Failure to plan may result in what is legally termed an accidental disinheritance. An accidental disinheritance occurs when you have no will or your will doesn't function properly. Because failure to plan means you risk harming those you love and subjecting your estate to needless tax, most people will need to make a plan for the future.
A Will and Testament
A will is a written document that permits you to state how you want your property or estate distributed, name an Executor (also called a Personal Representative) to distribute your property, pay debts and taxes, and handle other business affairs to settle your estate.
Who will be the guardian of my dependent children?
Your child is considered a minor in most states until he or she reaches age 18. It is important to appoint a guardian, so that if you pass away, the guardian may take physical custody of and care for your minor children.
Who will have the power to manage my finances?
Durable Power of Attorney for Finances
When you sign your will, you usually are able to manage your finances and personal affairs. However, that may not always be the case. There may come a time when you are in poor health and not able to manage your finances. During these times, you will want a plan to ensure your property is being cared for and your bills are being paid.
A durable power of attorney for finances is a solution to protect your property and yourself. A durable power of attorney allows you to appoint someone to make financial decisions if you are disabled or incapacitated. If you do not have a durable power of attorney for finances, the court may decide to appoint a conservator. A court‑appointed conservator may not understand you or your goals and may not share your values. The court may require the conservator to submit expensive reports and audits, which would be paid for out of your assets.
A durable power of attorney for finances permits you to select the person or persons who will act on your behalf. It enables you to select someone you trust and who shares your values.
Click here for a PDF of a sample Durable Power of Attorney.
Who will make my healthcare decisions?
A durable power of attorney for healthcare allows you to select a person who can assist your doctors in making healthcare decisions if you become unable to act on your own behalf. The Archdiocese of Kansas City in Kansas offers Catholic directives that provide a means of making known desires and directions regarding treatment or care for you in the event that you become irreversibly or terminally ill. Click here for a PDF of the document.
If you own property, you may wish to set up a living trust. A living trust may be set up during life and directs where your assets go. Unlike a will, a trust will not subject your estate to probate, which is often a lengthy and costly process that requires a court to settle your estate.