Estate Plan Essentials That Could Save You Tens of Thousands in Your Lifetime
The essential estate planning documents that are only active during your lifetime are the Power of Attorney and Advance Health Care Directive. These two documents allow you to select a person to act on your behalf in the event you are unable to do so.
Just completing these two documents can be very inexpensive and could save you tens of thousands of dollars in your lifetime. While these documents terminate upon your death (or shortly thereafter), these are the most important documents contained within an estate plan because these are the main documents that can potentially affect your livelihood during your lifetime.
In the past, most people maintained their capacity and managed their own affairs up until death. As modern medical advances continue to prolong the average life expectancy, the likelihood increases that the average person will become unable to manage their own affairs during their lifetime.
From this perspective, these documents are best described as a form of insurance. A Power of Attorney and Advance Health Care Directive establish a plan for one or more designated individuals to step aboard and manage your affairs, according to your wishes, in the event that you are unable to do so. These documents can also be modified to allow you to put someone in place to manage your affairs for even as simple of a reason as you no longer wish to deal with making complicated financial, legal and medical decisions.
If you do not have A Power of Attorney and Advance Health Care Directive and you become unable to manage your own affairs, then the only alternative is to have a representative appointed through court proceedings in order to manage your affairs—this personal is called a "conservator" in California (also referred to as a guardian in some other states). Having the courts create a conservatorship on your behalf can be extraordinarily expensive for you personally and can completely undo any informal estate planning mechanisms you have in place.
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