Estate Planning 101
Planning on dying sometime in the future? You need an estate plan.
While estate planning sounds like something only a land baron needs, everyone has an estate. In legal terms “estate” just means “the things you own.” You may not think you have enough of an estate to bother with planning, but you’ll leave a mountain of stress and questions behind if you don’t.
If you have kids, a partner, spouse, or property – you need to make an estate plan.
It’s not complicated. You need three documents:
- Will. This states who-gets-what when you die, names guardians, and specifies a trusted person to be in charge.
- Living will. This is also called an advance healthcare directive. It states your end of life wishes for medical care that you do -- or don't -- want.
- Power of attorney. This third document compliments the others in certain circumstances. Let’s imagine aren’t able to take care of things for yourself. Power of attorney names someone who can make decisions for you.
A will (short for “last will and testament”) is a state-specific, legally binding document that says what happens to your money and property. Your will typically addresses the following issues:
- Executor - ensures the instructions you left are followed appropriately.
- Beneficiaries - lists who you want to receive your assets.
- Guardians – designates care for your children or pets.
- Investments/debt – lists how to distribute investments or pay for debts.
Power of Attorney (POA)
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 another makes financial decisions. For example, you may want your nurse sister to make your medical decisions, and your accountant brother handling your financial ones.
Here are example scenarios where a POA is vitally important:
- You have had an accident and are unconscious.
- You are suffering from a mental illness.
- A parent is suffering from dementia or Alzheimer’s disease.
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 defines your wishes for end-of-life medical care.
The living will frequently includes:
- 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.
A note on digital assets
So much of what we do today is online -- banking, investment accounts, even your photos and Facebook page might be considered assets you want to protect and share. Plus, you'll want to make it easy for your executor (or family members) to access that stuff after you're gone.
Getting Started: What is most important to you?
Watch VitalTalk's Dr. Tony Back, who can 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
Need more help?
See Legal Help to guide you in creating your documents.