Estate planning involves making plans for the transfer of your estate after death. An estate is defined as all the property you own, which includes bank accounts, cash, jewelry, cars, houses, land, and investment accounts. The goal of estate planning is to make sure your estate is transferred to your beneficiaries, which are the people you want to receive your property upon your death. Three basic documents associated with estate planning are:
A Last Will and Testament is a legal document that provides the manner in which a person’s property will be distributed upon death. In Alabama, a Will must meet certain requirements to be considered valid. The Will must be written, must be signed by the maker, and witnessed by two people in the manner required by Alabama law. A Will should be written while the maker is in good health, of sound mind, and free from improper influences by other people. A person may change his or her Will as often as they desire, but the changes must meet the same requirements for an original Will. A properly written and executed Will is valid until it is changed or revoked. Generally, making a second Will revokes the first Will. People should consider changing their existing Will or writing a new Will if there is a change is their estate, a death of a beneficiary, or divorce that could affect the distribution of the estate. Once you have signed your Will, you should keep the original Will in a safe place such as a safe or a safety deposit box at a bank that can be opened by someone else upon your death.
A Durable Power of Attorney authorizes another person, called an “Agent”, to make decisions concerning your property for you. Your Agent will be able to make decisions and act with respect to your property (including your money) whether or not you are able to act for yourself. The meaning of authority over subjects is explained in the Alabama Uniform Power of Attorney Act. You should select someone you trust to serve as your Agent. The Agent is entitled to reimbursement of reasonable expenses and reasonable compensation unless you state otherwise in the Durable Power of Attorney. If you wish to name more than one agent, you may name a co-agent. Co-agents are not required to act together unless you include that requirement in the Durable Power of Attorney. If your Agent is unable or unwilling to act for you, your power of attorney will end unless you have named a successor agent. The Durable Power of Attorney becomes effective immediately unless you state otherwise in the document. Unless you specify otherwise in the Durable Power of Attorney, generally the Agent’s authority will continue until you die or revoke the power of attorney or the Agent resigns or is unable to act for you.
An Advance Directive for Health Care is used to make your wishes known about what medical treatment or other care you would or would not want if you become too sick to speak for yourself. You are also able to name a person called a health care proxy to make decisions for you if you become too sick to speak for yourself. If you do have an Advance Directive, be sure that your doctor, family and friends know you have one and know where to locate your Advance Directive. Generally, an Advance Directive provides your wishes regarding whether you wish to receive life sustaining treatment and artificially provided food and hydration (food and water through a tube or an IV) if you are terminally ill or injured or if you are permanently unconscious.
Terminally ill or injured is defined as when your doctor and another doctor decide that you have a condition that cannot be cured and that you will likely die in the near future from the condition. Permanent unconsciousness is when your doctor and another doctor agree that within a reasonable degree of medical certainty that you can no longer think, feel anything, knowingly move, or be aware of being alive. The doctors believe this condition will last indefinitely without hope for improvement and have watched you long enough to make that decision. Life sustaining treatment includes drugs, machines or other medical procedures that would keep you alive but would not cure you. Even if you choose not to have life sustaining treatment, you will still get medicines and treatments that ease your pain and keep you comfortable.