Secure Your Future: Essential Documents for Every Age - Will, POA, and Living Will Explained
Don't Leave Your Assets to Chance: Learn How to Manage Easily Your Estate with Must-Have Legal Instruments for Emergencies
Do you have all your affairs in order? Even if you are in your 20s, having some documents ready for you in case of an emergency is important. After all, you do not want to leave it up to the State what happens to your assets, no matter how large or small.
REQUIRED DISCLAIMER: I am not an attorney or financial advisor; these suggestions are just what I have learned over the years at the College of Hard Knocks. If the following seems logical to you, I recommend seeking a qualified estate attorney. If you are on a budget, you can go online to Trust & Will, LegalZoom, NOLO, etc.
Here are the key documents that everyone should have signed and ready in case of an emergency:
Will:
A will dictates how you want your assets to be distributed after your death. It names an executor to manage your estate, outlines who gets what, and can appoint guardians for minor children if applicable. You would not believe how many Americans die without a will in place — even the wealthy are not immune from not having a will when they pass, and it’s a mess.
State laws determine how your assets are distributed without a will, which might not align with your wishes. It also helps avoid potential conflicts among heirs and speeds up the probate process.
Durable Power of Attorney (POA):
This document allows you to appoint someone to handle your financial affairs if you become incapacitated. "Durable" means it remains effective even if you lose the capacity to make decisions. Therefore, it requires someone you explicitly trust to handle your affairs while you are down for the count.
The POA would go into effect if you have been disabled due to an accident or illness or perhaps having a mental health crisis.
It ensures that someone you trust can pay bills, manage investments, or handle other financial matters without court intervention. This can prevent financial mismanagement when you cannot oversee your finances yourself.
Living Will (Advance Healthcare Directive):
A living will (AHD) outlines your wishes regarding medical treatment if you're unable to communicate them yourself. It includes instructions on life-sustaining treatments, pain management, and end-of-life care preferences.
When you draft a living will, you will appoint someone to make healthcare decisions for you if you can’t, say after an accident, where you are able to decide what medical procedures you do or do not want to sustain or terminate your life.
A living will helps eliminate family disputes as to what you actually want in a life-death scenario at the hospital, so even when you become incapacitated, you are able to have your wishes honored.
Those are my top three MUSTS. Now, let’s explore a few other documents/instruments to make your life a bit easier in the long run.
Trusts can be part of an estate plan to manage and distribute your assets, keeping them out of the public eye should you pass away and potentially avoiding probate while also offering tax benefits.
HIPAA Authorization: Allows your designated healthcare agent (spouse, mother, trusted other) to access your medical records, which can become critical for making informed healthcare decisions on your behalf.
Beneficiary Designations: Ensure these are up-to-date on insurance policies, retirement accounts, and other financial products, as they often supersede instructions in a will. If married, you may want to have property titled Tenancy by the entirety (TBE).
Letter of Intent:Â While not always legally binding, this document can guide executors or family members. It details personal requests, funeral arrangements, or specific asset distributions that are not covered by your will.
Digital Assets:Â As digital property rises, consider how you want your online accounts, digital currencies, or other digital assets managed. This can be a bit tricky if you have your Bitcoin in cold storage, so I would consult with a reputable estate attorney strongly familiar with digital assets.
