What documents does everyone need? They absolutely need a will or a living trust. They definitely need a medical power of attorney and an advanced directive. An advanced directive allows you to choose the end of life care you want and direct your agent as to your choice . There simply isn’t an adult that shouldn’t have these documents.
Also, another fundamental planning document is a financial power of attorney. Like a medical power of attorney, a financial power of attorney chooses who will make your financial decisions for you if you are unable to make them for yourself due to incapacity. A revocable living trust also succeeds in this purpose. So you need either a financial power of attorney or a revocable living trust. Again, there isn’t an adult who owns assets that doesn’t need a financial plan for incapacity through either a revocable living trust or a financial power of attorney.
There are two other documents that some people need. One is the appointment of a funeral agent. You can sign a document selecting a particular person to make your funeral arrangements and to decide on the disposition of your remains, such as whether you’re going to be cremated or buried and where your remains are going to be interred. The reason many people don’t need these documents is that there simply is no dispute who is going to make their decisions. By statute, the spouse has priority of decision making in absence of a funeral agent document, and the children have the next choice. So, some people need to clearly appoint an agent to prevent a dispute.
One final document is the selection of a guardian in advance. As you remember, we want to avoid guardianship by having powers of attorney and/or a revocable living trust. So if you’ve done the planning, why would you need to select a guardian? We generally draft this document as a final robust part of planning when we think there is a family member who is likely to create a dispute in case of incapacity. Not only do we want to choose who will be the medical agent, the financial agent and the trustee, sometimes we want to specifically say that we want to select those persons to be guardians. If that ever was necessary and more specifically, to deselect a person we never want to have guardian. With such a document, if that person attempts to create a guardianship, we can dismiss the guardianship because they have no standing to either bring a guardianship action or to become appointed guardian. So, it’s not a document we draft for everybody, but when needed, it is very helpful.
We want to help guide you with what you need for your unique situation. As this ends our estate planning overview series, I hope this series has helped eliminate the fear and unpredictability from your estate planning process.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, specific tax, legal or accounting advice. We can only give specific advice upon consulting directly with you and reviewing your exact situation.
