As an attorney who practices primarily in estate planning, I often encounter people who ask, “Why do I need an estate plan?”
I usually answer, “So your last wishes are carried out properly in the most timely and cost effective way possible.” However, this statement does not cover all aspects of estate planning. In my opinion, there are four essential documents to almost every estate plan.
First, there is the living trust. As many people know, a trust is a testamentary document that puts real and personal property in trust, which means such property does not go through the lengthy and costly probate court process. The property can thus pass to the heir more quickly and with less cost.
Second, a pour-over will is essential to make sure that any property accidentally left out of the trust or acquired after the trust was signed is added to the trust. A pour-over will essentially states, “I leave all property not named in my trust to my trust.”
Equally important, especially when a person is alive, are an advance healthcare directive and a durable power of attorney. An advance healthcare directive allows a person to choose who would make medical decisions should that person become incapacitated. A durable power of attorney allows a person to choose who would make financial decisions should that person become incapacitated.
Many people’s top priority is not what happens to their estate once they die; however, I think all of us care who would make our medical and financial decision if we are not in the right state of mind to make these decisions. I often feel that more emphasis is put on the importance of the will and trust documents, which are very important after a person passes. However, I would like to underline the importance of an advance healthcare directive and durable power of attorney.
Would you want your emotional mother to be in charge of making life ending decisions? Would you want your financially irresponsible child in charge of your financial affairs? I don’t think so. With these documents, you have the power to select who these people are. In addition, you can choose what power you give your agents. For example, would you or would you not want to be resuscitated with a life terminal disease? You have the power to make these decisions even while incapacitated by limiting your agent’s power in your advance healthcare directive. You can similarly limit the power of your agent in a durable power of attorney.
Even if you do not have any estate to will or leave in trust, both an advance healthcare directive and a durable power of attorney are something we should all think about obtaining.
Tony is the son of a retired thirty-eight member of Teamsters Local 495. For more information, please contact Tony at 626-285-7033 or firstname.lastname@example.org