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Will:
The will is a crucial part of your estate plan that allows you to decide how your finances, property, and personal belongings get distributed after your passing. In the will, you can name beneficiaries for your assets, appoint guardians for minor children, and provide instructions for charitable giving. Just like other pieces of your financial plan, it’s important to regularly review your will to ensure that it stays aligned with your goals.
Without a will, your family will have no control, leaving the courts and state law to determine who receives your assets. This can cause delays, unnecessary taxes or expenses, and even family disputes as some of your family members may have different views on how your estate should be handled. You’ve worked hard for what you own, why let the government determine what happens to it?
Financial or Durable Power of Attorney:
The financial power of attorney provides broader powers than simply naming someone as POA on your bank account alone. Your financial power of attorney can manage your accounts, pay bills, file taxes, and handle all other financial matters on your behalf if you’re unable to do so. If you want your spouse to talk to your credit card company or the mortgage or utility folks, but both your names aren’t on these accounts, the companies won’t speak to him or her without having this document.
Make sure to communicate your expectations in advance to your chosen person to ensure they understand your financial responsibilities and goals. Just like with your will, it’s important to regularly review and update your financial power of attorney as needed.
Advanced Medical Directives:
Medical directives allow you to express your healthcare preferences and appoint someone to make medical decisions on your behalf if circumstances leave you unable to communicate for yourself. The exact documents needed can vary from state to state, but they generally include a living will and a healthcare power of attorney.
- The living will allows you to tell doctors what kind of medical treatment you want in certain situations, like if you're on life support or nearing the end of your life. It helps make sure your wishes are known and followed by healthcare providers and your loved ones.
- The healthcare power of attorney lets you pick a trusted person, like a family member, to make medical decisions for you when you can't make them yourself. This person will make sure your healthcare preferences are respected and communicate with doctors on your behalf. Without the healthcare POA, medical facilities or other family members may make decisions against your wishes.
More so than the other 2 components, the medical directives are important for everyone regardless of age or wealth. Imagine being in a car accident and being unable to speak for oneself? Even 18-year-olds with no assets should get these documents in place.
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