They always say “It’s better to be safe than sorry,” and it can’t be more true than in the case of your life and estate.
Thinking about Estate Planning isn’t just for people living on Boardwalk and Park Place. People in all walks of life have assets that they want to stay in their family after they pass. They want to ensure their spouses, children, siblings or any other beneficiaries are taken care of for the foreseeable future. But what about before they pass? Who will handle the finances if they’re too sick or unable? Who will make healthcare decisions for them if they’re incapacitated? Attorney Louis Pacella handles trusts and estates statewide in California. He offers his unique perspective.
Here are the three estate-planning documents everyone needs:
Important Estate Planning Documents
1 – Will.
Some people believe having a will is unnecessary. But to avoid the court system administering your estate and ensuring your wishes are fulfilled should be priority one.
“It’s paramount to have a will in place to preserve your intent with regard to your assets,” says Mr. Pacella. “If someone dies intestate (without a will), his or her assets go to whomever the legal code dictates, including an estranged child or someone to whom the decedent does not wish.”
Primarily, the will names the executor, the person responsible for managing an estate. This includes anything from paying bills to selling assets, etc. While the contents of your will can remain private, it’s recommended to inform the individual charged with being the executor as well as any other family members who should be privy to this information.
“Create an inventory of personal effects as well,” continues Mr. Pacella. “A list of your belongings that predetermines who receives what also goes a long way to avoiding disputes amongst family members after your passing.”
It’s recommended that you visit an attorney like Mr. Pacella for creating your will as subtle language errors can possibly nullify the will and leave the decisions to the court.
2 – Durable Power of Attorney.
A power of attorney is designed to grant rights to the person of your choosing (your attorney-in-fact or agent) to make legal or financial decisions on your behalf in the event of a death or incapacity.
It is possible to give the agent broad, ongoing powers, including the ability to handle finances, or simply limit him or her to specific actions and/or dates like selling an asset during a time frame. The agent may not represent a principal in court or change/revoke a will.
“Too often we meet with clients who remark that the thought hadn’t crossed their mind about appointing a financial agent, someone to act on their behalf and manage their accountings. They’ve usually thought about who their heirs are, but not specifically about who they would put in charge of legal and financial decision-making. It’s not an easy decision because the person closest to you may not be the best with money.”
Not only do you need to choose an attorney-in-fact but you will likely need at least one back up. You never know when your chosen agent will be out of the country, similarly incapacitated or unavailable for any number of reasons.
3 – A Healthcare Directive
Similar to the Power of Attorney, the Health Care Directive grants certain rights to the person of your choosing to make healthcare and medical decisions on your behalf in the event of your incapacity.
Mr. Pacella explains, “Unfortunately, unforeseen catastrophic events are often a part of life. The best we can do is prepare for those difficult times by appointing someone we can trust to be calm and thoughtful in a time of crisis.”
But a Healthcare Directive is not only for emergency situations. You can establish end-of-life decisions by determining who will make decisions on your behalf and what kind of treatment you will receive. It also typically contains instructions regarding donation of organs, autopsies, do-not-resuscitate scenarios, dementia, or whether you want artificial respiration or feeding tubes to be installed to prolong your life.
In the end, whether you pass ‘Go’ and collect $200 or land on ‘Free Parking,’ it’s important to be safe and not sorry. From having an experienced and professional estate planning attorney like Louis Pacella draft and explain the important areas of these documents to making sure you’re keeping them all in one place and accessible to those who may need them, being prepared and protecting yourself, your family estate should be a top priority.