Most people know that they should have an estate plan. However, statistics are routinely reported reflecting the fact that many people still don't have the necessary estate planning documents even though they know they should. Like many other tasks, some people avoid estate planning simply because they don't know what to do or which documents apply to their particular situation. A recent article recognized this problem and sought to educate readers on what exactly needs to be in a comprehensive estate plan - in most cases.
First, the article mentioned wills and trusts. Almost everyone needs a will, especially individuals or couples who have minor children, because the will is where the estate planner expresses their wishes on who would raise those minor children in the event that the children are left without a living parent, among other things. Trusts are a whole other ballgame altogether, as anyone familiar with previous posts here would know, and won't necessarily apply in every situation.
Fortunately, the article did mention one area of estate planning that gets overlooked too often: powers of attorney. The fact of the matter is that many people associate estate planning with death, but there are several documents that actually deal more directly with life.
In Michigan, there are two different powers of attorney that need to be included in every estate plan. First, there is the health care power of attorney. This document is intended to name a patient advocate who can make medical decisions on the estate planner's behalf in the event that the estate planner becomes incapacitated and cannot make decisions on their own. The second type is a durable power of attorney. This document names an appointee to manage a person's financial and business affairs, also in the event that the estate planner is unable to see to these tasks in the event of incapacitation.
Source: Daily Finance, "Documents that Should be Part of Everyone's Estate Plans," Andrea Murad, Sept. 5, 2013