There is certainly not a one-size-fits-all estate plan. Instead, you have a “menu” of estate planning documents and you should choose what best fits your family and your goals. There are primarily five documents that you should, at least, consider when you embark on the estate planning journey:
- Living Will Declaration: This document specifically deals with artificial nutrition and hydration, and what your wishes would be if they would be needed. You have three “answer choices” – 1) yes, you do want artificial nutrition and hydration; 2) no, you do not; or 3) you leave the decision to be made by your Health Care Representative. You ultimately initial next to your preference.
- Health Care Proxy: This document allows you to designate who will make health-care decisions for you if you are unable to make such decisions for yourself. It also should include HIPAA language, which allows your Health Care Representative to communicate with your medical professionals. It is recommended, but not required, to have a Successor listed.
- Financial Power of Attorney: This document allows you to designate who will make legal and financial decisions for you if you are unable to make such decisions for yourself. It is often recommended to have a “General Durable Financial Power of Attorney” so the designated individual’s power is not restricted in any way from serving in your best interest.
- Last Will and Testament: This document primarily does two things: 1) names who gets your “stuff” (your beneficiaries) after you pass away and 2) names who is in charge (Executor). A Judge, through a Probate Court proceeding, “officially” appoints the Executor and grants him/her the appropriate authority to administer and distribute the deceased person’s estate.
- Living Trust: There are multiple types of Living Trusts and different families create Trusts for different reasons. Though, the two most popular reasons are to 1) avoid probate and/or 2) gain asset protection against long-term care costs (i.e. Medicaid planning strategy) or lawsuits (i.e. business owners, farmers, high liability professions).
Simply put: an estate plan should evolve as you age. The estate plan that you created when joined the armed services at eighteen or when you had your first child may not be “enough” to satisfy your goals anymore.
Society is different and has certainly evolved, too. Now, more than ever, people want to avoid probate and/or want to gain asset protection against long-term care costs, lawsuits, and/or creditors. Learn your options – the five documents above are a great start. Making an informed decision, as it relates to your estate plan, may be the best gift you ever give to your family or beneficiaries.
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Jennifer Rozelle, JD