Is Estate Planning On Your New Year’s Resolution List?
Many people start the new year by setting goals for the year ahead. The beginning of the year is a great time to look ahead and plan for the future. Estate planning is one of those things that many, including me, have put off. I know, it’s so silly! But, it is very important to have just these three basics in place:
Durable Power of Attorney
Medical Directive
Will
Durable Power of Attorney
The Durable Power of Attorney, or “POA,” is an important document that allows someone to act in your stead. This document can come into play if you’re medically incapable, if you’re unable to act on your own behalf, or if you’re not in a place where it is easy to run your own affairs, like being in a foreign country or on a military assignment. Doing what I do, I see people who have temporary blips with their mental health and I see people in times of crisis when they really need someone to help them with items that require a POA.
We often work with people who have POA authority, just to advise them and to give them second opinions, as well. You may never need a POA, but you may need it when you don’t expect it. So, it is really important to have this document in place before you might need it. Power of attorney responsibilities can include management of bank accounts, payment of bills, the control of a business, management of investments, and tax filing. Taxes and other fees, like HOA payments, being missed can cause a lien and/or sale of a property. Even simple things, like opening your mail (it’s technically a crime for someone else to open your mail), getting veterinary care for your pet, and obtaining documents to get you a benefit might be difficult without a POA.
I own a small business, travel often, don’t have many joint accounts, and have an old dog, so I definitely need to get my butt in gear to do this for myself. And, if you also don’t have one, you should really think about getting this document created for you. It seems like you are giving up a lot of power to someone, but really, you are just giving them the ability to make sure your life is run in a way to best serve you while you are unable. So, the important thing is to just pick someone you trust to make good decisions. I will likely name my law firm as my successor agent, if a family member is unwilling or unable to serve, because I trust them. (Sorry, guys, you are really stuck with me for good.)
Medical Directive
A medical directive is very simple, it’s who will make medical decisions for you. It directs what wishes you would like to have made in some specific circumstances, and alternatives. If you are married, your spouse has a natural presumption to be that person, even if you are separated, but no divorce documents have been filed yet–scary thought. And, for many of us, that natural presumption is fine. But, some people just feel comfortable naming someone else. For instance, my brother is incredibly level-headed, and not overly emotional. So, while we are very different in some ways, we both think very similarly. We have always been a rock for each other. I also just want him to have certainty in delicate situations, so he doesn’t have the extreme burden of trying to figure out what I would want.
Will
Lastly, a will is just an instrument to direct what will happen with your property and assets if something should happen and you pass. It might sound a little morbid or overwhelming, but in most cases, it is pretty simple. For most married people, they direct most items to their spouse, or to family if their spouse should die before them. If one has children from a previous marriage, they might direct a split of assets. If you are unmarried, often things will go to the extended family of your choosing, or to a charity that meant a lot to you. If you don’t have a will, think about getting something in place. If it seems overwhelming, talking to your legal counsel can often help. This is likely something you aren’t going to need soon, and you can update if things change, but this is just planning for those you love.
Your attorney may offer other suggestions regarding a trust, making accounts payable on death, or other topics that can be discussed more in terms of planning. If you are just starting out, don’t get overwhelmed and bury your head in the sand. Just get the basics and then go from there. Like anything in life, sometimes taking the first step helps get you to the final steps, and, as always, there is good guidance for anything that makes you uncertain. So, just ask!
