This blog was originally published in 2020. It was updated in June 2022.
It’s common for older adults to put off estate planning, considering the difficult decisions that may need to be made. However, delaying estate planning or not doing it at all only could increase the chances of potential confusion, family disagreements, and even court battles in the future.
That’s why there’s no better time to start estate planning than the present. When planning, it's helpful to consider a few key documents.
Include These Important Estate Planning Documents
- Living Will
- Health Care Power of Attorney
- General Durable Power of Attorney (Finances)
- Last Will & Testament
- Living Trust
1. Living Will
A living will is a legal document that lays out your preferences for lifesaving medical treatments and other medical decisions like pain management, comfort care, or organ donation. It guides your physician and family in making difficult decisions when you are unable to make those decisions for yourself.
It's often helpful to think about your values and your quality of life when answering questions in a living will. How important is it to you to be independent and self-sufficient? Would you want treatment to extend your life no matter the circumstances?
2. Health Care Power of Attorney
A health care power of attorney (HCPA) is a legal document that assigns a specific person(s) to act on your behalf in making health care decisions when you are unable to do so on your own. These decisions could include hiring medical personnel, determining the best place to receive care, and consent for or refusal of medical treatment.
A HCPA only goes into effect when the principal (or owner of the HCPA) is debilitated or becomes too ill to communicate his or her wishes about medical treatment. It’s important to note that a HCPA does not have any authority over finances; instead, that requires a general durable power of attorney.
3. General Durable Power of Attorney
A general durable power of attorney (DPOA) is a legal document that assigns a specific person(s) to make legal and financial decisions on your behalf. As the principal, you would name an agent to have full access to financial, legal, and property matters that are detailed in the agreement.
For those who want to ensure more control, choosing a springing power of attorney might be a better plan. A springing power of attorney doesn't go into effect until the occurrence of a specific event, such as having a physician state the principal needs assistance with decision-making or is incompetent.
Whichever direction you decide to take, it's essential to have a plan in place. Obtaining a power of attorney can help prevent a loved one from having to go to court in an emergency situation to seek guardianship or conservatorship to manage your finances.
4. Last Will and Testament
A last will and testament is a legal document that goes into effect after death and designates where all of your assets will go. The executor named in the will is the person who manages assets through court proceedings and distribution. A big misconception is that a last will and testament prevents an estate from having to go through probate court, which is not necessarily the case. However, having a last will and testament along with a living trust can help individuals avoid probate.
5. Living Trust
A living trust is a legal document that allows someone to direct their assets after they have passed away, to ensure the assets are distributed to their preferred organizations and loved ones. It also allows certain rules to be implemented, such as when the assets can be accessed. Living trusts can be created with a spouse as a joint living trust to help protect each other and any children or other beneficiaries.
Explore Life at a Continuing Care Retirement Community
As you begin to plan for the future, deciding where you want to live and how you'd like to receive necessary medical care is equally important. Continuing care retirement communities provide many benefits for older adults, including access to different levels of care, maintenance-free living, socialization, amenities, and activities. To learn more about communities like this, click on the button below.