The Three Essential Estate Documents Every Person Should Have
Estate Documents: Legal Will, Power of Attorney, Personal Directive
When it comes to planning for the future and protecting your assets, there are three essential estate documents that every person should have in place: a legal will, an enduring power of attorney, and a health care directive or living will. These essential estate documents each deal with a different set of circumstances and it is crucial to have all three in place for a complete estate plan.
A Legal Will: The Cornerstone of Estate Planning
A legal will is essential for deciding what happens to your property after you are gone. It only comes into effect upon your death and is a binding document that must be honored by the person you name as the executor of your estate. In your will, you can specify how you want your assets to be distributed, who should be the guardian of your minor children, and who should be in charge of managing your estate.
Without a legal will, the law in your province or territory will decide who inherits your property and how it's divided. This is why having a legal will is an essential estate document that every person should have. A legal will ensures that your assets are distributed according to your wishes and not according to the laws of the land.
It is important to note that a legal will is not only for the wealthy. Even if you have a small estate, it's important to have a legal will in place to ensure that your assets are distributed according to your wishes. Additionally, a legal will can also help to minimize the potential for disputes among your beneficiaries and can help to minimize the costs of probate.
An Enduring Power of Attorney: Protecting Your Financial Affairs
An enduring power of attorney is another essential estate document that allows you to choose the person you trust to manage your financial affairs when you cannot. This could be due to a physical or mental condition such as a coma or Alzheimer's disease. This essential estate document comes into effect as soon as it is signed but can be kept secure until needed so you retain the sole practical decision maker for so long as you are able.
An enduring power of attorney grants the person you choose the authority to make financial decisions on your behalf, such as managing your bank accounts, paying your bills, and managing your investments. This can be especially important if you become incapacitated and are unable to manage your own financial affairs.
Without an enduring power of attorney, the court will appoint someone to manage your financial affairs, which may not be the person you would have chosen. This can be costly, time-consuming and can cause unnecessary stress for your family and loved ones.
A Personal Directive: Planning for Your Medical Care
A health care directive or living will, also known as a Health Care Directive, Personal Directive, Advance Health Care Directive, Advance Personal Planning Directive, Advance Care Directive, Living Will Declaration, or Medical Treatment Decision among others, is an essential estate document that lets you and your family know the kind of medical treatment you want to receive if you become unable to communicate because of a physical or mental condition.
This essential estate document allows you to name someone you trust to make these decisions for you if necessary. This person is called an attorney or representative and should be someone you know and trust to take your wishes into consideration in the event you become incapacitated. They should be well aware of your preferences so that they can think objectively about your instructions and be able to communicate them clearly.
It's important to remember that your attorney or representative cannot make health care decisions for you if you are able to communicate for yourself. For example, they cannot insist that you receive medical treatment if you refuse. As long as you can communicate and remain mentally competent, no one can override your wishes.
A health care directive or living will is an essential estate document that allows you to make your own decisions about your medical care, even when you're unable to communicate them. It also ensures that your wishes are honored and that your family and loved ones are not left guessing about what you would have wanted.
As you can see, these three essential estate documents each only deal with one set of circumstances and you need all three in place in order to have a complete estate plan. If you do not have all of these essential estate documents in place, it is very wise to have them drawn up before any serious event occurs.
In the event you die without a Will or become incapacitated without an Enduring Power of Attorney, the courts will appoint someone to look after your affairs. If you have a spouse or children they will almost certainly be the ones appointed. However, if you do not have a spouse or partner and there are no close relatives available, then who would manage your estate?
Even if you do have close family members to represent you, the time and cost associated with needless court proceedings can be a severe inconvenience and drain the value of your estate. This is why it is vital that you have a legal will, an enduring power of attorney, and a health care directive or living will in place at all times. By having these essential estate documents drawn up with your lawyer, you can ensure that they reflect your wishes and protect those who are important to you.