When setting up your estate plan, you need to make sure it includes the right legal directives. The legal directives are the documents that allow you to carry out your estate plan. There are numerous legal directives that you need to establish an estate plan; here are five essentials that should be included in most estate plans.
Advanced Medical Directive
First, you need an advanced medical directive, also known as a medical power of attorney. This will allow you to appoint someone to act as your health care agent. This is someone who you have confidence in to make healthcare decisions for you if you are not in a position to make them yourself.
For example, if you are in a coma, your health care agent will make medical decisions for you. Having this document will prevent the courts from appointing someone as your guardian if you are not medically capable of making medical decisions. With this document, your medical decisions will be in the hands of someone who knows you.
Living Will
A living will is a document that states what your wishes are if you are in an end-stage or terminal medical condition. A living will states what your health care wishes are. It is a good idea to have both a living will and an advanced medical directive, as they serve different functions.
With a living will, you can include other important documents such as a do-not-intubate order or a do-not-resuscitate order if that is what you want.
Financial Power of Attorney
Next, you are going to want to establish a financial power of attorney. The point of a financial power of attorney is to have someone manage your assets in your name. They can also transfer items into your trust.
There are two different types of financial power of attorney. The first is a durable power of attorney, which, if established, goes into effect right away. The second is a springing power of attorney, which is only put into effect if you are determined to be mentally incapacitated by the courts and by an attorney.
Revocable Living Trust
A revocable living trust is designed for you to put all your assets together and to determine where your assets will go when you pass. Your assets will be placed in a trust with a living trust, which you can still fully control. Placing your assets in a trust will allow the items to be passed onto your loved ones without the courts' involvement.
Putting items into a living trust will change the tax implications of the items that you own. Effective estate planning will have an impact on your tax bill.
An advanced medical directive, a living will, a financial power of attorney, and a revocable living trust are four of the legal directives you will want to include in your estate plan. You will want to work with an attorney and accountant to create your estate plan, as it will have an impact on your life and taxes. Contact a company that offers estate planning services to learn more.
Share
