Retirement offers you the chance to explore the world, spend time with friends and family, and try new activities. You may even have committed to new eating habits to improve your health and give you the boost to enjoy your new lifestyle. Now also may be a good time to commit to ensuring that concerns about the handling of future financial affairs and health care decisions do not intrude on your ability to enjoy retirement.
Peace of mind comes from knowing that someone you trust will be able to handle your financial affairs and make medical decisions on your behalf in the event you cannot do so on your own. It is also knowing the assets you worked hard to acquire will be distributed according to your instructions. Achieving peace of mind starts with a consultation with an estate planning attorney and the preparation of the following five essential legal documents that every senior should have.
Last Will and Testament
A last will and testament, or simply a will, lets you designate a person who you trust and have confidence in to carry out your wishes to manage the winding up of your financial affairs and the distribution of your estate. A will contains your instructions for management of your financial affairs and distribution of the assets by a person you name to be appointed by a court as the executor. It ensures that your wishes are honored and your loved ones provided for after you are gone.
Wills do not take effect until after your death and require a court proceeding, known as probate. Probate is the legal process in each state for a judge to verify the authenticity of the will and issue an order, referred to as letters testamentary, granting legal authority for your executor to act on behalf of your estate.
Unlike a will that only becomes effective upon your death, a trust may be created and put into effect during your lifetime. Upon your death, the assets in the trust are distributed according to your wishes contained in the trust agreement.
The trustee you choose to manage the assets does so according to the instructions you provide in a written trust agreement. Wills and trusts must be set up according to the laws in your state in order to be legally enforceable.
Your attorney can review your financial situation and discuss the options best suited to it. Some people may suffice with only a will, while others may do better with a trust or a combination of a will and a trust.
Power of Attorney
Situations may arise when you need to entrust someone to handle a financial matter on your behalf. For example, the sale of a home in another state when you cannot attend the closing can be entrusted to another person through a power of attorney.
There are two types of powers of attorney, general and durable, that allow you to designate an agent with legal authority to act on your behalf. The primary distinction between a general power of attorney and a durable power of attorney has to do with what happens in the event you can no longer make decisions on your own.
The authority given to an agent in a general power of attorney ceases if you cannot make decisions on your own. In contrast, a durable power of attorney continues in full force and effect even if you become unable.
Powers of attorney offer a convenient method for appointing someone you trust to handle financial matters for you, including:
- Managing assets.
- Paying bills.
- Handling banking transactions.
- Handling real estate transactions.
- Making business decisions.
- Managing investments, including buying and selling stocks.
- Purchasing or canceling insurance policies.
- Handling insurance claims.
- Collecting and depositing rents
You have the right to grant your agent as much or as little authority as you wish simply by indicating the extent of the authority in the power of attorney.
Durable Power of Attorney for Health Care
A durable power of attorney for health care allows you to designate an agent to make decisions about the medical care you receive when physical or mental incapacity makes it impossible for you to make them. Do not confuse this document with a financial durable power of attorney, which does not grant your agent the right to make decisions about health care.
Advance Directive for Health Care
An advance directive for health care is a legal document containing your wishes and preferences regarding the medical care you receive and end-of-life decisions in the event you cannot voice them to your doctors due to physical or mental incapacity. It serves as guidance for your family and for the person designated as your agent under a durable power of attorney for health care.
Unforeseen circumstances may arise regardless of how old or how young you happen to be. These five essential legal documents should be part of the estate plan of every adult. They will provide peace of mind in knowing that someone will be available to manage your financial affairs and medical care in the event you cannot do so on your own.
Author's Bio: Steve Howards
Steve has been writing legal-centric articles for several years now. He started working with the personal injury attorney law firm Herrig & Vogt in 2019 as the Content Marketing Manager, which has allowed him to expand on his writing in personal injury, family law, and much more. Steve strives to offer the public advice on various laws covering a variety of practices.