If you have a will, congratulations. You are already ahead of most of your peers. Recent estimates find more than two-thirds of adults do not have a will in place. Although having a will in place is already a big win, it is important to also include three specific documents to have an estate plan that truly offers protection. The following will outline these three documents and why they are essential.
#1: Documents for health care
There is a 70% chance that you will suffer some form of incapacitation before passing. This could be the result of anything from a brief coma after a skydiving or car accident to a serious illness. Whatever the cause, those who want to have some level of control over health care decisions made on their behalf need to have documents in place outlining these instructions or giving a loved one the ability to make these decisions on your behalf.
In New York, a health care proxy is a legal tool that names a health care agent to make health care decisions for you.
#2: Documents for finances
The same is true for finances. Bills remain due even when incapacitated. Having a power of attorney in place allows you to appoint an individual to represent you for your financial affairs. This individual has access to your money but must use it within the guidelines outlined within your power of attorney documents.
#3: A trust
This legal tool allows you to transfer assets with a greater level of control. A will generally transfers assets outright while a trust serves as a container to hold those assets and distribute them according to the instructions you put in place. For many, this includes distributions to help provide for living expenses, health care needs and education of the beneficiaries.
These documents, along with a will, are only beneficial if they are drafted to meet your wishes. Improper language or use of fill-in-the blank forms can defeat the goals of these documents. A well structured plan can reduce the risk of delays with probate, protect assets and better ensure you pass along a legacy instead of a headache.
