Many individuals believe estate planning is a matter of creating a will or trust. While often true, other aspects of a well-made estate plan may help protect both you and your family. Planning ahead could help make the future less uncertain.
A comprehensive estate plan generally includes a health care proxy and a power of attorney. With these two documents, you can name one or more trusted individuals to make medical and financial decisions on your behalf if you become ill or incapacitated.
What are the benefits of creating a health care proxy and a power of attorney?
A health care proxy is a legal instrument that enables you to name a trusted friend or relative to act as your health care agent. As noted by University of Florida Health, if you become incapacitated, a predesignated health care agent can discuss your medical procedures and treatments with your doctors. He or she can then direct them to administer only those surgeries or treatments that meet your preferences.
The POA assigns decision-making authority to a predesignated agent to handle your financial and non-medical affairs if you cannot do so on your own. You can customize a POA to limit the decision-making authority to specific areas, such as real estate or retirement-fund issues.
Is estate planning something I may not need to consider until I am older?
Young adults often overlook the importance of creating an estate plan. If a fatal accident occurs, however, your minor children may need a reliable adult to look after them.
A predesignated legal guardian can take care of your minor children’s financial matters when they are too young to do so by themselves. Creating a trust to manage your property may also help in providing a secure financial future for your survivors.