Death is a sensitive subject – especially as it relates to making decisions before and after the passing of a loved one. However, proactively creating and organizing end-of-life documents can lift a heavy burden from emotional family members when the time comes to make critical decisions. Here are some terms related to estate planning with which you should become familiar, although we urge you to consult your attorney before implementing any final documents, as each state can differ in terminology.
Durable Financial Power of Attorney
A Durable Financial Power of Attorney designates your agent, legally termed an “Attorney-in-Fact.” An Attorney-in-Fact can be a family member, attorney, or trusted advisor, and is designated while you are living to assist with business decisions or in the event you become unable to act.
Last Will and Testament
A Last Will and Testament removes any ambiguity as to who inherits your property and assets. In addition to financial matters, it addresses the guardianship of your children and executor of your estate, and provides direction for the distribution of your assets. A Last Will and Testament ensures your prior decisions are carried out according to your wishes, but has no legal effect until after death.
Healthcare Power of Attorney
A Healthcare Power of Attorney designates an agent to make healthcare decisions on your behalf in the event you become unable to make them yourself. This designation can place a heavy burden on the agent. Decisions, such as those concerning surgery and life support, are often difficult to make, so a trusted advisor is crucial for this role.
Unlike a Healthcare Power of Attorney, a Living Will removes the burden of making healthcare decisions in certain situations. It ensures that your predetermined healthcare decisions, or instructions, are legally documented. Unlike a Last Will and Testament, these decisions take legal effect while you are alive. However, a Living Will may only apply if you are terminally ill or permanently unconscious, so a Healthcare Power of Attorney has broader usage.
A Roadmap for Your Executor or Durable Power of Attorney
Not all end-of-life documents are legal documents. Providing the executor of your estate a document with information and the location (“your roadmap”) of other important documents can save time, expense, and energy. However, keeping this list continuously updated is just as important as creating it. Your roadmap may include information such as:
- Safety deposit box information and location.
- Bank and brokerage account information, including online access.
- Titles and loans to important assets (car, home, etc.).
- Usernames and passwords to accounts (i.e. social media, personal computer, etc.).
- Business interests or partner/shareholder contact information.
- Marriage license, divorce decree, etc.
- Contact list of professional advisors.
The thought of end-of-life documents can be daunting and overwhelming, and creating them can be even more so. A “checkup” of where you stand is crucial. As a certified public accounting firm, PYA is prepared to assist in creating or updating your end-of-life documents. If you have any questions about end-of-life documents, or would like to request a speaker on this topic for your organization or event, contact one of our executives below at (800) 270-9629.