What is an “estate plan” and what happens if you do not have one?
An “estate plan” is a set of documents which gives your family the gift of your choice as to what should happen to your money, things and body in the event you are injured, ill and/or pass away. The documents may vary in type, length and content, depending on what you want your plan to do for you when you need it. No two plans should look alike because no two families are alike!
What documents are in a plan?
- Last Will & Testament: It outlines who will be given your money, your things, your home and/or other real property. This is an important part of an estate plan because it may be THE controlling document when you pass away. It only really works when you pass away, actually!
- Financial Power of Attorney: This document appoints a person to help you make financial decisions if you either cannot or do not wish to make them on your own. This works in your estate plan to help YOU if you become incapacitated and cannot make your own decisions. It STOPS working when you pass away.
- Healthcare Power of Attorney + Living Will: The Power of Attorney document appoints a person to help you make healthcare decisions if you either cannot or do not wish to make them on your own. A Living Will is your end of life choices as to whether you wish to have life prolonging medical procedures withdrawn or withheld. In Georgia, this is referred to as an Advance Directive for Health Care. Like the financial power of attorney, this document in your estate plan works WHEN YOU ARE ALIVE and stops working when you pass away.
- HIPAA Release: This allows you to name individuals who have access to health care information, even if they are not a decision maker under an Advance Directive.
- Nomination of Guardianship: Most estate plans do not have this as a separate document. However, a good plan for a family with any child under the age of 18 years of age should have a separate document wherein a parent can nominate a guardian in an emergency, temporary and permanent situation. This document in your estate plan helps potentially when you are alive or after you pass away. Your nomination should include who is there for an emergency AND permanent.
- Revocable Living Trust: This may or may not be part of your estate plan. Whether it is or is not appropriate depends upon your unique reasons for wanting an estate plan, your family and who you wish to protect and, just as important, what you currently own as an asset and what needs to happen to that when you pass away.
If you only have one or two of these documents, you likely do not have an estate plan. Rather you have few documents that will work only partly the way you need them to work in the event of illness or death! But you will not know this until it is too late to make changes or additions!