Overall, estate planning generally serves two major functions. First is the function that most people think about: "Who gets my stuff after I die?" However, there is a more important reason to engage in estate planning. That is the second question which is: "Who has the legal authority to act on my behalf?" Most people don't think about this second function, but it is perhaps even more important than the first. It is certainly equally as important.
Most of the time, people just don't die instantaneously. Sometimes there are one or more periods of disability or incapacity where the individual cannot act on their own behalf. It could be a prolonged sickness or otherwise. Having the legal documents prepared in advance allowing those you've chosen to act on your behalf can be extremely beneficial to you and your family.
Most people don't think they will ever become disabled or incapacitated. However, you never know when something might happen. Do you have the proper paperwork in place? Do you have the proper authorizations allowing access to private medical and financial information? Do you have the latest health care documents? How recent are your documents? If your documents are more than 10 years old, your family may find resistance from certain entities that may not be eager to honor a document that is over 10 years old. In many cases, there is nothing legally insufficient about your documents. However, that being said, some institutions and facilities are reluctant to accept documents that are more than 10 years old. Many places are concerned about fraud and honoring older documents makes their legal departments very nervous. Generally, the more recent your documents (especially health care documents and powers of attorney), the more likely they will be honored when the time comes. I tell clients to refresh their documents every 7 years or so (or if there is a major life change).
Also, you want to think about long-term care options. If you need long-term care, your family might need to help you qualify for certain government benefits. If you don't have long-term care insurance or don't otherwise have the funds to pay for long-term care, you may need governmental assistance. For that to occur, your documents need to have the requisite language for those acting on your behalf to comply with all the rules surrounding said benefits. You need to make sure your living trust and durable power of attorney allow you to obtain medical or other government benefits.
Therefore, It's not just about who gets your stuff after you pass away. That's what most people think is estate planning is all about. However, you need to make sure people have the legal authority to act on your behalf when it comes to financial and health care matters.
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