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Three Essential Estate Planning Documents for Everyone Over 18
Death is inevitable in all of our lives. This does not mean legal battles, high attorney’s fees, and years of fighting in the courts are inevitable. A few basic documents of legal significance stating your desires in the event of an unexpected accident or your death can keep your family and friends from feeling regret, doubt, or anger in trying to sort through your estate. Everyone over age 18 should consider having a (1) will, (2) power of attorney, and (3) advance directive.
(1) The Importance of a Will
If you die without preparing a legally enforceable, valid will, you are considered to have died “intestate.” In general, when a person dies intestate the laws of the state will determine how the estate is divided up. State law follows a process known as intestate succession to determine which family members take the deceased person’s assets. This process is based on blood lines and will depend on if the decedent is married and who survives them, such as children, siblings, and parents. Intestacy does not include friends, unmarried partners, or provisions for the care of your pets that you might wish to provide for at your death.
A will, also known as a Last Will and Testament, allows you to divide up your money and property and make your final wishes known. You can specify what is to be done with your remains, either burial or cremation, and what type of memorial service you want to have. A will allows you to give your property away as specific items to specific people (e.g. your tools to your brother, a diamond necklace to your niece) or as a general gift (e.g. sell all of my property and divide the cash proceeds equally among my three children). There are endless options on how to direct your estate to be administered.
A will names an executor to be in charge of carrying out your final wishes as stated in the will. To be legally enforceable, a will must meet certain requirements, such as being in writing, signed by you, and in the presence of witnesses. If you have minor children, you can establish who will care for the children upon your death. For more details on estate planning with children, read Estate Planning for Parents of Minor Children.
The law does place some limitations on how you can divide up your estate. The most common consideration is that you cannot disinherit your current spouse entirely through a will. Indiana law allows a spouse a minimum share of your estate regardless of what your will says, unless you have a prenuptial agreement stating that your spouse agrees to take nothing. You can, however, disinherit your children in Indiana.
(2) Power of Attorney
A durable power of attorney allows a person you name to manage your financial and legal matters if you are incapacitated or incompetent but not deceased. The term “durable” allows the power of attorney to be in effect when you are physically or mentally unable to make decisions for yourself. Typically, a doctor must declare you to be incapacitated for the durable power of attorney to allow your attorney-in-fact to take control. Life has many uncertain turns of events. A durable power of attorney allows you to pick a person you trust to have the authority to make financial and legal decisions when you are unable to do so.
(3) Advance Directive
An advance directive allows you to express your wishes for end of life care, such as if you do or do not want to be put on life support in the event of a serious medical situation. The advance directive also appoints a person to make medical decisions and access medical records if you are not able to do so. If you are only temporarily unconscious or otherwise unable to make your health care decisions, the advance directive will allow the person you designate to make the necessary decisions to get tests, treatments, and other medical procedures performed. In the event that you are unlikely to recover from a medical situation, the document provides direction for making tough decisions about your care. An advance directive is a helpful way to show your family and friends, in writing, what you decided to have done for end of life care, saving those you love from needing to make tough decisions and possibly live with doubt or regret about their decisions.
Make Plans Sooner Than Later
The best time to plan for, create, and sign these documents is before you need them. The worst case scenario is not getting around to making plans before an unexpected situation arises that leaves you unable to make decisions for yourself or causes you to die without a will. The process is not difficult and can be done affordably.
Stay up to date on your plans. Review your documents every year or two and make sure the written plan is the plan you still wish to see carried out. If any major life events happen, such as marriage, divorce, or the birth of a child, this presents a good opportunity to review your plans and make updates.
NOTE OF GENERAL DISCLAIMER: No Attorney-Client Relationship is formed as a result of information provided on this Web site. The site is for informational purposes only and is not intended to give specific legal advice.
