TABLE OF CONTENTS: What is Life Insurance? Why Life Insurance Matters in Your 20s-40s Locking in Lower Rates Protecting Your Loved Ones Covering Final Expenses Tax-Free Payouts The Cost of Life Insura...
I’m sure when you woke up this morning, death was not something that crossed your mind. To think about “the end” is not how most people start their days, but unfortunately, the actions that should take place after the inevitable is something that really ought be carefully planned out. Stop for a moment and think to yourself who would bear the burden if you were to die today. Are there certain responsibilities that your loved ones would suddenly have to take over? In this blog post, we’ll discuss the critical documents that you need to have in order to help ensure that your final wishes are documented and protected before you reach the end of life.
Durable Power of Attorney
A Power of Attorney gives written authorization to an individual or entity that serves as that agent and who will act on behalf of the individual for personal, business, and legal matters. A Durable Power of Attorney ensures that the Power of Attorney stays in effect if you become incapacitated or unable to conduct business while still living. For example, if you’ve been in an accident, this document will enable the person who has Power of Attorney to act quickly on your behalf. This can help avoid complications over issues such as guardianship and conservatorship rights.
Appointment of Healthcare Representative
Like a durable power of attorney, the document appointing your healthcare representative allows a designated person to act on your behalf to make medical decisions if you are not able to do so. It enables your representative to access to health records, and provides the authority to make decisions about life-sustaining medical procedures. Proactively appointing a healthcare representative will give you the peace of mind that comes with knowing that your wishes and medical directives will be carried out as you intended, and your family will not have to bear the burden of determining who has the final say.
Advance Care Directive or Living Will
According to LifeHappens, “Advance care directives or a living will both put in writing the decisions you have made about your health care—instructions, if you will, for your doctor—so that your wishes are followed if you are unable to articulate them. It ensures, for example, that you receive the treatment you’ve decided on beforehand if you are terminally ill or permanently unconscious. It helps make sure that the treatments you receive in a terminal or permanently unconscious situation are in keeping with your wishes and provides guidance to your health-care representative.”
A Will or Revocable Living Trust
A will is a legal document that testifies to a person’s wishes as to how their property is to be distributed after their death, and which person should manage their estate. According to Investopedia, “A revocable living trust is a trust document created by an individual that can be changed over time. Revocable living trusts are used to avoid probate and to protect the privacy of the trust owner and beneficiaries of the trust as well as minimize estate taxes.”
Your will or legal trust legally determines who will inherit your assets, and in what manner. These end-of-life documents are critical for ensuring that your assets and effects are awarded according to your wishes, and can help eliminate, avoid, or postpone taxes that may be payable when you pass away.
While creating a will or living trust is not something that is usually top-of-mind for most people, it is not something that should be put off. There are many ways to go about drafting a will or living trust, including researching online resources. The guidance of an estate planner can help answer any questions that you may have, and may even bring up questions that you may not know to ask. Having a will or living trust in place can relieve some of the stresses that many heirs are burdened with after a loved one passes—plans, expenses, and asset allocations.
While talking about death is never fun, now is the best time to make sure you have provided for your family's future needs. If you spend a few hours attending to these details now, you and your loved ones can enjoy the peace of mind that comes from knowing you're prepared for the unexpected.
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