If you have children, it is critical to have estate planning documents. This article is my idea of a “Crash Course” in Parents Estate Planning. Please use this quick read as a motivational tool to prepare or review your own documents. The basic estate plan consists of 4 basic cornerstones.
1)Durable power of attorney A durable power of attorney (DPOA) can help protect your property in the event you become physically unable or mentally incompetent to handle financial matters. If no one is ready to look after your financial affairs when you can't, your property may be wasted, abused, or lost. A DPOA allows you to authorize someone else to act on your behalf, so he or she can do things like pay everyday expenses, collect benefits, watch over your investments, and file taxes.
2)Advanced medical directives With today's technology,physicians can sustain you for days and weeks (if not months or even years). There are two basic documents within your Medical Directives.;
1) A “Living will” allows you to approve or decline certain types of medical care, even if you will die as a result of that choice. In most states, living wills take effect only under certain circumstances, such as terminal injury or illness. Generally, one can be used only to decline medical treatment that "serves only to postpone the moment of death.
2) A “health- care proxy” allows you to appoint a representative to make medical decisions for you. You decide how much power your representative will or won't have.
3)Will A will is often said to be the cornerstone of any estate plan. The main purpose of a will is to disburse property to heirs after your death. If you don't leave a will, disbursements will be made according to state law, which might not be what you would want. Furthermore, without a will, some states dictate that at your death some of your property goes to your children and not to your spouse. If minor children inherit directly, the surviving parent will need court permission to manage the money for them. You may also want to consult an attorney about establishing a trust to manage your children's assets in the event that both you and your spouse die at the same time. Certainly, you will also need life insurance. Your surviving spouse may not be able to support the family on his or her own and may need to replace your earnings to maintain the family.
4)Letter of instruction A letter of instruction (also called a testamentary letter or side letter) is an informal, nonlegal document that generally accompanies your will and is used to express your personal thoughts and directions regarding what is in the will (or about other things, such as your burial wishes or where to locate other documents). This can be the most helpful document you leave for your family members and your executor. Unlike your will, a letter of instruction remains private. Therefore, it is an opportunity to say the things you would rather not make public.
Certainly, you will also need life insurance. But we will discuss that another day!
• Ossining resident Michael Salmon is a Senior Financial Advisor with Ameriprise Financial in Midtown Manhattan. Michael Specializes in Investment Portfolio Management, Retirement Planning Strategies, Estate Planning Strategies, Saving for Education Michael is an active public speaker and financial columnist. You can reach Michael at (646) 964-9470 or email This e-mail address is being protected from spambots. You need JavaScript enabled to view it .
