3 by 23 & 5 by 55: Important Documents for YOUR Life
It may seem confusing when attorneys start listing the important estate planning documents you should have, but there’s an easy way to remember what you need and when… 3 by 23 and 5 by 55.
3 x 23
Did you know that at age 18, parents no longer have the ability to make decisions for their now adult children? If a medical situation arises, parents need a Power of Attorney to make decisions and a HIPAA release to get information from the medical team. Before sending your young adult (ages 18-23) to college, make sure these three documents have been properly drafted, signed and in place.
- Durable Power of Attorney for Health Care (DPHC)
This directive allows an individual to name a decision-maker for a time in the future when the individual cannot make his or her own decisions. The “Principal” is the one creating the document. The “Agent” is the decision maker.
- Durable Power of Attorney for Property (DPP)
This directive allows the decision maker’s “Agent” to make financial and property decisions in the event the “Principal” is unable to make or communicate those decisions for himself or herself.
- Health Insurance Portability & Accountability Act (HIPPA Release)
The HIPAA Release identifies all of the people who can access information from the doctor, not just the “Agent” under the Power of Attorney for Health Care. Due to significant penalties for violating HIPAA, our firm strongly recommends adding HIPAA authority when possible in the DPHC and also in a separate release for added flexibility.
5 x 55
And what about you? Whether you’re just starting your family and career, or are starting to think about retirement, now is a good time to get all of your important documents created or updated. In addition to the Powers of Attorney and HIPPA Release, there are two more documents that should be firmly in place by age 55.
- Last Will and Testament
Make your wishes known by distributing personal effects and financial assets for the benefit of your spouse, children, or other beneficiaries, and by naming guardians for minor or disabled children. The Will designates beneficiaries and names the executor to carry out your wishes. Having a Will helps ensure that your assets are distributed according to your plan rather than the default plan that the politicians created.
- Revocable Trust
This document, which works in conjunction with your Will, provides a means for continuity of ownership and management of your assets during lifetime, disability, and death. This type of trust can be changed while you have mental capacity to understand the terms of your document. This component in planning also helps to avoid probate and protect your beneficiaries’ inheritance from creditors.
It is important to remember that all documents are not created equal. If your estate is large or complex, or your wishes very specific, it is vital that you sit down and discuss your goals with an elder law attorney, who will be able to draft your documents to meet your unique needs.
Contact a certified elder law attorney(*), such as Linda Strohschein and her team at Strohschein Law Group, for assistance with creating an estate plan that meets your unique needs. To set up an appointment, contact Strohschein Law Group at 630-377-3241.
This information provided by Strohschein Law Group is general in nature and is not intended to be legal advice, nor does it constitute a legal relationship. Please consult an attorney for advice regarding your individual situation.
(*) The Supreme Court of Illinois does not recognize certifications of specialties in the practice of law and the CELA designation is not a requirement to practice law in Illinois.