How an Estate Plan Protects Your Loved Ones
Estate plans perform a number of functions, including conveying your wishes for final care, if you should become incapacitated and appointing people to make medical decisions on your behalf.
Everyone needs an estate plan, for their own peace of mind and for their loved ones. The Huffington Post's recent article confirms that “You Don't Have to Own an Estate to Do Estate Planning!” As the article notes, estate planning concerns creating directions so your family understands what to do and when, if you're not around to tell them. More than money, an estate plan is about making sure your family is protected, reducing stress and family conflict, making sure your wishes are executed and providing peace of mind for all.
The parts are very straightforward, but every plan is different. You need a healthcare proxy or power of attorney for health care, which designates an individual to coordinate your medical wishes. In some states, a living will is also a tool that helps explain what you want in a variety of medical situations. Massachusetts relies on the individual you have named as healthcare proxy to make those decisions, so be sure you've named someone who will do what YOU want. Failing to have a health proxy could mean your care is left to the interpretation of healthcare professionals and family members.
You should also draft a financial power of attorney, which allows someone to take care of your legal or financial affairs if you are unable to do so. Consider having a plan for the care of any pets if you live alone and don't have someone who will know what needs to happen if you can't be at home to care for them.
Work with an experienced estate planning attorney to help you create a plan that protects you, while maximizing your investment potential and minimizing your tax liability.
Here's another way to be sure your intentions are known by your family—an ethical will. An ethical will is different than your living will. In fact, it's not really a will, but a statement that expresses your love, your hopes, your dreams and your wishes. It may be a letter or letters to individual people you love. You can also create a video or a scrapbook. Think of your ethical will as a personal statement that contains important information about what you want to happen when you are gone. This may include advice for the guardians raising your children, wisdom that you want to share with nieces and nephews, or a statement of memories for loved ones.
Estate planning is about protecting your loved ones and creating a legacy. It has less to do with the value of your estate than you think!