No one likes to think about their own death. Where will your assets go? How will you care for your loved ones? What will the circumstances be? These are very important — but very unpleasant — questions to consider.
Still, death is inevitable, and we all need legal documents in place when it happens. Otherwise, your family will have to cope with burdensome financial and legal red tape, all while coping with grief.
Estate planning can be especially difficult to think about when a person is younger, since it can feel unnecessary to have end-of-life planning needs to be in place. But the unexpected can happen, so your wishes should not be left to chance, especially if you have children who are minors.
To make sure your family is well provided for, there are four key estate planning documents you can prepare, no matter how distant you expect (and hope) your death to be.
1. A Will
A will is the most well known of these documents. It ensures that your financial resources and possessions are inherited by the people you want to benefit. Without a will in place, your state’s legal system decides who your rightful heirs are, and they may not be the people you would choose.
One especially sensitive decision concerns who would raise your children or care for a dependent with special needs. Naming a guardian in your will makes it clear who you would like to raise your children in the unfortunate circumstance that they are orphaned.
In a will, you also name your executor. This is the person or persons who will see that your desired distribution of assets and property takes place. Make sure that the person you name is willing and able to take on that role. It’s hard work to be an executor, and it requires a great deal of responsibility. Someone who is disorganized or easily overwhelmed is probably not a good choice. In cases without a will, the state will appoint an executor. Wouldn’t you rather be certain it’s someone you trust with your assets?
Upon death, a will is publicly filed, but you can also include a letter of instruction, which is private and not legally binding. This letter relays any thoughts and wishes that you want your loved ones to know.
2. Durable Power Of Attorney
End-of-life planning doesn’t just concern death. It also pertains to any circumstances that might make it difficult for you to care for yourself. A durable power of attorney document appoints a person to step into your financial shoes if you are mentally or physically disabled, whether temporarily or permanently.
Your power of attorney can pay your bills, manage your financial assets, make real estate transactions and act in any financial capacity that you can, including filing your taxes. Clearly, this should be a person you can trust.
You can establish an immediate power of attorney, which gives a person the ability to act on your behalf for a limited or permanent time period, or you can set up a power of attorney that becomes active only upon a qualifying event, such as a temporary or permanent disability.
The authority given in a durable power of attorney ends with the death of the person who granted that authority.
3. Advanced Medical Directives
Many individuals have preferences about the kind of medical care they would like to receive (or not receive) before they die. Advanced medical directives allow a person to outline medical wishes regarding medical interventions.
There are three main types of advanced medical directives:
• A living will states what lifesaving measures you do or do not want to be performed. These documents are often used in a situation in which medical treatments are being administered to prolong life in a terminal situation. This may include your preferences regarding life support, artificial feeding, cardiopulmonary resuscitation (CPR), antibiotics and intravenous hydration.
• A durable power of attorney for healthcare allows you to appoint another person to make medical decisions on your behalf. The scope of that authority can be large or small, depending on how the document is drafted.
• A do-not-resuscitate order instructs healthcare providers not to perform CPR in the event of a cardiac arrest or if you stop breathing.
4. A Trust
A trust is a legal arrangement that greatly expands your options for managing your assets. It’s a fiduciary relationship that allows a person to transfer property or money to a second party (a trustee) for the benefit of a third party. The trustee holds the assets in a trust fund for the beneficiary.
Some people don’t need a trust, but you should consider setting one up if you’re concerned about controlling the ways your heirs inherit your money. Trusts can also prevent your beneficiaries from having to go through the lengthy probate court process to divide up assets. Avoiding probate can make the distribution of your assets much faster, and it makes your executor’s job much easier.
Mitigate The Unknown Variables
When you die, your loved ones will be faced with many unknowns. Their lives will be profoundly altered, and it will take time for them to come to terms with their loss.
You can’t prevent their grief, but you can make their lives easier by planning ahead and outlining all the logistical steps they will need to take. A will, a durable power of attorney, advanced medical directives and a trust are four essential documents designed to ensure that your desires are met and that your loved ones can smoothly navigate the process.
This article originally appeared on Forbes.
