Do you have your estate in order? Whatever your age, financial status, or health, there are a few key documents that are important to have in place. Here’s what they are, and what they do to protect you and your heirs:

Durable power of attorney

A durable power of attorney (DPOA) can help protect your assets in the event you become physically unable or mentally incompetent to handle financial matters.

How it works:

A DPOA allows you to authorize someone else to act on your behalf, so he or she can do things like pay everyday expenses, collect benefits, watch over your investments, and file taxes. DPOAs can become effective immediately (for instance if you’re undergoing a serious operation or become seriously ill), or can become effective only if you actually become incapacitated.

Advanced medical directive

Advanced medical directives let others know what medical treatment you would want — or allows someone to make medical decisions for you — in the event you can't express your wishes yourself. Without this, medical care providers must do all they can to prolong your life, even by artificial means.

How it works:
There are three types of advanced medical directives. To be in keeping with your wishes, you may need one or all:

• A living will allows you to approve or decline certain types of medical care. These usually take effect only under certain circumstances, such as terminal injury or illness. Generally, one can be used only to decline medical treatment that "serves only to postpone the moment of death."
• A durable power of attorney for health care lets you appoint someone to make medical decisions for you. You decide how much power your representative will or won't have.
• A Do Not Resuscitate order (DNR) is a doctor's order that tells medical personnel not to perform CPR if you go into cardiac arrest.
   

Will
A will is perhaps the most important part of any estate plan, ensuring that others can carry out your wishes regarding assets and dependents.
 

How it works:

A will helps ensure that property is disbursed appropriately to your heirs. Without a will, this will be done according to state laws.

Additionally, a will allows you to name a representative (the executor) to manage and settle your estate. You can also name a legal guardian for minor children or dependents with special needs.

Because a will is a legal document, courts rarely overturn any provisions that are in it. So it’s important to keep it up to date, and make sure it’s written in accordance with state laws.

Letter of instruction
A letter of instruction is not a legally binding document, but does accompany your will.

How it works:
This type of letter allows you to provide informal, personal thoughts and directions regarding your will. It’s a good place to leave private thoughts about your decisions, knowing that those you address may or may not follow any instructions you offer.

Living trust

A living trust is a separate legal entity that you create to own property, such as your home or investments. It functions while you’re still alive.

How it works:
Property — from your home to your stock portfolio — that is placed in a living trust can be distributed without going through the state probate process. Probate can slow down distributions, preventing access to funds and other assets that may be needed by your family in the event of your untimely death.

You control the property in the trust, and can change trust terms, transfer property in and out of it, or end it completely, whenever you wish.

While a living trust transfers property in a similar manner to a will, you should still have a will in place as well to address certain needs. For instance, only a will can name an executor or guardian for minor children.

Are you prepared?

To ensure that you have the right financial and legal documents in place, consult with your attorney and financial advisor. Not sure where to start? An expert advisor from Horizon Bank will be happy to help. We can review your financial and personal situation, provide Sensible Advice for estate planning, and help guide you in the right direction for other specialized assistance you may need.
 

If you have any questions, stop by your local Horizon Bank branch, or call 888-873-2640.