You may have asked yourself the question, “Why do I need a will?” If so, you’re not alone. According to a Harris Interactive survey done in 2007, about 55% of all adult Americans do not have a will. This article will discuss a few of the most basic estate planning documents that everyone should have.
A will is probably the most important document that you’ll ever sign. Among other things, it determines who gets your possessions when you die, things like your cars, house and personal property. If you don’t have one, the probate court will decide who gets your things, and also who will take care of your children. There may be someone in your family who you would prefer to take care of your children, and there may be someone else who you really DON’T want to have your kids. These are decisions not to be left to a judge. A will does NOT determine who gets your IRA’s, annuities, or life insurance death benefits. Those types of accounts have beneficiaries named on them, and are NOT directed by a will. In fact, you need to make sure your beneficiary designations are correct. Even if your will is more current than your beneficiary designations, the beneficiaries named on IRAs and life insurance is who will get that money.
A living will is a document in which you state your wishes regarding medical treatment, especially treatment that sustains or prolongs life by extraordinary means (life support). This document is used when the signer becomes mentally incompetent or unable to communicate (such as a coma). If you don’t have this document, the doctors are going to keep you alive as long as possible. It will then turn into a court battle if your family feels that it is better to take you off of life support. If you are married, your spouse may feel differently than your parents do about it, so then you have a family feud/court battle going (remember the Terri Shaivo case?). Having this document written up in advance will save everyone a lot of guessing and heartache.
Power of Attorney (POA)
This is a document that is also very important to have. It gives someone else permission to make financial and legal transactions in your behalf. So obviously, your POA needs to be someone that you trust very much. It can either be a Durable POA, which means that person can sign things for you at any time, or a Springing POA, which means that it only comes into effect if you become incapacitated.
These are a few of the most important legal documents that are important for everyone to have. For these simple documents you can use a website like www.legalzoom.com or even an off-the-shelf software like Quicken Willmaker Plus 2010 for under $50. However you get them done, the most important thing is just GETTING THEM DONE!