The two sides of estate planning

There are two sides of estate planning, both of which need to be covered off when you sit down to prepare your documents.

One side represents what you know for sure is going to happen one day; you are going to pass away. You plan for this eventuality by preparing a Will and perhaps other documents such as trusts, or business succession plans. By doing so, you leave instructions for what other people should do on your behalf once youare gone.

The second side represents what you don't know for sure will happen, but that might happen; you might lose your mental capacity due to illness, injury or the ageing process. You plan to address this by preparing an Enduring Power of Attorney, which deals with finances and property, and a Personal Directive, which deals with health care and personal decisions. These are the documents that leave instructions for what others should do on your behalf.

Most estate-planning lawyers will urge you to have all three documents (Will, Enduring Power of Attorney and Personal Directive) prepared so that you have covered off all eventualities. If you have top-notch documents, you will have given the best instructions and guidance possible under the circumstances and will have done all that you can to relieve your family members of the burden of trying to decide what is right for you.

I find that some people already know they need a Will but are skeptical about needing the other two documents. Don't underestimate the need for an Enduring Power of Attorney if you own a home (even if it's in joint names with your spouse), own a cabin, own a business or have any ongoing financial arrangements such as funding college tuition for one of your children.

Also, make sure that you maintain as much control as possible over future personal decisions such as whether you live in long term care, in which facility you will live, which doctors you will see, etc, by making a Personal Directive or co-decision making document. Remember that if you do no planning at all, you will perhaps have no say in any of these decisions once you have lost capacity.

Estate planning answers all of the "what if" questions. On one hand there questions such as:

• what if I die before my spouse?
• what if my spouse dies before me?
• what if I die while my children are still minors?

And on the other hand there are questions such as:

• what if I lose my ability to look after myself?
• what if my spouse loses his/her ability to make decisions?

You should address all of these when you meet with your estate planning lawyer. And you'll notice that the lawyer will come up with plenty more "what ifs" during the meeting!