We know estate planning is hard to talk about. Nobody likes to think about what will happen as they age and eventually pass on. But these conversations are necessary.
You need to start estate planning with your attorney to ensure your personal assets are taken care of. Plus, estate planning documents can guarantee your care and well being if you are ever incapacitated for any reason.
Attorneys use four primary documents when a client seeks estate planning services:
- Last Will and Testament
- Financial Power of Attorney
- Healthcare Power of Attorney
- Living Will
We’ll walk you through the main features of each of these documents to help you start thinking about your estate.
Last Will and Testament
A last will and testament is a document that sets out how you want your property to be distributed after you pass away.
If your children are still minors, your will sets out provisions for their care. This includes naming a guardian and providing financial support for your children. Your will also appoints someone to be the executor. This person is responsible for carrying out the provisions within the will.
If you pass on without a will, you are considered to have died ‘intestate’. This is a formal way of saying your estate will be distributed according to the guidelines in the North Carolina statutes. If you want to guarantee your property is distributed as you wish, it’s time to start your will.
Financial Power of Attorney
A financial power of attorney allows you to select a person to act on your behalf if you are unable to make financial decisions while incapacitated from illness or injury.
You select a trusted family member or friend to be your agent or “attorney-in-fact”. This person makes important financial decisions on your behalf. They’ll have access to your bank accounts, the authority to buy and sell your property, and any other financial decisions.
It’s crucial to appoint someone you completely trust to be your agent. The agent is legally bound to act in your best interest. They must properly document all financial actions taken on your behalf.
Healthcare Power of Attorney
A healthcare power of attorney is similar to a financial power of attorney. You appoint an agent to handle medical decisions in the event of incapacitation.
Again, it is important to choose a family member or friend who you can trust to act in accordance with your wishes. Make sure your agent is clear on what medical decisions you would make.
A healthcare agent makes decisions such as what type of treatment to administer when you are unable to communicate with your doctor. While this power of attorney is not exclusively used in end-of-life situations, these decisions are included in their authority.
A living will, unlike a healthcare Power of Attorney, is only used when the individual is terminally ill or in a similar permanent end-of-life condition. Living wills are commonly used in conjunction with healthcare power of attorney.
A living will details your wishes pertaining to end-of-life medical care. A living will can give general or specific directions to the agent concerning pain and suffering treatment. This will also give directions on invasive procedures and whether or not to continue life support.