People often assume that estate planning is only for the very wealthy. That it is a means of organizing wealth into complicated funds and trusts. The reality is that estate planning is for everyone. It doesn't require you to have amassed assets and property, it can be as simple as drafting a few pages of legal documents.
Each person's situation is different, but generally speaking there are a few key legal documents that no older person should be without. They cover the basics of what should be done if you are incapacitated and legally state your wishes for your things after passing away. They are often very inexpensive to create and can be drafted in relatively short order.
Estate planning is for everyone
One of the most important reasons to have your wishes in writing is that these documents are legally binding. Conversations with friends and family about what you want done should you suddenly pass away or be incapacitated are good discussions to have, but they won't hold up in court.
An estate planning attorney can help you draft these documents. They will be legally binding, stand up to scrutiny and leave you with peace of mind that your wishes will be fulfilled:
- Medical power of attorney - Also called "durable" power of attorney, medical power of attorney allows you to authorize a trusted friend or loved one to make medical decisions for you if you are unable to. If you, for example, fall into a coma after a major accident, this document can avoid confusion and arguing among friends and loved ones regarding what should be done.
- Living will - People often confuse a living will with the similarly named document that determines what should be done with your assets after death. A living will is a document which clearly explains your treatment wishes if you are unable to communicate. Combining a living will with a medical power of attorney is one of the most reliable ways to ensure your wishes are carried out.
- Last will and testament - This is what people typically think of when they imagine a "will". These documents formally layout what is to be done with your property, assets and cash. It also includes who will become guardians of your children, and even who should take care of your pets. People with simpler estates often overlook the value of a well drafted will. The truth is that it can avoid many arguments should you suddenly pass away.
As mentioned before, each person's situation is different. These three documents are an excellent start to estate planning, but your circumstances may call for something else.
Estate planning is not only for the very rich, it can be as simple as making sure people know your medical wishes, or who should take care of your cat. Don't wait to get started drafting your documents - it is often inexpensive and provides invaluable peace of mind.