Estate planning is a necessary part of preparing for the future. However, in the here and now, the necessity of estate planning documents may not be incredibly apparent. Unfortunately, it often takes the worst-case scenarios to bring the importance of estate planning to light.
This post outlines estate planning documents every Wisconsin resident should draft before they are needed and why it is so important to make estate planning a top priority.
Will
This estate planning document is one of the most well-known and well-misunderstood. There are several misconceptions surrounding wills, but its also one of the most-needed estate planning tools.
A will is a legal tool for a person to express their wishes when they cannot. Unfortunately, verbal expressions are not enough to spur action in the State of Wisconsin. For example, telling a relative they can have an heirloom does not make the item exempt from a battle among family members.
People can use a will to detail these wishes:
- Which persons or organizations should receive assets from the estate
- Which person is responsible for the care of minors in the household (if the other parent should also be incapacitated)
- The person or organization that serves as the executor of the estate and is responsible for settling the estate (including distributing assets)
- If a trust is established for asset distribution
If there is no will drafted for an estate, the distribution of assets and settling of debts is handled by other parties who may not follow the wishes of the decedent. In Wisconsin, a legal will must be drafted (ideally by an estate planning professional) and signed by the individual as well as two witnesses. The witnesses should not be beneficiaries who receive assets as spelled out in the will or lawful heirs of the estate. It is also recommended that the will is stored in a safe location in the full knowledge of a trusted person.
Durable Power of Attorney
A Durable Power of Attorney designates a party who can make financial decisions when an estate owner is unable to do so. This is essential for situations when a person is sick or hurt, and financial matters need to be handled during this time. The lack of a Durable Power Attorney can leave family and friends struggling during what can be a very difficult time.
A Durable Power of Attorney is only applicable when a person is alive; this power ends when the person dies. The person can express in the document what financial matters can be handled. A Durable Power of Attorney can give an agent the right to purchase and sell real estate, pay for expenses, and sign legal documents on the individual’s behalf.
Healthcare Power of Attorney
A Healthcare Power of Attorney is a separate estate planning document from the Durable Power of Attorney. This estate planning document designates an agent to make healthcare decisions for another. This agent can be the same as the will executor, party named in the Durable Power of Attorney, or can be another party.
This estate planning document can be incredibly important when a person cannot make the decisions or express their wishes because of a health issue. In these cases, a agent can make decisions and carry out any wishes previously stated.