Most people think that they have a basic understanding of what will happen to their belongings after death, but few people truly understand how important planning for end-of-life matters can be. Estate planning takes what a person might think they know, and transforms it into something that is actually applicable in real life. By utilizing a few key documents, California residents can create clear instructions for their loved ones, pass on assets and give others the ability to make important decisions on their behalf.
A will is perhaps the most well-known estate planning document. In it, a person may outline which assets should be distributed to which heirs, and specify an executor to do so. Executors are also responsible for paying off any last expenses or taxes with money from the estate. Living wills -- although similar sounding -- are for use before death. This document provides guidance regarding life-saving interventions and other end-of-life medical care.
Powers of attorney are also important features of virtually any estate plan. For instance, while a living will might outline someone's end-of-life care preferences, it does not give anyone else the authority to make medical decisions on their behalf. A health care power of attorney is essential to ensuring that a person's medical wishes are truly respected. Durable powers of attorney that allow another person to handle finances are also a smart idea, as individuals who are medically incapacitated cannot handle their own finances and assets.
Estate planning encompasses much more than most people in California realize. Virtually everyone can benefit from creating a will, living will and applicable powers of attorney. A comprehensive estate plan can protect a person's interests both before and after death, and failing to take proper estate planning precautions can lead to confusion and more.
Source: wbtw.com, "Wallet Wednesday: Basics of Estate Planning", Brandon Herring, Nov. 29, 2017