There is more than one kind of power of attorney and we should have them in place before someone needs to act on our behalf. It is critical to work with someone who understands the implications of each kind and to make sure your wishes are documented and can be acted upon with minimal interference.
We all know we need a will – but do you know what should be in it? Do you know all the things that you can specify in your will? Do you understand how to appoint executors and trustees and what their roles would be? It is also important that your executor is aware of your wishes while you are still around to explain them. All these questions need to be answered as part of the production of your final documents.
If you have a spouse or children (regardless of age) it is important to understand survivor rights. Often you can protect a surviving spouse or children if you structure a will or power of attorney in a way that takes into account the options for survivors.
Do Not Resuscitate (DNR) orders come into play at a critical time in life. There are choices and it is important that family and your power of attorney need to be aware of your wishes. This can be a difficult decision and an even more difficult conversation to have with those who care.
A guardian is specified in your will to take care of minor children if there are any and if your spouse pre-deceases you. This is important so that the court knows who you want to be responsible for your children. A trusteeship is set up to manage financial affairs for minors or other beneficiaries not capable of managing assets on their own.
It is important to understand inheritance taxes ahead of time – with proper planning you may be able to avoid paying unnecessary taxes if the right actions are taken and planned for prior to your death. Not understanding inheritance taxes may reduce how much is left for your beneficiaries and may complicate the process. For example, you can make ownership of a house a joint one, and then it is easily converted by rights of survivorship to the remaining partner with no tax considerations.