Important Estate Planning Documents
Many people think having written a Will, they are all set on the Estate Planning front. However, there is more to include in your estate plan to make certain you and your assets are protected. A successful estate plan also provides methods for your family members to access or control your assets should you become incapacitated.
4 Estate Planning Must-Haves:
The list of documents every estate plan should include:
- A Will
- Durable Power of Attorney (Financial)
- Healthcare Power of Attorney (Medical)
- Advance Directive
In addition to these documents and designations, a well-laid estate plan should also consider the purchase of insurance products such
as long-term care insurance to cover and life insurance.
These may sound like complicated or expensive documents that only rich people have, but that’s not true! A Will is one of the main components of every estate plan.
A Will should be written in line with the way you want individual assets to be distributed. For example, if you’ve named your sister as a beneficiary on a retirement account or insurance policy (assets that typically pass outside of a Will to a named beneficiary), you don’t want to bequeath the same asset to a second cousin in the Will, because it could lead to a Will contest.
Durable and Miscellaneous Power of Attorney
A Durable and Miscellaneous Power of Attorney (DPOA), or Financial Power of Attorney, is essential to put in place, so the person you assign will be able to act on your behalf if you are unable to do so yourself. Absent a Financial Power of Attorney, a court may be left to decide what happens to your assets if you are found to be mentally or physically incapacitated, and the court’s decision may not be what you would have wanted.
This document can give your agent the power to transact real estate, enter into financial transactions, and make other legal decisions as if they were you. The owner of the DPOA can revoke the document at any time of their choosing (so long as the person has mental capacity).
Many families choose their spouse as power of attorney. However, in some cases, it may make more sense to have another family member, friend, or trusted advisor who is more financially savvy act as the agent. Regardless of your first choice, having back up powers of attorney in place is important in case something were to happen to the first person in line.
Healthcare Power of Attorney
A Healthcare Power of Attorney (HCPOA) designates another individual (typically a spouse or family member) to make important medical decisions on your behalf in the event of incapacity.
If you are considering executing such a document, you should pick someone you trust, who shares your views, and who would likely recommend a course of action you would agree with. After all, this person could literally have your life in their hands.
In both cases of Powers of Attorney documents, a backup agent should also be identified, in case your initial pick is unavailable or unable to act at the time needed. Like with the Financial Power of Attorney, backups are important here too!
Advance Directive or Living Will
An Advance Directive, otherwise known as a Living Will, contains written instructions for a person’s end-of-life health preferences. It’s a tough thing for most people to think about – let alone talk about – dying. But those who make mindful efforts to communicate their end-of-life preferences can increase their chances of receiving the type of medical care they want.
The Advance Directive instructs physicians regarding artificial life-support when patients cannot speak for themselves or are in a persistent vegetative state. In the limited set of circumstances, declarations you make in a properly executed Advance Directive as to artificial nutrition, artificial hydration, and the administration, removal, or refusal of life-sustaining procedures govern your treating physician’s course of action. Under Colorado law, a “life-sustaining procedure” is any medical procedure that only serves to prolong the dying process.
Missing Any of the Documents?
Remember that while these are the four estate planning must-haves, they are not the only documents you may need! Contact our planning attorneys to discuss any existing documents you have and what other documents would complete your plan. Feel free to give us a call (719-259-4971) or book a time to chat with one of our attorneys directly here!