The Legal Documents Everyone Needs and Should Have
A valid Last Will and Testament is arguably the most important legal document you should have. This document protects you and your family and allows you to control who receives your property. Equally as important, it also allows you to appoint a guardian for minor children, if something were to happen to both parents.
Additional documents of equal importance include a financial power of attorney, medical power of attorney and living will / advance healthcare directive. These four documents round out the bare essential and necessary life and estate plan documents everyone should have. Below is a list of reasons why.
Here are our top 6 reasons to create a legally binding Last Will & Testament and related documents:
1. Control who will take care of your minor children.
If you have minor children (under the age of 18), you can designate legal guardians in your Last Will & Testament. It allows you to identify responsible individual(s) who are in the best position to care for your children after your death. The court will take this guidance into consideration in issuing formal orders of guardianship.
2. Control who gets your property/assets.
A Last Will and Testament is a legally binding document that allows you to control how you want your property/assets to be divided and to whom. This includes all property except the property that passes based by contract with a beneficiary designation (for example, life insurance, retirement accounts, investment accounts). If you die without a will, the state will determine who gets what based on a pre-determined formula. This is call dying intestate (without a will).
3. Control who manages your estate after you die.
You are able to name a personal representative (sometimes called an executor or executrix) in your Last Will and Testament. This person will be responsible for handing the affairs of the estate and making sure your desires are carried. Failing to name a personal representative will result in either a family or friend stepping up, often times resulting in arguments, or the court appointing a representative to manage the affairs of the estate (for a fee).
4. Preserve wealth and allow family members to build upon your hard work.
Gifting your property/assets (inheritance) to your loved ones, with instructions, is a great way to ensure your assets remain in the family and the family can build upon your hard work. Estate sales are common practice resulting in assets being sold for pennies on the dollar. When people die without a will, it is common that the family never receives the assets. These assets then are turned over to the state (escheatment) where the state earns interest until claimed by the rightful owner. There are billions of dollars of cash and assets being held by state governments because the rightful owner either could not be found and never knew they had an inheritance.
5. Minimized confusion and family disputes.
Dealing with the loss of a loved one is extremely stressful. It sometimes brings out the worst in people. It is not uncommon to have family disputes and arguments over “who should get what.” Having a valid Last Will and Testament with your listed beneficiaries and instructions allows you to prevent these disputes.
6. Put people in place to ensure your wishes are met while you’re alive.
In addition to the Last Will and Testament, it’s important to have a General Power of Attorney, Health Care Power of Attorney, and a Living Will / Advanced Medical Directive.
a. Financial Power of Attorney – allows life to keep moving if you’re sick or injured and don’t have the ability to handle your financial affairs. Giving this power to a responsible person allows your bills to be paid on time and any other financial or business transactions to occur and not result in late payments and impact to credit scores.
b. Healthcare Power of Attorney – allows you to appoint an agent to make medical decisions on your behalf, in the event you’re unable to do so. Your healthcare agent will make sure your medical desires are handled as you instruct in your Living Will / Advanced Medical Directive and any other conversations.
c. Living Will / Advanced Medical Directive – allows you to determine, in advance, the type of medical treatment you desire in life threatening circumstances. This takes the pressure off of your family and Healthcare Power of Attorney as you’ve thought about and communicated your desires.
We really hope this helps you understand the benefits and importance of these life and estate plan documents. Don’t delay. Get started. These documents are truly what everyone needs.
Warmest Regards,
Simplified Wills