Essential Types of Documents

Blog Post July 23, 2020
 

Power of Attorney (POA) – This document allows the person that you appoint as your agent to make financial transactions for you while you’re still alive but unable to do so yourself. For example, if you’re diagnosed with dementia, or have a car accident, having this document in place will allow someone to go to the bank for you or pay your bills. This document is only valid while you are alive.

Health care proxy – This person, or agent as it’s often called, is basically a “medical power of attorney.” He or she can make medical decisions for you if you are unable. For example, if you suffer from a disability and can’t speak to doctors or consider the medical information being given to you, your health care proxy can do it for you.

Living will – This document details your wishes for the advanced stages of your life. The health care proxy can use this list to understand what you want to happen in different situations of illness. For example, if you are incapacitated or need a feeding tube, you can stipulate in your living will what you would like to happen. Do you want to be kept on life support? Do you want to receive pain medications? It is helpful to think ahead about what you want and assist your health care proxy in making decisions for you if you’re unable.

Living trust – In some states, trusts are very common because they allow the trustee to bypass the court and the probate process that comes with a will. The trust can also continue on after your death. For example, you could name yourself the trustee and after your death or if you’re no longer able to hold the position of trustee, someone else can step up to the plate to manage your assets.

Last will and testament – This is a traditional will where, among other things, you will outline where you would like your investments and money to go upon your death.

Letter of instruction – This is not a legal document, but it is a great way to put down on paper your wishes for your funeral and other personal desires about cremation, burial and ceremony.

Insurance documents – In order to get the full benefit of your insurance plans, whether they be life or long term care, it's a good idea to compile the policy papers to make for easy reference. Draw up your own at-a-glance overview that includes company name, policy numbers, dates issued, benefit terms, contact information for the agents who issued the policies. Make it easy to access the benefts of these valuable plans and to pass them along to loved ones when need be.

Here are some helpful tips when considering all documents:

Update docs periodically – Review these documents every 3 to 5 years, especially if there is a major life change. Examples include a divorce, a death, a new child or a change in friendship or business relationship with one of your executors.

Name successor agents – Each time you name an agent as your power of attorney or health care proxy, it’s possible to list more than one in order of succession. This gives you options should one of your agents become unable to perform the duties you have asked him or her to do.

Get recommendations – If you’re using a lawyer to complete the documents, talk to family and loved ones about who they had prepare their documents. It’s best to also check rates so you are careful about who you use and the total cost. Consider using a certified elder law attorney if you’re preparing documents late in life.