Many people say, ” I will take care of things like my will and power of attorney when I get older”, this is not a good plan to protect your loved ones. Things happen to people even if young and healthy.
If you have young kids it is definitely important to have a will so you can be sure everything goes to your kids or who ever you want if you are gone, at what age your child will get full control of the assets, who will controll the funds until they reach that age and who will be the guardian of your kids if both parents are gone.
If you make a will you can choose who you want to be guardians of your kids if you and the other parent are gone. This is important otherwise someone who you do not want to raise your child could be the one who applies to be guardian and is approved by the court. You also can dictate at what age your child will get what ever assets are left to them. If you do not have a will and you have a child under 18 the money may go into the registry of the court were it will earn a very minimal amout and is hard to access when needed. Then when they turn 18 they get what ever is there to use how ever they want to spend it. If you have a will you can have a trust setup to hold the assets and you choose the person to be trustee. The trustee will be able to invest the money and will be able to give money to your child as needed.
It is also very important to have a will if you have children from a previous relationship. With no will it can get very complicated and the person you are currently married to could get cut out of assets you may want them to have. It requires more time in court which is more money your estate must pay. The heirs must be determined and the percentage to each heir is determined by statute, not by you. If you have separate real property that property may go to your child, even if a child of your current spouse. Your spouse may have to put up a bond and do annual accountings until the child turns 18. This can cause more expense and be more time consuming in a situation that is already difficult for the surviving spouse.
No matter your age it is wise to have powers of attorney. Medical POA will give the person you designate the ability to make decisions about your medical care if you are incapacitated. This is important as you get to choose the person who will make decisions. The financial POA is also important and very powerful. The person designated can basically do anything you could do if you were able. It is important that you make the financial POA effective only upon disability unless there is some specific need, and it should be limited to only that need. If you do not have these documents and become incapacitated then someone will mostly likely have to file for guardianship, which can get very expensive and is very restrictive.
If you have children who are 18 or older and they go off to college it is important to get them to sign a medical power of attorney. Even if you still pay 100% of their bills, the hospital or other medical providers will not give you any information or let you make a decision. If your child who is 18 or older was away somewhere and has an accident and they end up incapacitated and unable to communicate, the Dr or other medical personnel will not be able to give you any information about them without a medical power of attorney due to HIPPA laws. It is already a scary situation that can be made worse by not being able to get information or make decisions.
There is also a newer document that is a “Transfer on Death Deed”. This is a deed that is drafted, signed and filed while you are still alive. The document only becomes effective if on file when you die. It is also revokable so if you change your mind on who the property should go to upon your death, you can revoke it. If revoked prior to your death then it does nothing. This document is great to transfer interest to a spouse upon your death so they do not need to probate to have the property in their name. It also works well to transfer to children upon death of the last parent without the need for probate.
These are several things to consider to make things easier on your loved ones when you die. It is hard enough losing the ones we love, and the emotional hardship of the loss can be magnified if they do not have the documents in place to take care of the finances and property.