Perhaps you and your spouse are awaiting the birth of your first child, or maybe you are approaching retirement. Whatever your circumstances, it dawns on you that you have not even made a will.
This is a good time to begin thinking about such matters. What are the best tools to have when you are starting to build your estate plan?
If you have not made a will, you are not alone. Over half the adults in America do not have one. Keep in mind that a will contains your instructions for the distribution of your assets. It protects your loved ones after you die, and it is as important for nontraditional couples as it is for married couples. For example, let us say you have a partner to whom you want to leave your estate. If you pass away intestate, or without a will, the court will distribute your assets to your closest relatives, not your partner. However, your will can change that.
A medical power of attorney
If you are in an accident and incapacitated as a result, you may be unable to talk to your doctors. However, the physicians want to know your preferences as they pertain to important medical matters. A medical power of attorney allows you to name someone you trust to make medical decisions on your behalf. This will prevent any second-guessing or misunderstanding about your wishes, and the doctors can proceed confidently with your treatment.
A financial power of attorney
Much like the medical power of attorney, a financial power of attorney goes into effect in the event you become incapacitated and cannot manage your financial affairs. In this document, you name someone you trust to make such decisions in your stead. If you recover your health, you can simply take back the control of your finances.
Creating your will and the two powers of attorney will get you off to a good start on your estate planning journey. However, there are several other tools such as various kinds of trusts as well as a living will to consider when you feel the time is right.