Wills: The most basic estate planning involves drafting and executing a Last Will and Testament. Anyone over the age of 18, and of sound and disposing mind, may execute a Will, the provisions of which provide directions after your death for: (1) How your property should be divided/distributed; (2) Who should have guardianship over your minor children; and possibly (3) Funeral arrangements. If you die without leaving a valid Will, your estate will be distributed according to your state's intestacy laws (typically to your spouse and/or children, if any; otherwise to relatives in order of their level of kinship to you). Although it is not necessary to hire an attorney to draft your Will, it is certainly advisable for a couple important reasons: First, if the instrument is not carefully drafted, unintended consequences can result. Form Wills that can be purchased online or in book stores might be perfectly acceptable to a Probate Judge, but their provisions will not have been tailored to your particular wishes and needs. Second, there are very specific legal requirements for executing a Will and the result of failing to satisfy these requirements is rejection of the Will in its entirety (it will not be accepted by Probate Court and your estate will pass according to relevant intestacy laws, not according to your wishes).
Trusts: Contrary to popular belief, trusts are not just for extremely wealthy individuals and families - although they are common among affluent families, there is no net worth requirement for creating a trust. A simple revocable trust might function almost identically to a will insofar as it allows the individual creating the trust (grantor) to exercise full control over the trust property while he/she is living and then directs a third person (trustee) to distribute the trust property to named beneficiaries at some point in the future (typically upon the grantor's death, or when the beneficiaries reach a certain age). Trusts are typically more expensive and complicated to set up than most wills, but their advantages make the additional expense and effort worthwhile. Trusts are effective as soon as they are executed and funded; they generally do not require court involvement or oversight; they allow the grantor greater control over how property is distributed or applied both before and after his/her death; and trust property is not subject to probate. The key to a trust is in the funding - assets need to be re-titled in the name of the trust. Also, it will be necessary to execute what is commonly referred to as a "pour-over will" to catch any assets that, for whatever reason, were not held by the trust at the time of the grantor's death, and pour those assets over into the trust.
DURABLE POWER OF ATTORNEY: Powers of Attorney are instruments that bestow certain authority in individuals designated as your attorney(s)-in-fact or agent(s). A General Power of Attorney, for example, might be used to give a close family friend the power to negotiate and consummate the sale of real estate when the owners have moved out of state. A GPOA terminates when the reason for its execution has been satisfied (e.g. sale of the house) or when the person who granted the power becomes disabled or incapacitated. A Durable Power of Attorney, on the other hand, is typically broader in scope (i.e. it gives authority to do any and all things you would be able to do, not just the authority to sell a house), and does not terminate upon disability/incapacity. Indeed, DPOAs usually do not even become effective to bestow any authority in an attorney-in-fact until you are disabled/incapacitated and therefore unable to manage your own affairs, and will usually terminate only upon the death of or revocation by the grantor. If you do not have a DPOA and it becomes necessary for someone else to manage your affairs, it is possible that a GUARDIANSHIP or CONSERVATORSHIP might be established. A well-drafted DPOA minimizes the risk of such adversarial proceedings.
LIVING WILL: Sometimes referred to as an "Advance Health Care Directive," a living will expresses your desire to have certain medical treatments and/or procedures either administered or withheld if you are in a terminal condition. A typical living will directs your attending physician to administer only those medications that are necessary to alleviate pain and suffering in your final hours, and withhold life-sustaining treatments such as forced nourishment and artificial respiration. A living will can be tailored to your particular situation. Although nobody wants to face his/her own mortality, It is important to at least consider executing a living will now, while you are healthy, because when the time comes for its provisions to be honored, you will not be in a position to make those decisions. Having a living will also reduces the burden on loved ones who might otherwise be forced to make decisions about when to cease efforts to prolong your life.
DURABLE HEALTHCARE POWER OF ATTORNEY ("HEALTH CARE PROXY"): As its name suggests, a Durable Healthcare Power of Attorney ("HCP") is similar to other DPOAs insofar as it bestows decision-making authority in a designated agent. But the HCP is not as broad as a regular DPOA - it is intended to give your agent (called a "health care proxy") authority to make health care decisions on your behalf, not manage your financial affairs. An HCP is usually coupled with a Living Will and directs your attending physician to follow the directions of your health care proxy, except in situations where your living will should be given priority. Again, a well-drafted HCP can minimize the risk of a GUARDIANSHIP proceeding. Statutory language in most states provides some basic guidance in drafting, but you should speak to an attorney about meeting your particular needs and wishes.
*Guardianships and Conservatorships are potential risks of not having previously executed a durable power of attorney. Through adversarial proceedings, a court may appoint a guardian of the person and/or estate (conservatorship is limited to the estate) to look after a "ward." It is, essentially, an involuntary loss of freedom. Hearings can be hurtful, messy, and expensive. After the guardianship or conservatorship is established, the guardian/conservator will be subject to continuing court supervision - he/she will have to make annual reports to the court regarding the ward's finances and well-being.