People might assume that they do not need an estate plan if they do not have substantial assets. However, naming people you want to make decisions on your behalf is a critical component of any estate plan.
In fact, every adult can benefit from naming the parties they want to make decisions for them if they are incapacitated.
Types of decision-makers
Whether you get sick and cannot express yourself or pass away, surrogates will need to make decisions regarding your care, final wishes and distribution of your estate. Proxies can be in roles including:
- Powers of attorney
- Health care surrogate
- An executor or personal representative
Depending on your needs, these parties will have the authority to make financial, medical and personal decisions for you. They can determine where you receive care, whether to sell your home and even who is allowed to visit you.
What happens if you do not appoint them
If you do not name people in these roles, the determination will be in the courts’ hands. They comply with state laws that lay out a hierarchy for these rulings, which may not align with your wishes and circumstances.
For instance, people you do not trust or even know that well could petition the courts for decision-making rights. Estranged family members could be brought back into the picture. Non-relatives with whom you are close may have no legal standing to manage your care or finances, even though they might know better than anyone what you would want.
For all these reasons, leaving these appointments in the hands of strangers can be a risk you and your family would rather not take.
Notifying your proxies
Once you appoint people into a decision-making role, it can be wise to discuss this with them. Talk about why you chose them and what you want them to do if they ultimately need to make decisions for you. Doing so minimizes confusion and allows them to ask questions or turn down the role if they wish to do so.
It might be uncomfortable to think about substitute decision-makers or talk about this topic with your family. However, taking the time to do this now can minimize the risk of personal and legal disputes in the future.