Posted on January 28, 2016 at 6:00 am
No matter how substantial or modest your assets might be, it is important for everyone to have an estate plan. If you pass away without a will or other valuable estate plan documents, it can be challenging for your family and loved ones to manage your affairs. Additionally, you will lose control over how your assets are distributed. If you die without a will in Washington state (“intestate” in legal terms), the state controls where your assets go; generally first to your spouse, next to your children, then to your siblings, and finally to your parents.
The following documents are all part of a well-made estate plan: a will, general durable power of attorney (for finances), power of attorney (for health care), and health care directive (sometimes called a living will). Each of these documents play an important part in your estate plan. To help you get started, here is a brief overview about the function of each document:
Your last will and testament enables you to make a legal disposition of your property upon your death. You select a person you trust, known as a personal representative, to administer your estate according to your stated instructions. You can name specific items, such as pieces of jewelry to go to someone as well as leaving assets to a charity of your choosing or you can leave your entire estate to one person. Be sure to tell your personal representative where your will and other estate plan documents are kept.
A durable power of attorney enables you to select a person (referred to as your attorney-in-fact), who will take charge of your financial affairs in the event that you become incapacitated. Your attorney-in-fact should be financially responsible, be able to pay your bills, make wise investment choices, and otherwise take care of your financial matters. Part of establishing a durable power of attorney means deciding when the document will take effect; most people choose to make it effective upon their disability. It’s also recommended that you name an alternate attorney-in-fact, in case the first person you select is unable to assist you.
Power of attorney authorizes your designated attorney-in-fact to make decisions about your medical treatment in the event of incompetency. You should feel confident that your attorney-in-fact will respect your wishes regarding medical treatment and make good choices on your behalf. I recommend that you select someone trustworthy who lives close by, so that he or she will be able to sign necessary documentation in the event of a medical emergency. You should also name an alternate in case the person you select—typically your partner or spouse—isn’t able to assist you.
A health care directive, commonly referred to as a living will, allows you to indicate whether you would like your life to be “artificially prolonged” in the event of an injury, disease, or terminal condition that prevents you from communicating your wishes. Although some people disagree with this document from a religious perspective, other people believe it creates the option for them to have more control over their death and for death to be a more dignified process.
Additionally, you should keep a detailed list of all passwords and accounts that you have for banks, credit cards, insurance, social media, retirement and any other accounts you may have and let your personal representative know where the list is kept.
Want to learn more about estate planning? Attend one of my Estate Planning 101 classes at the library in February.
Alicia Levy, a Washington state native, received her undergraduate degree from Washington State University in 2003 and graduated from Gonzaga University School of Law in 2010. Alicia has experience working in larger law firms in the region and started her own firm in 2015.