Any adult, 18 years or older, is responsible for his/her own property and life. If you do not have any of the following documents in place and an illness or accident should occur where you become unable to speak for yourself, the court may be the one deciding what happens to you and your property.
When should you complete your estate plan?
Now! You should complete your estate plan now, while you are in good health and of sound mind. No one can predict when or where an accident or an illness will happen that could disable an individual for a period of time or for life, or even take a life. Advance planning ensures that your wishes are carried out when that “what if” happens. By being proactive and having certain documents in place, you can:
- Name a person to manage your finances and business, such as paying the bills, talking with your health insurance company in regard to your benefits, making payroll, etc.
- Name a person to make medical decisions if you become unable to do so and to obtain medical records to make informed decisions about your care.
- Direct a physician on your wishes in regard to life support issues.
- Direct how your property and assets are to be distributed at your death.
Essential Documents Needed During Your Life
Durable Financial Power of Attorney – this document allows you to name a person or persons to manage your financial affairs for you. This document can be made effective the date that you sign the document or later when an event occurs, such as an automobile accident or a mental illness. You should name a person whom you trust to manage your financial affairs. Most spouses name each other as primary agents and name one of their children, a sibling, or a parent as an alternate agent. If you are in a non-traditional relationship, you may want to name your significant other.
If you do not have a Durable Financial Power of Attorney, a guardianship may have to be filed to make sure your financial affairs are kept in order, such as paying bills, obtaining Medicaid benefits, etc.
Advance Directives – this would include the Health Care Power of Attorney, Living Will Declaration, Health Insurance Portability and Accountability Act of 1996 (HIPAA) waiver, and Organ Donor Registration. You would name an agent to have the authority to make medical decisions when you become unable to do so. You should name a person whom you trust and with whom you have discussed your wishes with. Most spouses name each other as primary and one of their children, a sibling, or a parent as a second contact. If you are in a nontraditional relationship, you may want to name your significant other.
The Health Insurance Portability and Accountability Act of 1996 (HIPAA) form allows you to name a person or persons to have access to your medical records to assist them in making an informed decision or dispute a medical bill.
The above powers of attorneys (financial and health care), declarations, and waivers all become null and void at your death. Upon your death, the various financial institutions, creditors, court system, etc. will make inquiries to see if your estate has a named agent to manage your affairs at your death. Below are two documents in which you will name this agent.
Documents that Direct the Distribution of Your Property During Your Life or After Your Death
Trusts – A trust is a document that allows an individual to accomplish specific goals such as plan for your care if and when you become disabled, plan for care for a disabled spouse or child, and manage your affairs upon your death. It is a private document. With a trust, you can name a person or persons or a corporation who will manage your assets (property) while you are alive and when you die.
There are numerous types of trusts: Living, Revocable, Irrevocable, Special Needs, Charitable, Medicaid, Grantor, Qualified Income, Family, and Pet. Not every individual needs a trust. Having a trust is dependent on several factors in your life, including your assets, property, health, family, and what your wishes are in regard to how you want to live, protection of assets and property, and how you want your property distributed at your death.
This is a document that should be prepared by an estate planning attorney who understands your situation, financially, medically, and family, and understands your wishes.
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