This article will describe the importance of drafting the four essential estate planning documents: a Will; a Living Will; a Power of Attorney; and a Health Care Representative. At Yosha Cook & Tisch, we offer a flat and affordable rate for all four documents that are discussed.
It is important for every responsible citizen to have a will in place should anything tragic occur. A will controls how your assets are distributed upon death. If you do not have a will in place, your assets will be passed through probate according to Indiana’s intestacy statutes. This means that neither you nor your loved ones would have any say in how the assets are distributed. The intestacy statutes contemplate many different scenarios and distribute percentages of your net worth to varying descendants dependent upon the surviving heirs. For example, if someone is survived by their spouse and children, the children would receive 50 percent and the spouse would receive 50 percent. By creating a will, you would be able to distribute your assets in any way you would like.
A will also allows you to establish guardianship for any minor children that you have at the time of death. If something tragic would occur to you and your spouse while having young children, you want to have a plan in place.
A will also allows you great flexibility in the distribution of your assets. For example, a testamentary trust can be created within the will. A trust would allow the principal of your net worth to be held by the trustee, who has a duty to maximize the profits of the trust. The profits are then distributed to the beneficiaries (usually young heirs under the will). Age distributions are also set up to distribute the principal, which ensures that the principal will grow and no young children would be inheriting a large sum of money.
A Power of Attorney and Health Care Representative
These documents are important and are applicable when someone becomes “legally incapacitated.” This legal term simply means that someone is unable to understand the decisions they are making. This is commonly applicable when someone of old age suffers from dementia or when someone suffers a traumatic brain injury. The Power of Attorney document allows a close and trusted individual to make legal and financial decisions on your behalf. For example, it would enable the trusted individual to sign checks on your behalf, pay bills, access bank accounts, etc. On the other hand, the Health Care Representative document is strictly compliant with HIPPA laws and allows a trusted individual (usually the same person as POA) to make healthcare decisions on your behalf.
A Living Will
The final important document to have in place is the Living Will. The Living Will allows someone to make a decision as to whether they want to stay on life support if that situation ever arises. Without a Living Will, you are putting your loved ones in a horrible position having to make that choice for you. In the Living Will, you can select one of three options: (1) I choose to be on life support; (2) I choose not to be on life support; (3) I choose to allow my health care representative decide based on the circumstances.