Guest Author - Sharon Michaels
Wills, Power of Attorney and Trusts are subjects many of us donít want to think about let alone deal with but, as we all know things happen. Preparation can help make uncomfortable life situations easier for you and the family and also give you the peace of mind of protecting your assets.
Let me share my personal experience. Just within the last seven years Iíve personally dealt with figuring out wills, trusts, power of attorney and even guardianship. Iíd never really thought about these things until I was responsible for aging relatives.
My dad, who was an attorney, DID NOT have any legal documents in place should he become incapacitated or die. When dad was diagnosed with Alzheimerís and mom needed to make decisions about housing and finances, she had to go to court to become dadís guardian. That of course, only made the emotional and financial situation even worse. From this experience, I quickly made sure the rest of my family had their legal and financial documents in order.
Who needs to have their financial and legal house in order Ė all of us!
I highly recommend you consult an attorney to make sure your legal documents are in order and properly prepared. This article is not giving legal advice. Itís hopefully going to get you thinking about taking the necessary actions to protect yourself, your family and your financial assets. Youíll want your financial advisor to be involved also.
Here are some common documents you should know about:
A Will Ė This is the one we most recognize. Basically, a will is a legal document indicating who will get your assets and possessions when you pass on. It goes into effect only when you die. It has no effect if you are incapacitated.
A Revocable Living Trust Ė This is basically to protect your personal and financial assets from having to go through probate (court). Most often recommended because it is easy to set up and may be changed as life circumstances change.
Incapacity Clause Ė Should be included in your Revocable Living Trust to cover you if you cannot handle your affairs due to incapacity. This part of the trust will have instructions on how to handle your personal and financial affairs and to carry out your specific wishes while you are alive.
Durable Power of Attorney Ė This is an important document especially for health care decisions. Youíre giving the responsibility to someone you trust (a family member, friend) to make your medical decisions and speak on your behalf should you become incapacitated. There is also a financial power of attorney to deal with your finances.
Believe me when I tell you this is just the tip of the iceberg. There are things like a pour-over will, guardianship for dependents, advance directives for health care, designating beneficiaries, choosing executors, and more. This is why I personally feel you must consult an attorney. There are online and assorted legal packages out there but none can give you the one-on-one expertise of a qualified attorney, especially one who specializes in wills and trusts.
Do your homework and decide how best to protect yourself, family and financial assets. It is much easier to be prepared than to try to handle legal and financial details during an emergency.
**Please check with financial and legal professionals before making financial and legal decisions. This article is not intended as legal, investment or financial planning advice.**
Both Suze Orman and David Bach handle the subject of wills and trust in their books.
Iíve included links to my review of Suze Ormanís Women and Money and David Bachís Smart Women Finish Rich.
Suze Orman - Women and Money
David Bach - Smart Women Finish Rich