No. 1 – Wills
A will is a legal document that declares what you, the testator, want to be done with your estate after you pass away.
The will also states who the executor of the Estate is. The executor is responsible for paying any estate taxes or fees and handling any debts you may have left behind. The executor also is the person who will make sure your assets are divided as you desired.
If you die without a will, your estate will become intestate. This means your estate will be settled by Tennessee law. Under the law, if you were married without children, your spouse receives the entire estate. If you had children and were married, the estate is split between your spouse and children, depending on the size of the share. For example, if you have one child, the estate is split equally between your spouse and child. But if you have two children, your spouse only receives a third of the estate.
If the deceased did not have a spouse, the distribution goes as follows:
- The children, if there are any
- The parents, if they are still alive
- The siblings or the siblings’ children
- The grandparents
Intestacy laws do not consider any wishes you might have for your property or how your assets are distributed.
Whenever a major life change occurs, you should update your will or look into a trust. Examples:
- Getting married or divorced;
- Having a child or possibly a grandchild or adopting a child;
- The death of a family member or another beneficiary of your estate;
- The executor or guardian is unable to act as such;
- You want to name someone else as executor or guardian.
- Own property outside of Tennessee (trust)
- Concerned about having a mental or physical disability (trust)
- Have a large or complex estate (trust)
No. 2 – Living Will
A living will is a legal document that gives instructions on what to do and not to do if you become incapacitated and are unable to make these decisions.
In your living will, you may include:
- Life-Prolonging Medical Care
- Do Not Resuscitate
- Palliative Care
A living will is revocable at any time, regardless of mental state, if intentions are effectively communicated to the physician by written revocation, both dated and signed, or if the person makes an oral statement to the physician.
No. 3 – Durable Power of Attorney
A durable power of attorney is a legal tool that allows you to name an individual to make financial decisions on your behalf if you become incapacitated. This individual has the legal authority to see that your designated wishes are carried out.
The person you name your durable power of attorney will have access to cash, bank accounts, investments, family obligations, claims and litigations, Social Security payments, debt and bill payments, taxes, and retirement payments. That’s why it is imperative you name someone you can fully trust.
Top 10 Benefits of a Power of Attorney (POA)
- Ability to choose who will make decisions for you (rather than a court)
- Avoids the necessity of guardianship or conservatorship
- Provides family members a good opportunity to discuss wishes and desires
- The more comprehensive the POA, the better – things change
- Prevents questions about your intent
- Prevents delays in asset protection planning
- Protects the agent from claims of financial abuse
- Allows agent to talk to others on your behalf
- Allows agent to perform planning and transaction to make principal eligible for benefits
- Provides piece of mind for everyone
No. 4 – Power of Attorney for Health Care – Health Care Agent
In Tennessee, you also need an agent to make medical decisions on your behalf if you cannot. This individual becomes your health care agent. The agent can discuss with your doctors and family members what care you want or do not want to undergo for the amount of time you are incapacitated. If you get better and can make sound decisions, you become your health care agent again.
Sometimes known as your power of attorney for health care, the agent can view your medical records as well. You can appoint your own health care agent. However, if you become ill or incapacitated and have not named a health care agent, your doctor may name a family member your health care surrogate until you are well enough to make your own decisions.
Additional Resources: www.estatepalnning.com