Many of our clients in the Greensboro, North Carolina area can get confused by some commonly misunderstood estate planning terms. This is entirely understandable and normal. Estate planning is not a field a lot of people have experience in, nor is it the most exciting topic in the world. These misunderstood ideas and terms are common with many people, and you shouldn’t feel bad for believing them. Today we are going to take a look at several misunderstood estate planning terms so you can better understand what they actually mean.
Commonly Misunderstood Estate Planning Terms: The Living Will
It isn’t uncommon for people to ask estate planning attorneys if they need a living will or a last will, or if they can use a living will instead of a last will. While these questions seem natural, they reflect a basic misunderstanding of these two vital estate planning tools.
A living will is not, as its name implies, related to a last will and testament. In fact, the two tools address completely separate issues. A living will, a type of advance medical directive, is a document in which you state your medical choices. Should you ever lose your ability to communicate or make choices, your living will stands in for you and tells your health care providers what you want.
On the other hand, your will, also known as a last will and testament, has nothing to do with medical choices. A will only comes into the picture after you die and it comes time to distribute your property.
You can’t use your will to express medical choices, nor can you use your living will to control what happens to you property after you die. If you want a complete estate plan, you need both tools.
Commonly Misunderstood Estate Planning Terms: The Advance Directive
Since we’re talking about living wills, we might as well talk about advance directives. Many people refer to advance directives as “advanced” directives, implying that they’re somehow more complicated or intricate than other directives. This is not true. These documents are called ‘advance’ directives because you make them in advance of becoming incapacitated. They are not complicated or ‘advanced’ in any way, other than that they have specific legal requirements you must meet if you want to create them.
Commonly Misunderstood Estate Planning Terms: The Power of Attorney
A power of attorney is another commonly misunderstood estate planning term primarily because of its name. A power of attorney is a document, and one that has almost nothing to do with attorneys or lawyers. A power of attorney is simply a document that allows someone else to act as your representative and make decisions for you. You don’t have to be a lawyer to use or act under a power of attorney.