My wife and I became empty-nesters last year. It’s been a joyful time together, but the major life transition also brought important discussions. Now that our children are adults, we are adjusting family plans and revising important legal documents.
There is never a bad time to assess your legacy plans. If you need just the basics in place, you should start with these four documents as a minimum.
1. Last will and testament. This is a simple outline indicating how you want to distribute your assets upon your death. You name an executor to manage the disposition of your estate, including money, property, and other assets. A last will keeps the state from deciding what happens to your assets. You can also make special provisions to shelter assets for your surviving spouse, family heirs, or designated charities.
2. Financial power of attorney. This gives a person of your choosing the legal ability to handle financial matters on your behalf. While it is most often used should you become incapacitated it can also be arranged for a specific legal matter such as selling property.
3. Medical power of attorney. This gives a person you trust the legal ability to make medical decisions on your behalf if you are unable to communicate your wishes. It does not impact financial decisions and only takes effect if you are incapacitated.
4. Living will. This indicates your wishes for life-sustaining medical care. It is only used if you are incapacitated and is sometimes known as an “advance directive.”
These basic documents will provide peace of mind for both you and your family. You are able to ensure that your wishes are carried out on your incapacitation or death and your successors have clear instructions for those wishes. This is also an opportunity to have healthy conversations with adult family members about your priorities for a legacy of generosity. My wife and I were blessed to share our plans and hearts with our children, answer all of their questions, and encourage them to begin thinking of their own financial planning for down the road.