Being an adult comes with a fair amount of responsibility. You have taxes to consider, as well as voting, getting a job and planning for your future. There are some documents that you need to think about creating as you age.
This planning for the future is something that a lot of young (and not-so-young) adults put off until later in life. They don’t see the need to have documents like a will or to put down in writing what care is desired should they become incapacitated.
The problem with thinking this way is that you never know when you’re going to need those documents. Life takes unexpected turns all the time.
To cover yourself and have peace of mind, these are the five documents that any adult should have in place.
A Will
Your will, also known as your last will and testament, is a document that states categorically how you want to inherit your assets when you die. This includes your money, your property, assets like jewelry and cars, businesses that you own, and any valuable intellectual property, such as any patents you might hold.
On the flip side, your will can also dictate how you wish any debt you have to be taken care of. This can protect those set to inherit, too.
Personal Property and Digital Assets Memorandum
In today’s world, we can break this down into two documents. One for digital assets and one for physical assets. However, let’s look at them as one. This document works in conjunction with a last will and testament. The idea is to clearly itemize your assets and who you wish to inherit them when you die.
Disputes over wills that are unclear can leave families in turmoil. With this memorandum, there should be no confusion over your wishes and no room for dispute by recipients (or non-recipients).
A Living Will
This document is similar to a standard will in that it dictates your wishes to others when you can’t speak for yourself. However, a living will is for when you are alive but no longer able to make decisions.
For example, a living will is activated if you fall into a coma or become incapacitated due to a mental illness. You can dictate what kind of treatments you want or don’t want, how long you should be kept on life support, and if doctors should attempt to resuscitate you.
Power of Attorney for Healthcare
This is very similar to a living will, but it covers you if the situation is more complex. A disease or injury that debilitates you slowly over time will need more flexibility than if you’re in an accident and it’s a case of keeping life support on or switching it off.
It’s advisable to only give one person power of attorney in this case, but have a backup or reserve name in case something happens to the first person.
Durable Power of Attorney
Now we come to the document that ensures your financials are taken care of if you’re incapacitated. With a durable power of attorney, you’re granting a trusted person the ability to manage your finances. They’ll ensure that bills get paid on time, there is enough money in your accounts for debit orders and that your tax returns get filed correctly and on time.
Important Points to Remember About Legal Documents
Legal documents like the ones on this list are not stagnant. They need to be carefully considered and adapted for every stage of your life. For example, the number of assets you have will likely change dramatically between the ages of 25 to 75.
As you go through life, your dependents may change. You could have children or marry someone with children and want to provide for them. You may also need to change your healthcare proxy if you get divorced, and you had previously listed your spouse.
Some Institutions May Require Their Own Forms Signed
This is particularly true with banks and other financial institutions. They will have their own power of attorney forms that need completing, and they may not accept a regular letter, even if it’s notarized by a lawyer or commissioner of oaths.
It’s important to check this with each institution you bank with, invest with, or do business with.
Another important point to check is if those forms ever expire.
Some institutions may only hold the forms for a certain period of years, and then require you to complete the form again. This may seem like an annoyance, but it’s also a good chance to consider who you’ve given power of attorney and if that is still a suitable candidate.
Write And Sign Documents As Soon As Possible
Finally, to avoid disputes, you should get to creating and signing these documents while you’re still considered of sound mind. A last will and testament, particularly, can be problematic if those set to inherit think that you may not have had your wits about you when the document was written and signed.
If you get to set these documents up early on in your life and then ensure you have a set schedule for monitoring and updating them, there is less chance of dispute down the line.
You can also have peace of mind that your wishes will be carried out and someone won’t question the documents when you’re not in a position to defend your decisions.
Documents as you age
It’s true that the younger you are, the fewer assets you’re likely to have. You may also still have your parents around to make decisions for you if you become incapacitated.
Yet you never know when things could change quickly. It’s incredibly important to have these documents in place and ensure that they’re updated regularly. Doing so not only ensures you’re looked after the way you choose, but it also assures you that those looking after you or who are left behind are looked after too.
