Many people think estate planning involves simply creating trusts and wills, but these documents aren’t the only ones to consider. There are also Health Care Directives, trusts, and powers of attorney. Here’s a quick overview of each type of document.
HEALTH CARE DIRECTIVES
A Health Care Directive also known as a living will, is a legal document that allows you to state your wishes regarding medical treatment if you become incapacitated. For instance, this includes if you want to be put on life support, end of life planning, etc. It doesn’t replace a trust or Power of Attorney but rather supplements them.
For instance, if you suffered a traumatic brain injury and paralysis in a skydiving accident, an advanced directive can take into account whether or not you want to be put on a ventilator or other life support measures.
TRUSTS
A trust is a legally binding document between the Settlor, Trustee, and Beneficiary. In a trust, the beneficiary nominates a trustee to act on their behalf and serve over holding and distributing assets and property.
POWER OF ATTORNEY
A Power of Attorney gives another party the ability to act on your behalf when you’re unable to make decisions for yourself.
For example, if you were injured in a car accident and couldn’t speak for yourself, you could appoint your spouse as Power of Attorney, so they could pay bills and file insurance claims on your behalf. You might also wish to consider appointing two powers of attorney requiring agreement and joint actions on your behalf.
Note: The information in this blog is not legal advice. Consult a lawyer for advice for your situation.