Four Documents Most People Need

When it comes to creating a long-term financial and personal strategy, four documents may play a key role in your life. A will, powers of financial and healthcare attorney and an advance directive can help organize your life and your estate.

Advance Directive

Also known as a living will, an advance directive is a legal document that dictates the treatment you want in various medical situations. It may instruct medical professionals not to resuscitate you or provide a ventilator or feeding tube in the event of severe medical events, which you would name. This is a major life decision, so it is vital to talk to family before putting your wishes in writing.

Powers of Attorney

There are two types of legal powers you can grant loved ones, an advisor or others: One is a financial power of attorney and the other is a healthcare power of attorney. These separate legal documents dictate who would make your financial or healthcare decisions if you are incapacitated or otherwise unable to make these decisions on your own.

While most people associate these powers with medical incapacitation, you can also use them in other situations. For example, you could be overseas without access to your financial life. In this situation, you could grant financial powers of attorney to someone for the length of time you are unavailable.

Your Directions in Writing

The final document is actually the first you might consider creating, the foundation of most financial strategies. That foundation is a will, in which you dictate who gets what assets of yours after you die. While you may also require the use of trusts if you have a complex estate, a will determines who gets your home, jewelry, investments and other assets. They may be as large as a luxury home or as small as a sentimental piece of costume jewelry, but their disposition matters to your loved ones.

Life as an Asset

Even if you don’t have many assets, a will provides other important safeguards, including the naming of guardians for minor or special-needs adult children. You may also add to your assets cost efficiently with life insurance. This protection’s death benefit can replace a portion of the income beneficiaries depend on from you, or it can provide an income tax-free financial legacy to survivors.