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| Cathy A. Robinson, CPA Senior Manager robinson@hwco.com |
In this two part series, we have compiled a
list of essential documents, as well as the highly recommended documents, for
Estate Planning. Though you may think
you can wait to plan, our advisors recommend starting sooner rather than
later.
Estate planning can be complicated. It is important you know all the essential
tips, tricks, and documents to can help make planning easier on you and your
relatives. What are the essential documents that you will need for planning
your estate?
1.) A Will
Having a will
is the first and most important step. In
your will you must clearly and carefully describe the beneficiaries and the
property and or assets they will receive. This means identifying their exact
name and relationship to you, as well as the property and or asset. Keep in
mind a stranger should be able to go into your home and find the item based
upon the provided description.
This is
especially true for heirlooms. They should be specifically left in the will and
described carefully. Relying on markings, an informal list, or the idea your
children know what you want is a bad rule of practice. Most disputes which
occur between family members are over heirlooms. Another good idea is to give
the item to the person while you are still alive.
DO NOT give
reasons for your actions in your will. Reasons can be used to show a lack of
capacity and have the potential for testamentary libel.
The most
important part of creating a will is naming a trustworthy executor. This person
will carry out your will when you die, pay your debts and distribute property
to your beneficiaries. They should also be appointed by a court first. The
executor should be honest, have sound judgment, be financially responsible, and
be close in proximity.
2.) Durable Power of Attorney
You must name a
power of attorney to manage your property in the event you are unable to do so
yourself. This means this person will have the responsibility of doing things
such as paying your bills, maintaining your house, managing your investments, etc. When selecting this person, they should have
experience and skill, good trustworthy character, and are close by.
3.) Medical Power of
Attorney
This person will be the one is
responsible for making all of the medical decisions for you in the event you are
unable to do so yourself. It is
important to explain in this document the types of decisions they will face
such as: “pulling the plug,” what treatments you do and do not desire, forced
food and water administration. When
selecting this person, remember they may be making life and death decisions, so
you will want to choose wisely. Spend time with this person going over your
wishes and consider naming alternates.
4.) Directive to
Physicians (“Living Will”)
This statement will alert the doctor
as to whether or not you desire to be kept alive artificially when you are in
an irreversible or terminal condition and cannot express your own desires. This statement differs from the medical power
of attorney because it directly expresses your wishes. In your document,
include your detail desires for things like artificial nutrition and hydration,
as well as antibiotics.
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