Estate Planning: Some Basics
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According to the old saying, death is one of only two certainties in life. It seems logical, then, to prepare for the inevitable by preparing certain basic documents which can apply to us all, whether we have billions of dollars or only a few.
The first requirement is to do some advance thinking. Who should act on your behalf if you become ill or disabled? Who should discuss your medical treatment if you are not able to communicate with your doctor? Who should receive your property upon your death? The answers to these questions can be inserted into one of three basic documents: a durable power of attorney, an advance medical directive, and a last will and testament.
In a durable power of attorney, you authorize a specific person to act on your behalf while you are still alive. Usually, the acts regard financial matters (ie. deposit or withdraw money, endorse checks). The "durable" part means that you intend the person you select to have authority even if you become incompetent due to illness or injury.
An advance medical directive is Virginia speak for a living will. In an advance medical directive, you authorize someone to talk to your doctor about medical options in the event you are not able to do so. The authority granted under both a power of attorney and a medical directive last only while you are alive.
The final document is a last will and testament, in which you decide who should inherit your property upon your death. You can designate your executor (the person who carries out your wishes, under court supervision), you can have property held in trust, and you can nominate a guardian for your minor children.
It is not mandatory to have all of these documents. Without a medical directive, for example, a hospital may keep you alive on machines solely because it receives federal funds. And if you do not have a last will and testament, the state will dictate who will receive your property. The best idea: do some advance thinking and talk to a lawyer about signing properly prepared documents.
