There are four basic documents that form an estate plan: the will, power of attorney, health care proxy and declaration of intent. Though all are recommended generally, you should seek counsel to decide which are applicable to you and properly plan for your future and the future of your estate.
A will is a written document that dictates how you want your estate distributed upon your death. You, as the person making the will, are called the testator (male) or testatrix (female). In it, you appoint a person that will execute the particular provisions within the will. This person is called the “executor” (male) or “executrix” (female).
The following is a list of just a few of the many different areas that can be addressed in a will.
- Distribution of your real property
- Distribution of your personal property (with general instructions or specific items to be given to specific persons)
- Guardianship of your children
- Payment of gifts to charitable organizations
- Ability to file tax returns
Making a will and addressing these and other issues that may arise in the event of your death will give you the ability to direct to whom your assets will be distributed and for what and whom your estate will be used. It will also prevent question by your family about how you would like your estate managed and prevent strife amongst family members I distributing your estate.
Health Care Proxy
A health care proxy allows you (the principal) to appoint another adult as your agent for making medical and/or health decisions. It must be in writing, signed by the principal and two witnesses (that each attest to certain factors). This proxy allows the agent to make any decisions that the principal could make for himself if he were able to do so.
Often, a hospital or other health care facility will require that you have a proxy on file if you are receiving certain treatment or care. It is generally recommended that you have a health care proxy on file as part of your estate plan.
Durable Power of Attorney
A durable power of attorney permits an authorized person to perform certain tasks on your (the principal’s) behalf even if you become incapacitated at some point after signing it.
There are two types of durable powers of attorney: one is effective on the day that it is executed and continues to be effective (even if the principal becomes incapacitated). The other that is effective on the date on which the principal becomes incapacitated and can no longer make decisions for himself. The power of attorney must specifically dictate when it becomes effective.
The power of attorney will specifically dictate which powers it grants. You might consider having a power of attorney for some of the following reasons:
Examples of such powers are as follows:
- Avoid the need for a guardian or conservator
- Provide for banking, investing, etc.
- Allow for the sale of real or personal property
- Manage litigation (at any stage)
- Make gifts of bequests
It is generally recommended that you have a power of attorney on file as part of your estate plan.
Declaration of Intent
The declaration of intent allows you to express your wishes concerning life support and circumstances under which you wish for termination thereof.