Regardless, there are a handful of “must have” estate planning documents you must create before anything else.
A will is a legal document that describes your intentions for your estate when you pass away.
Without a will, a person would die “intestate.” In that case, state law divides and distributes the estate to surviving family members based on their relationship to the deceased. No consideration is given under state law to how “close” such family members were to the decedent (or if they fought constantly).
Contrary to popular belief, a will has absolutely no legal authority until the maker of the will dies … and the will is given to the proper probate court within the time limit prescribed by state law. Accordingly, your will has no authority to appoint financial or health care decision-makers (agents) for you if incapacitated by an illness or injury (more on that later). In many states, a will is required to appoint the guardians (backup parents) in the event minor children are orphaned.
What could be more important than appointing the people you want to rear your children if you are not around?
A health care directive, often known by other names such as an “advance directive,” is a document you sign now to specify the type and extent of medical and personal care you would want later were you unable to make and communicate your own decisions. Everyone age 18 and older needs to have this fundamental legal document signed, a copy on file with their physician, and a copy given to each of their appointed agents.
A health care directive appoints the persons (whether in order of priority or as a “team”) you have selected to make end-of-life decisions, so your family and the medical staff know what to do (or what not to do). A directive can take some of the worry and anxiety out of your final days for your family, as they will know your wishes when it comes to making tough choices. With that in mind, choose your “point persons” carefully. They will be charged with carrying out some potentially difficult decision and, perhaps, difficult family members.
A Power of Attorney is a legal document giving another person—sometimes called “the attorney-in-fact” or “agent”—the legal authority to make decisions on business matters and other issues on your behalf. The exact scope of the power given is spelled out in the document itself.
These powers cease when you pass away. They also may no longer be in effect when you become unable to make or communicate decisions. A “durable” power of attorney should be used in that situation, or a health care directive.
It is your authorization for named persons to view your medical records and discuss your care with medical providers.
Without this document or specific authorization, there is the possibility your doctor may decide not to speak to your designated “point persons” — the persons you want to make those tough decisions about your care if you are in an unresponsive state.
Generally speaking, a trust is a legal entity with at least three parties: the creator of the trust, the trustee, and the beneficiary. With most “revocable living trusts,” you are all three parties.
Depending on your circumstances, there could be advantages to establishing a trust. The most common advantage is avoiding probate. This can help streamline administration of your estate should you become incapacitated and upon your death, keeping your plans private in the process.
Some irrevocable trusts may protect trust assets from creditors. For example, trusts established under a will or revocable living trust can protect the inheritance for loved ones from squandering, divorces, lawsuits and bankruptcies.
The choice of the right trust depends on a great many factors. Consult the experienced estate planning attorneys at Estate Planning and Legacy Law Center, PLC to thoroughly review your situation and your objectives.