It is commonly believed that estate planning and all the related documents it requires are things that only very wealthy retirees need. This is not true. As a recent article in Forbes points out, we all need an estate plan, regardless of our net worth or age.
You truly never know what the future will bring. Therefore, its important to create a will and/or a living trust and update them as needed. It's also important to have other legal and medical contingency plans in place in case you become unable to communicate or make decisions on your own behalf.
Two important end-of-life matters that many people forget to plan for are the creation of an advance health care directive and designating durable power of attorney. There are two parts to an advance healthcare directive: a living will and health care power of attorney. If you ever become incapacitated and unable to communicate, a living will is a written record of your wishes for healthcare at the end of your life. You can also designate health care power of attorney; a person you trust to make health care decisions for you if you are unable to do so yourself.
You may also want to designate durable power of attorney, which is not the same as health care power of attorney. A trusted person with durable power of attorney can make financial decisions on your behalf when you can't. One scenario could be paying your bills if you were in a coma.
If you're worried about creating a solid estate plan and getting all your affairs in order, the good news is that you don't need to know everything going in. An experienced estate planning attorney can walk you through the process and explain each step in order to help you make the best decisions for your future.
Source: Forbes, "Estate Planning For The Rest Of Us," Liz Davidson, Sept. 12, 2013