Four Essential Estate Planning Documents That You Should Have

Every adult should have the following four estate planning documents:  1) last will & testament; 2) general durable power of attorney; 3) health care power of attorney (with mental health powers); and 4) living will. While circumstances may warrant the preparation of additional documents, such as a revocable living trust, each of the foregoing four documents is essential.

Most everyone understands the purpose of a last will & testament and thus its importance in carrying out a person’s wishes upon his or her death.  A last will & testament contains instructions about who will receive the assets in your estate after you die and who you want to be responsible for carrying out those instructions.  Here in Arizona, the person responsible for carrying out your instructions is referred to as a personal representative, also commonly known as an executor.  The authority of your personal representative arises only upon your death.

A general durable power of attorney gives your agent the authority to manage your financial affairs.  This authority is very important in the event you become incapacitated and can no longer manage your own finances.  Once you have chosen your agent (and preferably at least one alternate), you will need to decide whether the power is  “presently effective” or “springing.”  For those powers of attorney that are “presently effective,” your designated agent has the authority to act the moment it is signed.  The authority of an agent to act pursuant to a “springing” power of attorney is conditioned upon your demonstrated incapacity.  Typically, incapacity is proven by a written statement from one or more of your doctors that you are no longer able to attend to your financial matters.  The powers conferred upon your agent by a power of attorney always terminate upon your death.

The agent you designate as health care power of attorney is responsible for making important medical decisions on your behalf, and your agent’s power arises when you are unable to give “informed consent” to your doctors for treatment.   The agent you select as your health care power of attorney may also be responsible for deciding where you live, including admission to assisted living and memory care facilities.  Many health care powers of attorney also include a mental health care clause that allows your agent to consent to certain types of in-patient psychiatric treatment.

Many of us, from time to time, have discussed with friends and family our wishes regarding life-sustaining medical treatment in the event we are no longer capable of communicating our own wishes.  However, unless those wishes are expressed in a validly executed living will, they may not be honored by the doctors treating you.  A living will typically applies only in circumstances where you are a) suffering from a terminal condition with very little or no chance of survival, b) in a coma, or c) in a persistent vegetative state.  A living will is a companion document to your health care power of attorney since the agent you designate as your health care power of attorney is also responsible for carrying out the wishes expressed in your living will.  Like your health care power of attorney, a living will is only enforceable when you are incapable of giving informed consent for medical treatment.  While a living will may be used to reflect one’s desire to be kept alive through all means possible, it is far more common for a living will to express one’s desire not to be administered artificial food or fluids, not to be resuscitated by the use of drugs, electric shock, artificial breathing or other cardiopulmonary resuscitation, and not to receive life-sustaining treatment, beyond comfort care, that would serve only to artificially delay death.

Regardless of age, health, or financial status, every adult should have at least the four estate planning documents discussed above.  By having a qualified attorney prepare these documents, you can be confident that they reflect your actual wishes and are legally enforceable.

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