A friend of mine asked me the other day, “Why do I need an estate plan? Everything I own has a beneficiary designation on it.” I looked at him and said, “Your beneficiary designation handles the most unimportant aspect of an estate plan, the money.” The beneficiary designation sends your money where you want it to go when you die. It is the stuff that happens while you are alive that should matter most to you.
I told him that the reality is that an estate plan deals with both dying and living, and if you don’t have one, it can make living very difficult. The four documents associated with an estate plan are the will, the trust, the power of attorney, and the medical power of attorney. The will and the trust deal with sending your assets to others after you die, the power of attorney and the medical power of attorney are there for when you’re alive.
You need a medical power of attorney because if you lack capacity, someone else can make medical decisions on your behalf. They can get second opinions, hire medical staff to take care of you, and ensure you are as medically comfortable as possible. It allows someone to protect you when you can’t protect yourself.
The durable power of attorney is just as important; it is the document that allows someone you trust to help you manage your financial affairs. This can be because you are in the hospital or even if you cannot see to pay your bills because the print is too small. The durable power of attorney is the document that helps make your life easier as you find financial issues harder and harder to deal with. It also can allow for Medicaid planning so that all your money does not go to the government if you need to go into a nursing home (30% of us will end up in one.)
Those same powers of attorney allow you to make medical and financial decisions for your 18-year-old children who think they are adults but are really just kids. If you have them for your kids, you are so much better off, especially if they are away at college. Once they are 18, you can’t legally decide anything for your child without the powers of attorney. Imagine not being able to talk to the doctor when your child is hospitalized because you don’t have the legal authority to do so.
Bottom line… your money is really the least important aspect of an estate plan… the documents for the living are truly the most important. Not having them when you need them is the costliest decision you can ever make.
Protect yourself and your family; call today for a free consultation and live worry-free. I can be reached at 888.235.4357 for a free consultation on estate planning.
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