Four Basic Estate Planning Documents Everyone Should Have in Place
(1) Current Will
Your will is a written document, signed by you and by two or more witnesses. In some states, your signature must be witnessed by a notary public. If the will is believed to be authentic by the probate court, it is used to determine the distribution of your property. If the will is not valid or you do not have a will, the court will follow state law for those without a will. Many of the court decisions might be completely contrary to your desires.
For example, without a valid will, a judge might choose guardians for your minor children, select trustees to manage your property and even award property to your distant relatives. The actions of this judge may be completely contrary to your desires. With a valid will, you are able to choose who will inherit your property and who will administer your estate as executor or personal representative. If you have minor children, you can choose a person to raise your children. With a trust, you are permitted to decide who will manage the trust for family members.
A valid will is an essential part of transferring your property at the right time to the right people at the lowest cost. Without a valid will, costs, delays and the probability of expensive conflict increase. You can provide a wonderful legacy for your family with an updated will and a sound estate plan.
(2) Durable Power of Attorney for Finances
The durable power of attorney for finances allows you, during your lifetime and while you are competent, the opportunity to name someone to make financial decisions for you if you can no longer do so for yourself. A durable power of attorney for finances protects your property and yourself. If you are no longer able to manage your property, the person that you select in this durable power has the right to act as your agent. Even if you are disabled or incapacitated, this person will have the legal right to manage your property. If you do not have a durable power of attorney for finances, it will be necessary for the court to appoint a conservator.
The court may select any person as conservator and there often will be expensive reports, audits and costs in the management of your property. If you sign a durable power of attorney for finances, the person that you select may manage your property without all the expense of a court-appointed conservator.
Even spouses should have durable power of attorney for finances because some assets cannot be jointly owned such as IRA’s, 401(k)’s, and even insurance policies are generally owned by one individual. You cannot access your spouse’s retirement account or any cash value in a life insurance policy without a durable power of attorney for finances if they become incapacitated.
(3) Durable Power of Attorney for Healthcare
There are two general types of healthcare directives—a durable power of attorney for healthcare and a living will. In some states, they are combined into one document called an advanced directive.
The durable power of attorney for healthcare allows you to select a person who can assist your doctors in making healthcare decisions while you may be incapacitated. You may have a serious medical condition and the doctor will need the advice of another person regarding the best possible care for you. Your designated holder of the durable power of attorney for healthcare can help the doctors ensure that you have high-quality care.
(4) Living Will
The living will gives your instructions regarding end of life issues and covers the time before your probable death. In the last days and weeks of life, there are a number of decisions regarding care, nutrition, hydration and resuscitation that need to be made. The living will gives you the opportunity to offer recommendations to medical staff about the types of care to be provided to you at that time.
Louisiana Baptist Foundation is available to help you with estate planning. If you desire to include the Louisiana Baptist Children’s Home in your estate plans, the Louisiana Baptist Foundation offers estate planning assistance. As a ministry partner of the Children’s Home and an agency of the Louisiana Baptist Convention, the Foundation does not charge a fee for this service (legal and/or CPA fees may be incurred in some circumstances). You may contact the Foundation at 318.445.4495 or Toll-Free 877.523.4636 or www.LBFinfo.org.