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financial literacy
Estate planning for everyone

2. Advance medical directives 
These include medical powers of attorney and living wills, as well as health care proxies.

Married couples may need these documents less, because doctors generally confer with spouses about medical decisions. But it's best to be on the safe side and get this paperwork done when you sit down to do your estate planning with an attorney.

The health care proxy or surrogate document names someone to provide informed consent regarding your medical treatment if you're not able to do so for yourself. Even though the family often does have a say, Gjertsen cautions clients that because of the relatively new Health Insurance Portability and Accountability Act, or HIPAA -- the privacy act for health care -- you won't know until it's too late whether an institution will let your family or spouse act on your behalf.

"But for a single individual, having a power of attorney for health care is imperative," says Gjertsen.

It's helpful to designate one person with whom you've had important conversations to act in your best interests -- especially when family members are at odds about your care.

"The Terry Schiavo case in Florida really brought to the front powers of attorney for health care and living wills and the like," says Gjertsen. "Who's going to decide about your health care if you cannot speak for yourself?"

3. Powers of attorney 
Unless you live on an island or are otherwise off the grid, it's smart to set up a power of attorney. If you become incapacitated, someone will need to act on your behalf to pay the mortgage and other bills.

"For medical decisions, doctors can always look toward significant others and family for advice, but because of financial institution rules, durable powers of attorney really are required," says attorney Peter Blatt, president of Blatt Financial Group in Palm Beach Gardens, Fla.

A durable power of attorney allows someone else to make financial decisions for you and to control all your assets outside of any trusts you have created. These assets include everything from IRAs to your house and the power includes the ability to sign off on a tax return, says Blatt.

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Most states have two types of powers of attorney. The first type is a durable power of attorney which becomes effective as soon as you sign it. The second type is called a springing power of attorney because it springs into effect when a person becomes incapacitated.

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