WARNING: At some point in your life the unexpected will
happen. If that “unexpected” is
sickness, becoming mentally incompetent, or dying, you will need certain legal
tools to get you through that period. As
you are guaranteed to either get sick, become mentally incompetent, or die, or
all of them, my advice to you is obtain the following four documents:
Will: A Will directs how you want your
property distributed on death. It also may describe, among other things, who is
to manage your Estate (e.g. personal representative or executor), who you want
to take care of your children, and instructions about the payment of debts. It does not avoid probate. It is a “one way ticket” to probate.
Durable and General Power of Attorney: A
power of attorney gives someone the power to act on your behalf for legal
matters. A durable power of attorney
springs to life if you are not medically competent to act for yourself. A
general power of attorney gives someone broad authority to act on your behalf
and should be carefully drafted to give authority in every legal area that you
will need.
Healthcare Power of Attorney: A
healthcare power of attorney gives someone authority to make medical decisions
on your behalf should you lack the ability.
Living Will: A living will informs and gives direction
about what medical treatment you want should you be unable to express you
wishes. In other words, if you are
unconscious or mentally incompetent, this document will state whether you want
life sustaining treatment, heroic lifesaving measures, or simply manage the pain while you pass.
The above documents are the
essential estate planning tools. If you
do not have the documents above, there are laws in place to compensate for your
lack of planning; however, your end of life could become more complicated and more
expensive for you and your loved ones. Here
are the legal alternatives that take the place of the above estate
planning tools:
Missing Estate Planning Tool
|
Explanation
of Why You Do Not Want This Result
|
Will
|
If you die leaving no will, the State will decide
how to divide your assets at death. Please know that the rules for
distribution may cause you to enrich someone that you did not intend or wish to
enrich.
|
Durable and General Power of Attorney
|
A conservator is someone appointed by a court
that manages all your assets, if you are not competent to do so (e.g. you are
addicted to drugs, suffer from dementia, etc.). The conservatorship is frequently thousands
to administer.
The system is ripe with mismanagement, is cumbersome to administer, and
can take hours of your loved ones time to administer.
|
Healthcare Power of Attorney
|
A Guardian is someone appointed by a court that
manages all your healthcare needs. If
you value privacy, you will no longer have it with the guardian process as
your healthcare is the subject of the court.
Moreover, it can costs thousands to administer.
|
Living Will
|
If you have not planned for your end of life,
someone will plan for you. This may
mean that you are placed on life support for a prolonged period. Moreover, it
means that you may burden your loved ones with the decision to terminate or
extend life support.
|
