3. Prepare For The Unexpected
No matter your age, it makes sense to be prepared for the unexpected. Below are 3 the most important documents:
a) A will or a living trust and "pour-over" will combination
A will is an essential legal document that sets forth your wishes regarding the distribution of your property and the care of any minor children when you die. A pour-over will is established by an individual, often in conjunction with a trust. Upon the death of the individual, all or a portion of their assets can be transferred—or "poured over"—to a trust. By doing so, an individual can ensure that their estate has explicit directions on moving estate assets to a trust. Additionally, a properly structured pour-over may alleviate the burden of requiring the estate to undergo an often costly and lengthy public probate process.
b) A power of attorney
A power of attorney appoints an agent to act on your behalf regarding financial and other matters while you are alive. It can be a durable power of attorney, which takes effect immediately—or a springing power of attorney, which takes effect if you become incapacitated and unable to handle matters on your own.
c) A health care proxy
A health care proxy names a person, or persons, who can make health care decisions for you if you are unable to communicate or don't have the capacity to make decisions.
You may also want to draft an advance medical directive, also known as a "living will." In general, it outlines your wishes regarding life-prolonging medical treatments and may vary depending on your state of residence. It becomes effective only under the circumstances stated in the document.
Now, the final money topic that every couple should discuss.