Estate Planning and Advanced Directives

What is Estate Planning?

Estate planning is how you or your family arrange the transfer of assets in case of death. An estate plan aims to preserve as much wealth as possible for your family and provide you with flexibility before your death.

Why should I do Estate Planning paperwork now?

Having your estate planning paperwork ready can save headaches and heartache for your loved ones. You never know when something might happen to you, and planning will protect your family. If you have any property, including a car, furniture, or jewelry, you should specify who would inherit it at your death. 

What are Advance Directives?

Advance Directives are legal documents that give instructions for medical care and only go into effect if you cannot communicate your wishes. You choose a family member or friend who will speak and act for you when you cannot speak for yourself. 

The two most common Advance Directives for health care are the Living Will and the Durable Power of Attorney for Health Care. You can also have a Financial Power of Attorney, which allows the person you choose to access your money in case you are hospitalized and need someone to pay bills, etc. 

Why should I write Advance Directives now?

Preparing these ahead of time can help avoid problems later on. You should send copies of your medical power of attorney and living will to your medical providers to keep on file. These documents ensure that someone knows your healthcare wishes and can speak for you.

What documents do I need?

Estate Planning Documents:

• Last Will and Testament - Instructions to your family and friends about how you want your money and property distributed. 

• Revocable Living Trust - Can help in the smooth transfer of property. A revocable living trust is a legal document that allows you to transfer ownership of your assets (such as property, investments, and bank accounts) into a trust during your lifetime. You can change or revoke it at any time, as long as you are mentally competent. This document can save your heirs both time and taxes.

• List of important documents and where to find them. If you have a safe deposit box, be sure at least one other person is added to the account and knows where to find the key.

Advance Directive  Documents:

• Advance Directive for Health Care or Living Will - Treatment preferences, in case you can't communicate them. It protects you from treatments you don't want and tells doctors which treatments you do want. 
• Durable Power of Attorney for Healthcare or Healthcare Proxy - Choose someone to make healthcare decisions if you can't.
• Financial Power of Attorney - Choose someone to manage your finances if you are temporarily or permanently unable to do so.

Other Documents:

• Organ Donor Paperwork - In the event of your death, your organs may be able to restore sight, help a burn victim, or save a life. Please consider becoming an organ donor!

How do I get started with Estate Planning and Advance Directives?

You can write most of these documents without an attorney, and they will protect you and your loved ones, although working with an attorney and tax advisor is helpful. Professionals will help you communicate your wishes clearly, avoid mistakes, minimize taxes, and adjust your plans as circumstances change.

Be sure to have any documents notarized so that they are valid.

You will need to consider and record your assets. Walk around your home and list anything of value. Also, make a list of all your financial accounts. Anyone helping with your finances must know about bank and investment accounts, monthly bills, and other expenses.

You'll also need to consider who you want to leave each asset with. You can choose anyone–family members, friends, and even charities like the HCMA. 

If you can't afford legal advisors, there are many books and programs that will walk you through these documents. An excellent source is the Nolo Press Estate Planning Bundle. AARP has links to free Advance Directive forms by state. There are other free materials available online.