While the impacts have varied, we all know how much this last year has been different. It has disrupted the structure of what most of us consider normal. Some have lost loved ones, some have lost jobs, some have spent days or weeks battling COVID-19.
To the extent possible, when medical issues arise it is important to have a plan in place. A plan to help you and your family deal with the situation. However, most Americans do not have such a plan. In fact, according to recent surveys, 68% of people do not have a will. Interestingly, adults between the ages of 18-34 years-old are more likely to have a will then those between 35-54 years-old. A will is just one of many estate planning documents that it is important for people to have. The four below documents are some of the most important, all of them can be changed or revoked by the author as life situations change.
Most people know in general what a will is. A will is a legally binding instrument dictating the division of one’s possessions upon the persons death. However, in the case of parents with children under 18 years of age, a will can establish who the guardian for the children would be if something happens to both parents. A will can also set up trusts for the minor children, divide up personal, real property and financial assets. In short, a will is a plan for what happens when a person dies.
Durable Power of Attorney
A durable power of attorney document is a flexible document that can be used in many different situations. A power of attorney document authorizes a person (Agent) to act, typically for financial matters, on behalf of someone else (Principal). In the context of estate planning, typically the document sets for a trigger that it becomes effective upon the Principal being deemed mentally incapable of making such decisions themselves by a physician.
Medical Power of Attorney
A medical power of attorney document is similar to the durable power of attorney, but it focuses on medical decisions. Once again, this document is typically set up with a trigger to take effect if the Principal (the author of the document) is incapable of making such decisions the Agent (typically a family member) is then given the authority to make such medical decisions on their behalf.
A physician’s directive, sometimes called a living will or advanced healthcare directive, allows a person to communicate their wishes regarding medial treatment if in the future that person has a condition that is considered terminal and does not have the ability to make these decisions for themselves.
Life changing situations are never easy. But with a little planning ahead of time, they can become more bearable. There are other documents and estate planning strategies that can be used in various circumstances, but these documents are the most fundamental. It is important to talk to an experienced attorney about which is best in your situation.