Our U.S. Congress has designated the third full week in October (October 19-25, 2020) as National Estate Planning Awareness Week. This campaign is designed to help the public understand what estate planning is and why it’s an essential part of our financial wellness. According to a 2020 study by Caring.com, only about 32% of the U.S. population has an estate plan in place. That’s down from 42% in 2017.
Why are people deciding to skip or put off their estate planning? The reasons vary. Some people are uncomfortable thinking about their own death or possible incapacity. Or, they mistakenly think that estate planning is only for wealthy people who have a large family and lots of personal property. Here are some other common misconceptions:
- Estate planning is too expensive
- Starting the estate planning process is too complicated
- Don’t have enough assets or don’t have “an estate”
- Don’t need an estate plan if you’re unmarried or don’t have children
As Estate Planning Awareness Week aims to teach us, estate planning is an important process that can protect you, your family and loved ones, and your assets. An estate plan can also memorialize your medical wishes and ensure that you have trusted people in place to help with financial or legal decisions. There are three estate planning documents, in particular, that we believe everyone should have in place.
A Last Will and Testament, also referred to as a Will, is the most common type of estate planning document. It provides for the orderly disposition of someone’s assets, debts, and other personal property after their death. This document also allows parents to designate a guardian for their minor children (children who are under the age of 18). Wills do not have legal authority until the person who created the will passes away, and an original version of their will is filed in the appropriate Probate Court.
Durable Power of Attorney
A Durable Power of Attorney is a legal document that enables someone to appoint a trusted person with their health, financial, and/or legal decisions. This estate planning tool gives legal authority to help make decisions when the appointee is unable to do so themselves. A Power of Attorney is effective during the appointee’s lifetime only. If someone becomes incapacitated and does not have a Power of Attorney in place, the court will select a guardian or conservator for them.
Advanced Medical Directive
An Advance Medical Directive, which is also referred to as an Advance Healthcare Directive or a Living Will, allows a person to stipulate their wishes regarding medical treatment and end-of-life care. It enables someone to state their personal preferences, in advance, regarding what types of life support measures they would prefer to have – or what treatment they would prefer withheld if they are in a terminal condition. An Advanced Medical Directive takes effect during a person’s life; it only comes into play if he or she is incapacitated or otherwise unable to communicate their wishes. This legal document is often executed along with a Durable Power of Attorney for Health Care.
Have Additional Questions? Contact Our Experienced Estate Planning Team
Estate planning may seem like a daunting task, but the process can be simplified by breaking it down into steps and making sure you have the bases covered. If you have any questions about estate planning, or if you would like to schedule a consultation, please call Brian M. Douglas & Associates at (770)