Having a Last Will and Testament, Healthcare Directive and Power of Attorney in order is very important and without them a family can be placed in situations that require hard decisions to be made on behalf of their loved one.
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Estate Planning: 3 Legal Documents Your Elderly Parents Need
Estate Planning can be a tough subject to discuss with your parents as it focuses around a time when they could be in a hospital or nursing home and unable to make decisions for themselves or have passed away.
However having these estate planning documents in order can protect their assets, finances and communicate their desired wishes. Below are 3 important estate planning documents that your parents should have and kept updated.
1. Last Will and Testament
A Last Will and Testament allows your loved one to specify how they would like their property and assets divided. An Executor is appointed to file the will at the probate court, pay off any debts and distribute gifts in accordance to the will.
Special gifts such as family heirlooms can be given to specific people called Beneficiaries. The Residue of Estate is what is left once all the debts are paid and gifts are given. Loved ones can be selected to receive a portion of the estate as well as given a gift.
2. Healthcare Directive
A Healthcare Directive includes a Living Will and Medical Power of Attorney. These two documents allow healthcare treatments to be clearly specified and a trusted person to be appointed to make medical decisions on your parent’s behalf.
If your parent is ever hospitalized and unable to communicate their medical wishes, these documents are crucial to have as they outline your parent’s decision on various medical care.
3. Power of Attorney
A Power of Attorney allows you to appoint a person to act on your parents behalf in regards to their legal and financial affairs. You can select a General, Specific, Ordinary or Durable Power of Attorney.
- General Power of Attorney – This document allows your parents to select a representative to manage their finances and property. The representative will have general authority.
- Specific Power of Attorney- This document allows the representative to have power over certain decisions and their role more clearly defined to a specific task such as selling property.
- Ordinary Power of Attorney– This document is only valid when your parent is capable of still making their own decisions. If they are ever unable to act or respond for themselves then the document would no longer be in effect and the representative cannot make any decisions on behalf of your parent.
- Durable Power of Attorney– If your parent is unable to make their own decisions or is unresponsive, the documents allows the representative to still make and carry out decisions on their behalf.