When you look at your life, you probably have multiple sources of pride: a beautiful family, a successful career or business, and an inviting home. Whatever it is that makes you proud, protecting it is vital to ensure its future success. Your home and business probably have insurance, but what can you do to protect yourself and your family?
Things like health insurance and life insurance can help create a comprehensive protection strategy, but everyone, young and old, needs to take a moment and make some important decisions that will impact their lives and the lives of their families for years to come. Here are the three must have documents everyone needs:
1. Last Will and Testament
Almost everyone has heard of a Last Will and Testament. It says who gets a person’s stuff after they pass. However, did you know that without a Will, the state where a person lives will determine who gets their property? These “laws of intestate succession” can be somewhat confusing and people are often surprised to learn that in many situations, things don’t work they way they want. The only way to ensure that your property is distributed pursuant to your wishes is by creating a Last Will and Testament. Creating a Will can also save years of family conflict if potential heirs disagree about who should get what.
Another critical function of a Last Will and Testament is naming a guardian. Many people with young children have told me “I talked to my mom/sister/friend about taking the kids if something happened to me.” While I applaud them for thinking about this difficult situation, such a conversation doesn’t have any weight under Arizona law. In Arizona, the only place a person can name a guardian for minor children is in a Last Will and Testament. If a parent doesn’t name a guardian, the state will pick one for your children. Do you trust the state to do as good of job as you would have? I certainly wouldn’t.
In addition to naming a guardian to care for minor children, a person also names a conservator to manage any assets left to minor children in their Last Will and Testament. The right conservator will manage these assets wisely, the wrong conservator might blow all of the assets before the child can even use them. Without a Last Will and Testament, the court will pick a conservator for you.
A Last Will and Testament also names a personal representative (sometimes called an executor) to manage your estate after passing. This is the person who opens a probate, deals with the court, gathers and distributes assets, etc. The wrong personal representative could wreak havoc on your estate and your family. But if you don’t name one in a Last Will and Testament, the court will pick one for you.
Since a Last Will and Testament accomplishes so many critical functions, it is the number one document on our must have list. With a Will, you can protect your legacy and those you love most.
2. Health Care Power of Attorney
A Health Care Power of Attorney grants authority to an agent you pick to make your health care decisions if you can’t do so yourself. With health care privacy laws and doctors afraid of getting sued, you’ll be hard pressed to find a doctor who will let someone make your health care decisions without the appropriate authority. Without a Health Care Power of Attorney, this authority comes from a court. Court proceedings to obtain this type of authority don’t happen overnight and they aren’t cheap. Plus, in that instance, the court will decide who should make your health care decisions. Shouldn’t YOU be the one deciding this?
People often say that few things in life are more important than your health. Because health care decisions can literally mean the difference between living and dying, a Health Care Power of Attorney is the number two most important document on our list.
3. Durable Power of Attorney
Like a Health Care Power of Attorney, this document grants authority to an agent you pick, except with a Durable Power of Attorney the authority granted is the authority to manage your finances and assets if you can’t do so yourself. This is a hugely important role as it encompasses nearly everything in your life: paying for your home, putting food on the table, running your business and paying employees, doing your banking, and even making sure your pets are cared for. Think about what would happen if you suddenly became unable to do all of these things. While you were sick and unable to do anything about it your life would turn into chaos, virtually overnight. With a Durable Power of Attorney, your agent can jump right in and keep things functioning the way they should and allow your loved ones to focus on what’s important – you. Without it, your loved ones are back in court and waiting to get authority to manage these important parts of your life. Again, the judge, not you, will decide who gets that authority.
A Durable Power of Attorney doesn’t take too much time to create but can have lasting effects on your life. Because of the huge role this document can play in your life, a Durable Power of Attorney is the number three must have document on our list.
Since these documents are so critical, creating them should be easy and accessible to everyone. Don’t wait until it is too late. Call Arizona Wills and Trusts lawyer Abigail Neal today at (480) 699-7992 to get started on your custom estate plan.