A power of attorney is a document in which one individual (the “principal”) grants another individual (the “agent”) the authority to act on his behalf, many times according to a specific list of directions. 

When it comes to medical decisions, a durable power of attorney, permits the agent to make medical decisions relating to treatment on behalf of the principal and, properly drafted, it allows the agent access to the principal’s important medical records which may be necessary to consider when determining a course of treatment. 

Without a valid durable power of attorney for healthcare in place, medical personnel have no obligation to follow anyone’s wishes regarding treatment or consent except for the patient’s. However, with one, an agent is able to take any action which the principal would be permitted to take on his own behalf, ensuring that there is always a trusted individual that can make decisions for you. 

With a valid durable power of attorney for finances and property an agent should be able to access the principal’s bank accounts and financial records, pay rent, utilities and credit card bills, manage investments and loans and so on.

Without one, financial institutions like banks, utility providers or even landlords typically will not permit an individual that is not named on an account to access its funds or information. This means that if you are in the hospital for an extended period of time unable to act on your own

If you want to direct where your possessions will go if you die, then it’s important to have a will. 

If a person dies without one, state law determines how the assets will be distributed. That will mean less money and more stress for the heirs—an unpleasant prospect for family members already dealing with the tragic death of a young person. 

Additionally, laws may not mirror your choices, meaning that, while you may want everything to go to a significant other or close friend, it’s not going to pan out that way without writing it out in a will. 

A living will is a legal document that a person uses to make known his or her wishes regarding life prolonging medical treatments.

With a living will, you indicate which treatments you do or do not want applied to you in the event you either suffer from a terminal illness or are in a permanent vegetative state. For example, you may indicate whether the use of feeding tubes or other life-prolonging equipment should be continued, or whether, at a certain point should be discontinued if there is no chance of recovery. 

A living will does not become effective unless you are incapacitated; until then you'll be able to say what treatments you do or don't want.

Living trusts are tremendously beneficial in a number of situations, including when minor children are involved or when parents may wish to put restrictions around when and how an inheritance may be used. 

Living trusts help reduce the time and complexity of probate, meaning that your assets get into the hands of your beneficiaries quickly when you pass away. A trust also doubles as an asset management mechanism if you become incapacitated or can otherwise no longer manage your own affairs. 

Perhaps most importantly, living trusts are fully amendable and revocable during your life, so they offer ultimate flexibility.  While a good living trust is drafted in a way that it effectively accomplishes your goals no matter what life throws your way, they can be easily amended tomorrow or ten years from now if need be. 

There are a number of things that a will won’t pass along to beneficiaries, including retirement accounts, insurance policies and other financial instruments that are governed by separate contracts between you and the provider. 

In order to ensure that these items go to your chosen beneficiaries if you die, it’s important to review the beneficiary designations on each account or policy. 

If changes are necessary you should make sure to file a new beneficiary designation form with the company.