The 4 documents everyone should have in place.
By Catherine West Olivetti and Alisa L. McCray
Estate planning is the process of making decisions and executing legal documents that address your medical and physical care desires during your lifetime and the distribution of your assets upon your death. Many people believe that having an estate plan is only for “wealthy” people, but if you are able to read this article, you would probably like a say in who controls your income and assets and how your medical care is implemented if you were to become unable to make these decisions for yourself.
We are often asked what documents constitute a basic estate plan. In South Carolina, there are four documents that everyone should have: a Last Will and Testament (“Will”), a Durable Power of Attorney, a Health Care Power of Attorney, and a Living Will.
- A Will is a legal document that states how and to whom your property will pass at your death. It only becomes effective after your death. This document ideally names an executor (called a “Personal Representative” in SC), waives the requirement for that person to post bond, and gives that person the ability to sell property, close bank accounts, and generally administer your estate. We should note that many assets do not generally pass subject to the terms of your Will, such as jointly titled property and bank accounts, life insurance, annuities, and IRAs, 401(k)s, and other retirement accounts.
- A Durable Power of Attorney is a legal document that allows you to appoint an agent who will have authority to manage your finances and care if you become unable to do so. In SC, we have special execution and recording requirements for these documents, and our legislature has put forth specific language that must be in the document in order for banking institutions here to rely upon it. If you become incapacitated, and you do not have this document in place, someone will have to petition the local probate court to take control of your assets.
- The SC Health Care Power of Attorney and Living Will are our state’s “advance directive” for health care. Under these documents, you can appoint an Agent to make health care decisions for you if you are unable to do so. You also have the power to make end of life decisions in the event you become terminally ill or permanently unconscious.
It is important to understand how the documents will work specifically with your assets and family structure. For this reason, we strongly recommend a holistic approach to estate planning that uses these legal documents as a starting point for creating a practical plan for you and your family.
Catherine West Olivetti and Alisa L. McCray are attorneys at Olivetti, McCray & Withrow.