While no one wants to think an emergency will strike, they happen to people every day. You could become ill or injured unexpectedly, or even die.
Yes, it’s hard to think of these things happening to you. But, the truth is, it happens to everyone eventually. That makes it wise to have specific documents in order, in case the unthinkable happens to you.
With that in mind, here are five emergency documents everyone should have right now.
1. Updated Will
A will is a legal document that dictates what should happen to your property and assets in the event of your death. It may also cover who will care for your minor children, if applicable.
Without a will, there is no instruction regarding how to handle your estate. This means your children may end up in the care of someone you wouldn’t prefer, or your property isn’t split up to your liking.
Ultimately, you need to update your will every time a major life change occurs. For example, a marriage or divorce means you need to make changes. New assets can also suggest an update is necessary. Otherwise, people may not act in the way you would like, or it could lead to infighting that tears your family apart.
2. Advance Directive
Advance directives, or living wills, provide instructions regarding your care if you are unable to care for yourself or make certain decisions. However, it only applies if you’re in a terminal state or likely to remain unconscious permanently.
It can outline which life-sustaining treatments you want, as well as the ones you don’t. Including organ and tissue donation requests is also smart.
Advance directives only cover medical care decisions, so no one can assume control over your property with this document alone. However, it is still important, as it ensures you only receive the treatments you want.
3. Medical POA
A medical power of attorney (POA) gives you the ability to designate a particular person to make medical decisions effectively in your name. However, it is only usable when you can’t make decisions for yourself, such as if you are in a coma.
Typically, it gives the person the ability to choose which treatments you receive as well as when care should be withdrawn. You can select anyone you want to act as your agent, though usually a family member is chosen.
You do want to communicate your preferences to your agent when you create the medical POA. This allows them to follow your wishes should the need arise. But, you do need to know that they don’t have to honor your requests. Under a medical POA, the decision is theirs.
4. Letter of Instruction
A letter of instruction focuses on the handling of your estate, giving your executor guidance about your wishes. While it holds no legal authority, it is still valuable, as you can include personal messages and preferences in the document.
For example, if you would like donations to go to a charity in lieu of flowers for your funeral, you can outline that in a letter of instruction. Personal notes to family members are also appropriate.
5. Life Insurance Policy
Life insurance policies provide funds upon your death. Often, these help with handling your estate, particularly debts, as well as final expense, such as funeral costs. The monies can also provide financial support to family members you leave behind, including spouses, children, aging parents, or any other beneficiary.
Ultimately, a life insurance policy relieves some of the financial burdens associated with your passing, ensuring your loved ones don’t have to scramble to find money during a time of hardship.
In some cases, collecting other documents for an emergency may be necessary. However, the ones above should be necessities for nearly every adult.
Looking for more from The Free Financial Advisor? Give these articles a try:
- What are the Responsibilities of a Power of Attorney
- Life Insurance: Why People Choose the Wrong Amount
- Financial Planning Series – Estate Planning