All the time. Anytime. Now. When you are pregnant or having a child it is a good time. When you are getting married it is a good time. When you are thinking about retirement it is a good time. When you have assets it is a good time. When you don’t think your assets are worth anything it is a good time.
Everyone should have three basic estate planning documents executed.
- Will
- Durable Power of Attorney
- Health Care Proxy.
No one wants to plan for their health to fail or their mind to deteriorate or even to die. However, everyone must consider that it is a possible reality and ultimately you will also die.
Will
Most people think “I have nothing so why should I waste my money.” The truth is everyone has something. It might not be assets, but children. When you first have children, no matter your age you should have a Will executed. The purpose of the Will, even without assets, is to ensure that you pick the guardian(s) who will care for your children when you are no longer here. If you have assets you want to ensure that your assets go to the people you want to leave them to. If you do not have a Will then your estate must be probated and anyone, even a stranger, can seek to be the person in charge of distribution of your assets.
Durable Power of Attorney
Once executed, a power of attorney comes into effect when you are mentally incapacitated. The person who you designate will make financial decisions on your behalf and pay your bills during the period of incapacity. If you later gain capacity, such as coming out of a coma, then the assigned power of attorney no longer has authority to act on your behalf until and if you become incapacitated again.
Without executing a power of attorney, and if you became incapacitated, then someone would have to go to court and obtain a conservatorship to pay your bills. The power of attorney allows the same privileges without the need, time and expense of having to go to court to get such permission. If bills do not get paid then you may lose everything you have worked so hard for, including your vehicle or house.
Health Care Proxy
Like the power of attorney, a health care proxy comes into effect when you are mentally incapacitated. The person who you designate will make medical decisions on your behalf during the period of incapacity. If you later gain capacity, such as coming out of a coma, then the assigned proxy no longer has authority to act on your behalf until and if you become incapacitated again.
Without executing a health care proxy, and if you became incapacitated, then someone may have to go to court and obtain a guardianship to make medical decisions. Most people assume that because they are married their spouse has this right, or their parents if not married. The proxy allows you to pick the person who can make the medical decisions. It does not have to be your spouse or your parents.
Just think, if you are a child of divorced parents who agree on nothing, and you are not married, will your mother or father make that decision? Assuming you have a good relationship with both parents, they are both in the hospital demanding to make that medical choice on your behalf, yet they disagree on the medical treatment. Without a health care proxy, the hospital will be unable to act (absent and emergency) until a court intervenes and determines who should make the medical decision. Court proceedings can be time-consuming and costly. The health care proxy avoids the needs for a court to intervene.
Once you have a health care proxy executed do not sign another one just because the hospital or doctor’s office gave you another one. If you do you are voiding out the previous one done by an attorney. Instead simply tell the medical providers you already have one.
Once you have executed the documents it does not mean you never should think about them again. They should be reviewed and updated as needed. It is my suggestion that you review them at least every five (5) years.