The recent story of 27-year-old Jonathan Montiel reminds us all of the importance of estate planning, no matter our age or health status. Montiel, a healthy young father of three from San Diego, tragically passed away due to complications from the flu. He left behind his grieving wife and young children, ages 5, 2 and 7 months.
While Montiel's story is heartbreaking, it also serves as a wake-up call that we never know what the future may hold. That's why it's so critical for all adults, even young and seemingly healthy ones like Montiel, to have basic estate planning in place. An estate plan ensures your wishes are carried out and your loved ones are provided for in the event of your incapacity or death. Here are some of the key documents every adult should have:
Living Trust: A living trust allows you to place your assets into a trust during your lifetime to avoid probate when you pass away. The trust names a trustee to manage the assets for your beneficiaries. It includes instructions on how and when assets are distributed. For instance, you may want assets held in trust for minor children until they reach a certain age.
Advance Health Care Directive: This crucial document spells out your wishes regarding life-prolonging medical treatments if you become terminally ill and unable to communicate. It allows you to name someone (your health care agent) to make medical decisions on your behalf. Your health care agent should be familiar with your values and wishes. An advance directive also includes a HIPAA disclosure that allows your medical providers to release information to your agent.
Guardianship: If you have minor children, it's important to designate legal guardians in your will in case both parents pass away. Guardianship gives a trusted person the legal right to care for your children. When selecting guardians, consider both their willingness and ability to raise your kids. Discuss your wishes with them in advance.
Beneficiary Designations: Certain assets, like life insurance policies and retirement accounts, pass directly to the named beneficiary upon your death. These designations trump any instructions in your will, so it's critical to keep them updated. Review them any time there's a major life change like a marriage, divorce, or new child.
Powers of Attorney: A durable power of attorney for finances allows someone to handle your financial affairs if you become incapacitated. The medical power of attorney authorizes someone to make healthcare decisions if you are unable to do so yourself. Powers of attorney end upon your death when your will takes over.
Having these fundamental estate planning documents in place can provide tremendous peace of mind that your final wishes will be carried out and your loved ones will be cared for if anything should happen to you. While estate planning may seem overwhelming, an attorney can guide you through the process. The small investment of time and money is well worth it to protect your family's future. Don't put it off any longer - let Jonathan Montiel's story motivate you to act now.
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