Tennessee Estate Law Blog
Consider this Estate Planning 101, an introduction to some of the most important steps to take in planning for the future. Most people are aware that they need a Last Will and Testament. But that is not the only essential document in an estate plan.
Below is a list of the 4 essential documents every estate plan needs. As you will see, estate planning is concerned with more than just what happens after you pass away. In fact, the first three documents are designed to assist you and your loved ones during your lifetime:
- General Durable Power of Attorney – Who should handle your affairs if you are unable to do so? A General Durable Power of Attorney authorizes a person of your choosing to act on your behalf (as “attorney-in-fact”) in matters other than health care decisions while you are still living. This includes everything from paying your bills to filing your tax return. Because it offers a broad authorization to handle financial matters on your behalf, a Power of Attorney should name someone that is responsible, and that you trust completely.
- Health Care Power of Attorney – Who should make medical decisions for you if you are incapacitated? A Health Care Power of Attorney authorizes a person of your choosing to act on your behalf (as “health care agent”) in making health care decisions, but only if you are unable to make those decisions for yourself. A Health Care Agent is required to follow your wishes as laid out in your Living Will (see below). It is an important and weighty responsibility, and you should appoint a Health Care Agent with care. Is the person you choose comfortable with that role? Are they capable of making an objective decision in an emotional time?
- Living Will –What medical treatment do you want (and not want) if you are incapacitated and in a terminal condition? A Living Will (not to be confused with a Living Trust) allows you to make certain health care decisions now so that if you face a terminal condition and are unable to make those decisions for yourself, your family and doctors will know your wishes about the life-sustaining measures you want and do not want in that condition.
- Last Will and Testament –Your Will controls what happens to the property you own at the time of your death. A well-crafted will not only distributes your assets but also contemplates contingencies. Who should receive your estate, for example, if your spouse or your children pass away before you? A Will can establish a trust and name guardians for your minor children. In your Will, you also appoint an executor, someone to be responsible for paying your debts and distributing your property in accordance with your Will, under the supervision of the court.
Estate planning is about more than just documents. It is also about organizing your assets, naming beneficiaries in IRAs and life insurance policies, and anticipating complications that may result in outcomes for your property that do not align with your wishes.
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