The essentials of any estate plan are a will, durable power of attorney, health care power of attorney, and advance directive (also known as a living will). If you fail to create an estate plan, North Carolina law will determine who will make decisions on your behalf if you are incapacitated during your life, and who will get your assets after your death.
A will tells your executor how you want your assets distributed after your death. Wills can be very simple, or quite complex. Some examples of what a will can do for you include:
- Name a guardian for your minor child(ren)
- Ensure that particular possessions go to the person you wish to receive them
- Protect an heir from losing their inheritance, whether it’s because of their disability, substance abuse problem, inability to manage money, or because someone in their life might take advantage of them
- Name your executor (the person best able to follow your instructions)
- Provide for contingencies, for example, naming a beneficiary in the event your primary beneficiary dies before you do
A durable power of attorney is important if you become incapacitated. It allows the person you name (your agent) to handle your legal and financial affairs. If something happens to you, your bank won’t allow just anyone to access your accounts. If something happens to you and you don’t have a durable power of attorney, your loved ones would have to obtain a guardianship over you to handle your affairs – which is a more time-consuming and expensive process.
A health care power of attorney allows your agent to make your health care decisions if you are incapacitated. This prevents disputes within your family about how to care for you, and helps your loved ones know whether you want to have or withhold life-prolonging measures, be buried or cremated, or otherwise handle your health care decisions when you’re not able to make them yourself.
An advance directive (also known as a living will) is an instruction to your health care providers at the end of your life. This is particularly important if you have strong views about receiving or withholding life-prolonging measures, such as artificial nutrition or hydration.