Approximately 64% of Americans don’t have a will. Are you one of them? If you pass away without a will, it means you have died “intestate.” When this occurs, the intestacy laws of the state will distribute your property at death. Dying without a will creates many hassles for your loved ones: A probate judge appoints your executor, you have no say in distributing your property, and a judge will decide who will raise your kids if they are minors, to name just a few.
The inflexible nature of intestacy rules will fail to account for special situations or unique circumstances. Serious problems can arise in situations with second marriages, and estates that pass by intestacy rules are more likely to become the subject of litigation.
Estate Documents Every Adult Should Have
Regardless of age, income or occupation, every adult should have the following estate planning documents:
Will: A will is the heart and soul of your estate plan. It will transfer your assets, appoint a guardian for minor children and name an executor—the individual or institution that takes charge of your estate after you die and distributes your property per your instructions.
Durable Power of Attorney: This document appoints a trusted friend, family member or advisor as an agent to act on your behalf in a variety of financial and legal matters. (For related reading, see: Power of Attorney: When You Need One.)
Health Care Proxy: Sometimes referred to as a health care agent or health care power of attorney, this document authorizes someone to make medical decisions on your behalf. You also may want to consider obtaining a living will (also called an advance directive), which expresses your preferences about certain aspects of end-of-life care. These issues may be covered in the health care proxy or in a separate document.
How to Obtain These Documents
The best way to get these documents drafted is through an estate planning attorney who practices in your state. If you know of one, call them and arrange a meeting. Once they learn about your overall situation and objectives, they may offer recommendations that go beyond the basic documents recommended in this article. Nothing beats personalized advice and planning from a specialist who thoroughly understands your situation and what you want to accomplish. If you don't know an estate attorney, try to get a referral from a friend, family member or colleague.
If you can’t or don't want to meet with an estate attorney for whatever reason, you have online options for drafting these documents, which is certainly better than doing nothing. Three of the more popular online resources for drafting estate planning documents are: Quicken Willmaker, Rocket Lawyer and Legal Zoom.
There is a famous expression: “You can prevent what you can foresee.” When you foresee the problems of dying intestate, you can prevent such problems by drafting the estate planning documents covered in this article while you are alive and well. If you're one of the 64% of Americans without a will, what are you waiting for? The future is uncertain, so get started today!
(For more from this author, see: Retirement Today: An Evolution of Work and Leisure.)
Disclosure: Evan M Levine is an SEC Registered Investment Advisor.