INDIANAPOLIS (WTHR) — In the news, each day we tend to cover tragic and often unexpected events that impact people's lives, sometimes permanently. That’s why if you’re an adult, it can be so vital to draft legal documents to make sure your wishes are carried out in case something happens.
It's important to have certain binding legal documents in place if you become disabled due to an illness or accident. These aren't easy things to talk about, but attorney's say every adult needs them. There are five key documents involved in estate planning.
Shawn Scott, an Indianapolis attorney, said these are the top five:
1. General Durable Power of Attorney
This document outlines who you want to make decisions if you can't make them for yourself. We're talking your money, your property and your bank accounts. Otherwise, your family may have to petition the government to become your legal guardian. That can be time consuming and costly. However, if you have it, the document allows your designated adult to do things for you: "get your mortgage paid, your rent paid, your bills paid so, you've really allowed someone to step in your place, handle your business and financial affairs for you, when you can't do it for yourself," Scott said.
2. Health Care Power of Attorney
In the case you can't make your own health care decisions, you need to have someone you trust like family members or friends. This would typically be an emergency scenario where you aren’t able to tell your doctor what you want. Instead, health care providers will follow Indiana law. “The state of Indiana is always going to have a fall back. They've made a plan for you, if you don't have one for yourself. But you don't have a say over who that person is," Scott said.
3. Living Will
In this document, you’ll declare your wishes for end-of-life care. If you have an incurable injury, disease or illness, this document details your wishes as far as life support. "You want to make sure that your family members and your physicians know when you can't have that voice, how you want your end-of-life care to be,” Scott said.
It's important to note that a living will is technically different than a will.
4. Will
A will essentially states: when I die, here's what I want to happen. This lays out who will get your assets, your money, property, any items you posses after your death. If you don’t have this in place, the state of Indiana has its own plan, and it may not be what you want.
"It's just best to put a will in place, so you can say here's what I have here's who I want to give it to and these are the terms in which I want to give it to them," Scott added.
5. Revocable Living Trust
This is especially important if you're a parent with young children under the age of 18 and want your assets passed down properly to your children, in the event you die. In Indiana, if children are under 18, legally they're minors and can't receive assets and a trust can help coordinate that.
"They can have their assets over time, so that their guardian, if you're not living, can pull money from the trust for their health, for their education, for their general needs as needed at appropriate times. Then they get the money when they're adults,” Scott said.
There may be a stigma that only people who are wealthy need a trust, but that's not necessarily true. There's not a certain amount of assets to qualify for a living trust, it just helps take care of your children financially if something were to happen to you. Scott said it could cost anywhere from $500 to $2,000 dollars or more to get this done by an attorney depending on the complexity and time it takes to draft them. It could take a couple hours of your time, too. But it may save you money in the long run.
A lot of people may opt to use an online attorney service like Legal Zoom, but Smith said to be careful: “even if you've made the best effort, and you think you've reflected everything you want in this document that you've created online with some help with software, it may fail to be valid." Scott said documents aren't legally binding if you just write them down. They need to be drafted by a lawyer, and often time need to be notarized.