A will, powers of attorney, and a health care directive

How it works

Without a will, state intestacy law divides property among relatives in a fixed order, and a court picks a guardian for minor children. A will names an executor, heirs, and a guardian, and it covers only property that does not pass by beneficiary form or joint title. A durable financial power of attorney lets a named agent pay bills, file taxes, and manage accounts if the person cannot, and it ends at death. A health care power of attorney names a medical decision maker, and a living will states wishes about life support, which together are often called an advance directive. Each is signed under state formalities, usually with witnesses or a notary. Without a power of attorney, a family must ask a court for a guardianship or conservatorship, which is slow and public.

What it gives

A will puts the choice of guardian for children in the parent's hands instead of a court's.

A power of attorney lets bills and taxes be handled during an illness without a court case.

A directive spares a family from guessing about medical wishes.

What it costs, or where the catch is

Documents must be redone after moves, marriages, divorces, and births, and many are years out of date.

A will does not avoid probate, and in some states probate is slow and costly.

A power of attorney can be misused by the agent, so the choice of person carries weight.

A worked example

Astrid and Pavel have two young children and a $400,000 home. Without a will, their state's law would split the estate between the children in a court supervised account and leave the guardian choice to a judge. They sign wills naming Astrid's sister as guardian and a trust for the children until age 25, powers of attorney naming each other, and health care directives. When Pavel is hospitalized for two months, Astrid pays the mortgage from his account under the power of attorney with no court involved.

Where it goes wrong

The common miss is parents who talk about who would raise the children and never sign anything, which leaves the decision to a court.

Who confirms it for you

For your own numbers, an attorney. This page explains how the rule works for people in general; it does not know your situation and does not tell you what to do.

The official source

USA.gov: Preparing for end of life and estate planning. Every figure that changes by year comes from the site's rules table, which the watcher checks against the official page on a schedule; where a figure is not yet verified, this page says so instead of printing a number.