Studies show that less than half of adults living in the United States have an estate plan in place. The main reasons for this neglect are that people believe they are not needed because they are unmarried and without children or they feel they do not have enough assets to make it necessary. In fact, estate planning covers more than just the dispensation of someone’s belongings after they pass away; it also determines how people’s finances and medical issues are handled if an individual is incapacitated.
Along with a will, which establishes an executor and determines where someone’s assets will go and to whom, individuals should also have a financial power of attorney and a medical power of attorney. A financial power of attorney allows another named person to handle someone’s property in their stead if they are not available. This can be due to illness or simply being out of the country. A medical power of attorney allows someone to select an individual to make medical choices for them if they cannot make them on their own.
People may also want to avail themselves of other common estate planning documents, such as a living will or trusts, depending on their circumstances. Each situation is different, and proper estate planning can ensure that someone’s wishes are carried out when they cannot make choices for themselves or after they pass on.
If estate documents are not set up properly or at all, it can cause major problems for an individual’s heirs, including expensive and time consuming legal battles. In addition to drafting these documents, an estate planning attorney may be able to ensure that someone’s estate plan complies with current state and federal regulations.
Source: The Atlanta Journal-Constitution, “3 estate planning documents every adult needs“, Nedra Rhone, July 15, 2014