We understand that estate plans are difficult to think or talk about. Nevertheless, you still need one regardless of your circumstances because you never know what the future might bring.
If you are still single, relatively young and not wealthy, you do not need an elaborate estate plan. However, AARP describes basic estate planning documents that you should create to prepare for an unexpected event that could adversely affect you, and therefore your loved ones indirectly.
A will is one of the most basic estate planning documents. It only takes effect when you die and serves two main purposes. The first is to designate who is to receive your property following your death. The second, and arguably more important, purpose is to name a guardian for your minor children if you have any.
- Advance directive
Also called a living will, an advance directive describes the treatment you wish to receive if you become incapacitated and are no longer able to communicate your wishes. For example, if you do not wish for resuscitation in the event that your heart stops, your advance directive should indicate that.
- Powers of attorney
A power of attorney designates someone to make decisions on your behalf in the event of your incapacitation. You can name separate powers of attorney to handle financial and health care decisions, or you can name one person to serve in both capacities.
If you have an advance directive, you might wonder why you need a health care power of attorney. A power of attorney cannot override your advance directive, but your attorney-in-fact can make decisions if a situation arises that you did not anticipate in your living will.