't done. Yet! If it seems complicated, you can relax, it really consists of just three documents - a will, a living will, and power of attorney.
The first document you’ll create is a will (short for “last will and testament”). This is a state-specific, legally binding document that says what happens to your money and property and defines:
- Executor - ensures the instructions you left are followed appropriately.
- Beneficiaries - lists who you want to receive your assets.
- Guardians and Pets – designates care for your children or pets.
- Investments/debt – you can list how to distribute investments or pay for debts.
Your Living Will
This document goes by a few different names (advance healthcare directive, personal directive, advance directive, or advance decision), but no matter what you call it, it says what end-of-life medical care you want, like:
- Whether or not to continue life support if you are legally brain dead, in an irreversible coma, or dying from terminal illness.
- Medical procedures or treatments you do (or do not) want.
- Pain management wishes.
- Instructions for hospice care.
Your Power of Attorney (POA)
Your POA designates one or more people who have the authority to make decisions for you. You can split up duties, such as having one person make medical decisions while a different one makes financial ones in certain scenarios:
- You are have had an accident and are unconscious.
- You are suffering from a mental illness.
- A parent is suffering from dementia or Alzheimer’s disease.
Getting Started: What is most important to you?
Watch VitalTalk's Dr. Tony Back and GYST Co-Founder Chanel Reynolds show you how to get the ball rolling and talk about this with your family and friends.
"You only live once, but if you do it right, once is enough." - Mae West
Estate Planning FAQ
"Do I really need an estate plan?"
"What happens if I don’t have a will?"
Dying without a will (or having one that no one can find) is a super bad idea. In legal terms, it’s known as “dying intestate.” If this happens, your assets go into probate, where your state has laws that dictate who gets what. Typically, if you’re legally married, it all goes to your spouse. But not always and, frankly, sometimes things can get pretty weird. After all, if you don’t really see eye-to-eye on everything with your state in life, don’t expect the situation to be any different in death. Besides, probate can take years, and your estate may have to pay attorney fees and other things, which are best avoided.
"Where do I start?"
Typically people start with the will, because if you think about it, that’s the only document that’s guaranteed to get some use.
"Is it important to get help with my estate plan?"
We think so. You need a process, like GYST’s, that can ensure you avoid these common mistakes:
- Not doing one at all. (Congrats, you’re already here!)
- Not completing the process.
- Doing one incorrectly, which can result in the will not being legally binding.
- Leaving stuff out. People often forget about pets, businesses, or how to split assets among children.
- How and when assets and money are given. Some financial planners recommend spacing out payments instead of lump sums.
- Not updating your will when you have kids, remarry, acquire new assets, or make other life changes.
"Do I need a trust?"
Whether or not you need or should have one really depends on which state you live in and your individual situation. Trusts are often set up and included in a will because they help you avoid probate and get your assets more quickly into the hands of those you want to have them. Read more about trusts and revokable living trusts.
"Should I consult an attorney?"
While you are not required to have an attorney to draft a will, there are circumstances where doing it yourself may lead to problems. If any of the following circumstances are true about you, the America Bar Association advises consulting one:
- You, your spouse, or children have international citizenship.
- You own or have an interest in property in another state.
- Your assets exceed a certain amount (a few million usually, but changes each year).
- You or your spouse are getting re-married and could have complications with trusts, property ownership, or guardianship for your minor children.