Your estate plan should include six critical components. While most people think an estate plan only affects financial matters, three of the six essential documents involve medical issues rather than financial concerns. A thorough estate plan protects multiple aspects of your life.
If you are missing one of these documents, your loved ones may have to deal with added legal expenses and delays, or they may lack the authority to help you in an emergency. Having these six elements up-to-date allows you to feel confident knowing that you’ve taken the right steps to prepare for the future.
1) Trusts Can Be the Key to a Worry-Free Plan
For many families, trusts serve as the cornerstone of a protective estate plan. Different types of trusts will accomplish different goals.
For instance, you might use:
- A spendthrift trust to protect a loved one who is still in the process of developing money management skills
- A supplemental needs trust to provide for the care of a dependent with special needs
- A revocable “living trust” to pass assets to loved ones without the delays and expense of probate
- An irrevocable asset protection trust to establish eligibility for long-term care assistance through NC Medicaid without depleting assets
- A charitable trust to reduce tax liability while receiving income and supporting a favorite cause
- A pet trust to provide for the care of a beloved pet
The trust holds property for the benefit of trust beneficiaries. Depending on the situation, you might be the initial beneficiary, and your loved ones could be successor beneficiaries who receive assets after you pass. An experienced estate planning attorney can explain how a trust could accomplish your goals.
2) Wills are Essential
Whether or not you have a trust, you need to have a valid, updated will in your estate plan. A will directs the disposition of property that is not included in a trust. Additionally, a will can fulfill purposes that can’t be handled by a trust, such as naming a guardian for minors. In many cases, a simple “pour-over” will works well in combination with other components of your plan.
3) Financial Power of Attorney
A power of attorney authorizes an agent to act on your behalf if you become incapacitated. Because illness or accident could strike at any time, it is wise to be prepared by having your attorney prepare a durable power of attorney for finances so that a loved one can manage funds and pay bills if you are unable to handle matters personally. You can set up the power to spring into action only if you happen to become incapacitated in the future, or you can set up a power of attorney to allow your agent to help manage financial matters now.
4) Medical Power of Attorney
Like a financial power of attorney, a medical power of attorney enables another person to make decisions for you when you are unable to make or communicate decisions on your own. A medical power of attorney covers health care issues such as authorizing treatment.
5) Living Will/Advance Directive
In addition to authorizing an agent to make health care decisions on your behalf, you can also provide instructions about the type of care you wish to receive in certain situations through an advance directive, often referred to as a “living will.” Writing down your preferences in advance in a legally enforceable document substantially reduces the burden on loved ones and ensures your wishes will be honored.
6) Authorization to Access Medical Information
The Health Insurance Portability and Accountability Act (HIPAA) restricts the ability of medical professionals to share patient information. If you prepare legal authorization documents in advance, your family will be able to discuss medical treatment with doctors and help handle billing and insurance matters.
A North Carolina Estate Planning Attorney Can Ensure You Have the Documents You Need
Life moves forward continually, and your estate plan must keep up or it will not serve your needs. Schedule a consultation with the dedicated team at Salines-Mondello Law Firm, PC, so we can review your existing documents and prepare a plan to protect your future.