Four essential documents that could save your financial life

Many people have no desire to talk about "what if" when it comes to their finances.

That's because they're often too busy figuring out what to do with their money right now. The reality is we can't live forever and, in some cases, we won't even be able to live the way we have in the past, due to chronic illness, injury or other unexpected events.

A shocking health scare showed me first-hand the importance of preparing for life's dramatic turns. In the fall of 2016, I spent a month in the hospital recovering from emergency brain surgery — and there were four documents that were essential in identifying who would make some very critical decisions for me.

Everyone should have a will.

A last will and testament spells out whom you want to give your assets to after you die. For parents of minor children, a will allows you to name a guardian. You can specify who will take care of your kids and help them manage their day-to-day activities should an unexpected event happen to you.

As a mother of an 11- and a 14-year-old at the time, it was comforting to know that my husband was there for them, as well as my sister, who is named as their guardian in our wills.

Making sure your rent, mortgage or other bills are paid is impossible if you are lying in a hospital bed or recovering from a serious injury.

You can draft a legal document that assigns someone else that task.

A durable power of attorney allows someone (in my situation, it was my husband) to step in and make financial decisions, including making sure bills are paid. You can name your spouse, another family member or a friend. You can also choose an alternate in case the person you choose is unable or unavailable to fill the role.

A health-care power of attorney or "health-care proxy" identifies the person who will step in and make decisions about your medical needs when you can't make them for yourself, from the emergency room to ongoing hospital care, rehabilitation and outpatient visits.

My husband, who is my primary health-care proxy, and my sister, who is named as the alternate, discussed with each other and my doctors the steps needed to help ensure my recovery.

A living will is not a substitute for a last will and testament.

In some states, it's called an "advanced directive" for medical decisions. It's a written document that lets you express your wishes for medical treatments you would or would not want to be used to keep you alive, including resuscitation and intubation.

The person you identify as your health-care proxy must abide by what you have spelled out in your living will. I remember asking my sister shortly after my surgery to contact my estate-planning attorney, who drafted all of these documents for me.

I wanted to make sure my family knew that I had a living will and had already decided how I wanted to handle difficult and emotional end-of-life decisions.

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You can go online to find the forms to create these documents on your own, but I'm not a fan of doing it that way.

If the documents are challenged, you want to make sure you have an attorney who is in your corner. The best way to find a good lawyer is to ask family, friends, colleagues or your financial advisor.

Then interview a few attorneys to get quotes on pricing so you know what you're paying up front. That's what I did — and I am so grateful that I found a good lawyer and had the essential documents in place.

CHECK OUT: 3 mental shifts that can help you save money for a home via Grow with Acorns+CNBC.

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