For many people they hear "Estate Planning" and think, "I don't have an estate, that is for millionaires, I do not need estate planning". The term 'estate' has taken on a grandiose meaning lately but it actually refers to anything that someone owns when they die. And estate planning includes planning for scenarios that may or may not occur and having advanced directives in place. Below I will go through the different types of documents that may be used in a basic estate plan.
A Last Will and Testament (a Will) A will is a document where you can explain what you want to happen to all of your property when you die. In order to make a will in North Carolina you must be over the age of 18 and of sound mind. This means you must understand what you are doing when you create the will, i.e. who are your beneficiaries and how are you distributing property. It also must be signed before two witnesses and is typically notarized as well. North Carolina allows for other types of wills in special circumstances but this is the most common type of will. You are not required to give property to any persons, however, if you are married at the time of your death spouse's have certain rights to property even if they are not in your will.
A HCPOA (health care power of attorney) Is a legal document where you grant the ability for someone else to make health care decisions for you if you are unable to make these decisions on your own. Your agent is restricted to act in your best interest and in accordance with any wishes or restrictions you have written in the document. The power granted is only effective if you are unable to make those decisions on your own. This document should also be witnessed by two individuals and notarized.
A Living Will Is a legal document explaining the desired medical treatments of an individual if they have a terminal illness. It is very similar to a HCPOA but only covers end-of-life treatments. This document should also be witnessed by two individuals and notarized.
A Financial Power of Attorney Is a legal document granting someone the power to handle your financial affairs. You can limit these powers as you see fit, typically completed in a standardized form. For planning purposes you can create the power to begin only upon an event [incapacitation] or you can give authority right away. If you give a power right away it can either stop when an event occurs [incapacitation] or it can still be effective after that event. It is called a "springing" power of attorney if it is only effective if you are incapacitated. It is called a "durable" power of attorney if the powers are granted while you are of sound mind but lasts beyond incapacitation.
Senges Law Firm is located in Greensboro, NC serving individuals and small businesses throughout the Triad and surrounding areas. To contact us please visit www.sengeslaw.com or call 336-252-8878.
The information included here is for informational purposes only, is not exhaustive of all considerations when creating documents, is not intended to be legal advice and should not be relied upon for that purpose. We strongly recommend you consult with an attorney and do not attempt to create your own documents.