Build Your Estate Planning Vocabulary
For some people, thinking about their final days is not pleasant; it can even be downright uncomfortable. But it is imperative to be proactive about expressing your wishes when it comes to estate planning, end-of-life health care issues, and other important decisions that should be codified in a legal instrument. Making your intentions clear avoids conflict and saves family members from having to guess about what you may have wanted.
Although estate planning is an important process for anyone, regardless of age, many do not know where to start. Becoming familiar with the terminology of commonly-utilized documents can be a great first step towards taking care of your estate planning responsibilities.
A “will” is probably the estate planning instrument we are all most familiar with. This document sets forth how a person’s property will be distributed after his or her death.
A “living will,” also known as a “medical directive,” has to do with end-of-life health care decisions. A living will lays out whether you want certain medical treatment to be withheld or withdrawn should you become unable to verbally express your desires while incapacitated by a terminal illness.
Related to the living will is the “health care power of attorney” or “health care proxy,” which delegates authority to another to make medical decisions on your behalf (a standard “power of attorney,” rather than authorizing action in health care matters, permits someone else to act for you in a legal or business capacity).
A “trust” is a very common estate planning tool that can take many forms. A trust establishes a relationship by which a trustee manages and holds title to property for the benefit of one or more individuals. Trusts can be especially beneficial in situations involving minor heirs.
Finally, although it is not a legally operative instrument, a “letter of intent” or “letter of instruction” is sometimes composed by an attorney. A letter of intent contains information or instructions that may be needed by a deceased person’s loved ones.
Knowing the basics is a good place to start. But it is also important to talk with an experienced estate planning attorney to discuss your specific situation. A lawyer can help you put the legal structure in place so that your loved ones are not unduly burdened and your wishes are carried out.