Why should I prepare an estate plan?
Regardless of your age, health, and family status, it is important to create an estate plan in order to manage your assets and plan for unexpected events. It is better for you to make decisions on how to distribute your property and who to assign important decision making tasks, than have the state decide for you. The best part is that at any moment, you are able to change your mind, and either through an amendment or a codicil, you can easily make changes to your documents.
What are some of the documents that make up an estate plan?
There are several documents that constitute an estate plan. The better known one is the Will. With a will, you are able to explain how you want your property distributed upon your death. You can choose who will execute your will, and if you have minor children, who you want to designate as their guardian. It is important to have a will, because otherwise, these decisions will be made based on the current law.
The next document is the Trust. With a trust, you can transfer the ownership of your assets to a trustee for either your benefit or someone else’s. With a trust, you may be able to avoid probate, provide for a disabled minor, and ensure that you are taken care of financially at an older age. Because there are many types of trusts, it is important to speak with a lawyer in order to find one that suits best your personal and financial needs.
A Power of Attorney designates someone to act as your agent in managing your personal and business interests during your lifetime. The agent, Attorney-in-Fact, will take this role the moment you become incapacitated. This document is effective only during your lifetime.
Health care documents include the Health Care Proxy, which allows you to choose an agent to make health care decisions if you become incapacitated. The HIPAA Release designates the disclosure of your protected medical information to someone of your choosing. Finally, the Advanced Directive, while non-binding according to Massachusetts law, this last document allows you to express your wishes regarding artificially prolonged health care.