Updated: Jul 31, 2019
1. Durable Power of Attorney
You may have been thinking that a last will and testament would be first on the list, but a will cannot do anything for you if you become incapacitated. For example, if one spouse becomes incapacitated (such as falling into a coma, dementia, Alzheimer’s, or another significant medical issue) without a Durable Power of Attorney, the other spouse would not have access to the incapacitated spouse’s personal accounts (if you needed money from one spouse’s personal checking account you would not have any access).
A Power of Attorney allows an agent to act on the principal’s behalf if he or she becomes incapacitated (the principal is the person who executed the Power of Attorney). Having the addition of a Durable Power of Attorney allows the Power of Attorney to continue to remain valid even through and after the principal’s incapacity. Without such a power, one spouse could not have access to significant assets and would then have to petition the court and be appointed as a conservator of the other spouse. This process takes time and money and is often stressful. Further, there is no guarantee that the other spouse will be granted a conservatorship as someone else close to the principal could be declared the conservator (even though the spouse is typically granted conservatorship). Additionally, most spouses hire an attorney for representation in order to acquire the conservatorship which is often costly.
In sum, having a Durable Power of Attorney protects your assets and provides for your family if you were ever to become incapacitated. For the best protection, most spouses should have a power of attorney for each other.
2. Health Care Power of Attorney
A Health Care Power of Attorney allows the principal to appoint an agent to make medical decisions on his or her behalf if he or she is not able to do so. This document gives the principal the ability to choose a person who knows him or her well and is, therefore, best suited to make those major medical decisions for the principal.
If there is no Health Care Power of Attorney and the principal cannot make medical decisions on his or her behalf, then a court may have to appoint someone to do so. Again, this can be costly and time consuming, as some medical decisions are time sensitive and decisions may need to be made quickly. Having someone who can make those decisions for you whom you trust is most likely the best option for you.
This document should also include a HIPAA waiver which allows medical professionals to freely release your medical information to the people you appoint. It is imperative that your health care agent have full access to your medical records to ensure that they make the best medical decisions on your behalf. This waiver gives them that access.
Thus, every adult should designate an agent through a Health Care Power of Attorney and HIPAA waiver to ensure the medical decisions you want to be made are carried out.
3. Last Will and Testament
A Will directs where your assets go at your death. This document allows a person to provide for dependents and loved ones after death by directing to whom they want their assets to pass. Without a Will, your assets may not go to the people you want them to.
If you die without a Will you are said to have died intestate, which means your assets will pass by South Carolina's (SC) intestate succession laws. These laws can be unforgiving and often do not represent how you would want your estate distributed. For example, a surviving spouse may become dependent on his or her children for support, because per SC’s laws, the surviving spouse is only entitled to half the deceased spouse’s estate, and the remaining half will pass to the children of the deceased spouse. If any children are under the age of 18, then those assets can be tied up and the surviving spouse may not have complete control over them.
Therefore, every adult should have an up to date Last Will and Testament.
4. Guardian Nomination
Nominating a guardian is essential for all parents of minor children. A Guardian Nomination can be within a Will or as a standalone document. This document allows parents to inform the court of who they believe should raise their children. Without this document, the court may appoint someone whom you necessarily would not think is best to raise your children. This document is seldom used but is of great importance.
Additionally, there are 2 other documents/areas of importance.
Trusts. Trusts are a very effective tool for many estates. A properly drafted and funded Living Trust can avoid the cost, publicity, delay, and stress of probate. This allows for much faster and seamless distribution of your estate to your loved ones. Trusts can also allow you to control your assets after you pass. A Trust gives you the ability to better provide for your beneficiaries and can offer protection from creditors.
Proper Titling of Assets. Not all assets pass by the direction of your Will or are subject to probate. Assets with beneficiary designations (such as IRAs, 401ks, and life insurance) pass by operation of law. Other assets pass by operation of law because of the way they are titled, such as real estate which can be jointly owned with a right of survivorship. Additionally, some financial accounts allow you to execute a payable on death or transferable on death beneficiary (POD/TOD) which pass by operation of law. This means that no matter how well written your Will is, you may still have assets unaccounted for and not properly designated. Everyone should do periodic reviews of such assets and make sure they are passing to whom they desire to receive them. It is imperative that your assets are properly titled and that you have correctly designated beneficiaries where applicable.
What AVP Law Can Do for You and Your Loved Ones
We provide flat fee comprehensive estate planning services. Our estate planning services are professionally drafted and competitively priced. The whole process often takes under 2 weeks. Our most popular service is a comprehensive Will Package for a married couple. This includes several important documents for both spouses, a free initial attorney consultation, and proper formal execution of those documents. We offer other packages and services, and our prices can be found on our pricing page on our website here. Book now by scheduling an appointment for a free consultation here.
We also offer other services beyond estate planning. Please browse our website for more information. We look forward to serving you and helping you prepare for life.