A sage once asked an important question of his disciples: “If death is certain, but the timing of our death is uncertain, how should we live today?”
Only you can answer that question for yourself, but we can tell you it’s important to prepare the following five documents while you are sound of body and mind and capable of providing instructions for how you want your estate to be handled!
Will
A will is a legal document that states how your property will be distributed upon your death. It names an executor, or a personal representative, to manage your estate until the final distribution is made. If you have young children, your will includes the name(s) of the individual(s) you want to be the guardian of your minor children should you die prematurely. Without a will, you are said to have died “intestate.” If you die without a will, the intestacy laws of your state will determine how your assets are distributed. The courts will decide who the guardian of your children will be.
Durable Financial Power of Attorney
A durable financial power of attorney identifies the person you choose to manage your finances if you become incapacitated or are unable to make financial decisions yourself. The document is “durable” because it does not terminate if you become disabled or incapacitated; it endures and allows your agent to make financial decisions and manage your financial affairs when you can’t.
Durable Power of Attorney for Health Care
Similar to a durable financial power of attorney, a durable power of attorney for health care is a written document that authorizes a person to be your agent and to make decisions on your behalf when you are unable to do so. The durable power of attorney for health care works in tandem with your living will. The living will outlines your specific desires regarding your medical treatment; the durable power of attorney for health care names your agent who will make decisions about your health care when you are incapacitated or disabled and no longer able to express your wishes yourself.
Living Will
A living will, also known as an advanced healthcare directive, is a written statement detailing a person’s desires regarding medical treatment in circumstances when they are no longer able to say what they want or give informed consent.
HIPAA Privacy Authorization Form
A HIPAA privacy authorization form allows doctors and other health care professionals to disclose relevant health information and records to your designated power of attorney for health care or to any other persons you designate on the form. HIPAA is the Health Insurance Portability and Accountability Act of 1996, which sets security provisions for safeguarding your medical information. Without your specific authorization, medical professionals can’t release your medical information to anyone else but you.
We believe these five documents are important for everyone, regardless of income or wealth. There are a variety of resources and professionals who can help you prepare the documents. We encourage you to speak with your Certified Financial Planner Professional™ about how to proceed with arranging your documents.
Andrea L. Blackwelder, CFP®, ChFC, CDFA® and Joseph D. Clemens, CFP®, EA are the founders and partners of Wisdom Wealth Strategies. Their shared passion is simple: to bring financial empowerment, understanding, and peace-of mind to people who wish to improve their financial future, build wealth for their families, and achieve financial independence. Click here to find out more about how you can work with the Denver Financial Advisors at Wisdom Wealth Strategies.