There are some basic estate planning documents that should be included in just about everyone’s estate plan. The following five, along with their purpose, are the most commonly found.
1. Healthcare Power of Attorney – This estate planning document allows an individual to designate another person to make medical decisions for them when they cannot make decisions for themselves. A word of caution, if you are married, do not automatically assume your spouse will be able to speak on your behalf. Some healthcare professionals in Cincinnati want to see a legally executed document that grants your spouse that authority.
2. General Power of Attorney – This estate planning document gives an individual you have chosen the ability to manage your financial affairs if you are unable to do so. One example is if you are in the hospital for an extended time and can’t get your car or mortgage payment made. The individual you granted the power of attorney can do that on your behalf.
3. Living Will – Some people confuse this estate planning document with the healthcare power of attorney document. A living will documents your wish that life-sustaining treatment, including artificially or technologically supplied nutrition and hydration, be withheld or withdrawn if you are unable to make informed medical decisions and are in a terminal condition or a permanently unconscious state. I recommend all my clients execute this document. By doing so, you make sure your loved ones are not burdened with difficult choices should something happen to you.
4. Will – Most people understand that a critical estate planning document is your will. And most understand what a will does. To let your heirs know how you want your assets distributed. That said, many (it is said around 50%) of all adults in the US don’t have a will. If you are in that situation and unexpectedly die, you are considered to have died intestate. Translated, here in Cincinnati, the state of Ohio will step in and make those distribution decisions for you. If you only have one heir, that is easy. However, things can be complex and downright contentious if there are multiple heirs. The state doesn’t take into consideration, for example, that you have been estranged from a sibling for ten years. That sibling will get their “fair” share as determined by the state. Just something to remember.
5. Trust – the last estate planning document is a trust. While not everyone needs a trust, especially if you don’t have much in the way of assets, many do. A significant benefit of having a trust is avoiding probate. And it also can be helpful before you die if you become incapacitated.
There you have it. Five key estate planning documents you should include in your estate plan here in Cincinnati. I understand that the 50% of adults who don’t yet have an estate plan have reasons. The most common I’ve heard is “finding the time.” I’d like to take this opportunity to let you know that the entire process, from start to finish, is not as time-consuming as you imagine. Nor is it difficult. You probably have 90% of it in your head right now – who gets what, what should happen if you are unfortunately in a permanently unconscious state, etc. Let’s get together and get it all into legal documents that will protect you and, even more importantly, your loved ones. Call me to schedule a consult at 513-399-7526 or visit my website for more information at www.davidlefton.com