Getting married or having a child might serve as a strong motivation to help someone create an estate plan. Other times, it might be career success or the acquisition of certain resources that motivates a young professional to put together an estate plan.
All too often, those creating an initial estate plan rush through the process and do only the bare minimum. The average adult creating their first estate plan will likely benefit from the inclusion of the three types of paperwork below.
The most important document included in an estate plan will usually be the document at outlines what happens with someone’s property when they die. A will is the simplest and most popular testamentary document. People in a host of different circumstances, including those with family members who have special needs or those with high-asset households, might decide to create a trust to control what happens with their property when they die. Testamentary documents provide instructions for the distribution of someone’s property and can also provide protection for dependent family members.
Powers of attorney
Some people will experience a short-term medical emergency, possibly caused by a traumatic incident, that will leave them dependent on the support of others. A coma after a car crash or similar medical emergency would mean that a testator cannot manage their finances or communicate their medical wishes to others. Powers of attorney help ensure that there is an agent capable of handling someone’s affairs when they cannot do so on their own behalf. Durable powers of attorney might even protect someone from guardianship or conservatorship if they become permanently incapacitated.
Advance medical directives
Simply granting a trusted individual the authority to make medical decisions often won’t be enough guidance. An advance directive talks about someone’s medical preferences, including their stance on pain management, life support and even anatomical gifts. That document will make it clear to the person authorized to handle medical matters what choices they should make on behalf of an incapacitated individual. The document both protects someone from receiving the wrong care during an emergency and takes the pressure off of their loved ones during a difficult time.
Those creating an estate plan will always have the opportunity of adding more documents to their plan (and modifying those that they’ve already created) as their circumstances change. Yet, starting early and then making changes as life evolves is one of the most effective and protective approaches to modern estate planning.