I have many people tell me why they don’t need a will, or how they explained everything to their family so there is no need to write it down. This is the overwhelming belief with regards to wills and other estate planning documents. Unfortunately, telling your children how you want your estate to be distributed isn’t going to work. Just because you believe that you don’t have enough assets to create a will, doesn’t mean you don’t need one. A will can do several other things, other than distribute your assets amongst your loved ones. A will can alleviate stress on your grieving family, because it makes probate easier. It can help avoid family disagreements, because it reduces the chance of arguing over which child gets which family heirlooms. A will takes affect after you pass, but there are other documents you need for your incapacity while you are alive. Those documents are the power of attorney and advance directive. Collectively, your will, power of attorney, and advance directive are an estate plan, and it is important that you understand each document and why you need them.
A will is a written document that lays out your wishes as to how you want your estate to be distributed. Your estate can include a house, automobiles, money, family heirlooms, etc. A will can help avoid or minimize family disagreements, because you have explained how you want your estate distributed in a clear and precise manner. Most importantly, a will nominates who you want to care for your minor children. If you pass without nominating a guardian for your minor children, then the court will appoint a guardian for your children and it may not be who you would want to take care of your minor children. A will gives you peace of mind, knowing that your family will be taken care of after your death.
A power of attorney is a document that appoints someone to handle your financial affairs when you can’t. Through a power of attorney, you can authorize your power of attorney to handle real estate sales, pay taxes, speak with financial institutions on your behalf, pay your bills, etc. Having a power of attorney can avoid the costly proceedings of conservatorship, which is the process of the court appointing someone to take care of your financial affairs.
An advance directive, is a document that appoints a healthcare agent, who can make healthcare decisions for you when you are incapacitated and carry out your end of life choices if you are incapacitated. This document replaced the antiquated living will, and is easier for your loved ones and medical staff to use. The advance directive allows you to give guidance to your healthcare agent for various medical situations, such as autopsies, organ and body donation, your end of life choices, and nominates a guardian if the court believes you need one appointed. If you do not have this document, your loved ones could end up in costly court proceedings.
Having an estate plan can avoid unnecessary stress and worry for your loved ones when they are grieving your death or adjusting to making decisions on your behalf while you are incapacitated. Although this topic is not fun to discuss, it is necessary to plan ahead. Each of these documents requires that you be of sound mind, so it is important to have these documents in place before you need them.