You are in good health, feel great, and are just starting (or thinking about starting) your retirement years. Why make estate planning a priority? There’s plenty of time, right?
Wrong. Anything can happen to anyone at any time, and unless you make certain decisions beforehand, upon your death the state will either make them for you or decide who does. Plain and simple.
Use this as a checklist to make sure you have made conscious decisions in each of these five areas, as applicable, and that whatever decisions you’ve made are legally binding.
1. Medical power of attorney
What if you are in a horrible accident, and survive? Decisions about your continuing care must be made and they might not be the decisions you would have wanted for yourself.
How to make sure that your end-of-life care is what you want? You invest medical power of attorney is someone you trust. Discuss your priorities with that person and memorialize your wishes in a living will.
2. Financial power of attorney
When you vest financial power of attorney in someone, you empower someone to manage your finances for you. Married couples often name one another so that either can make financial decisions regarding the other.
“Springing” financial power of attorney is triggered only when a doctor declares you incapacitated. And you can designate the power of attorney to encompass all aspects of your financial life or only certain financial functions.
Don’t you want your mortgage and other bills to be paid if something happens and you are unable?
3. Distribution Issues in a Blended Family
These days when most people have been married more than once, this issue arises frequently. For example, let’s say a decedent’s will provides that there will be equal distribution among all “his children.” Does that include the children his second wife brought to their marriage, whom he loved as his own? What was his intent?
Spell it out. Use the names of your heirs if you can – this leaves no room for error. But if you plan for grandchildren to inherit, be sure to include language such as “any offspring of [names], natural or adopted” to provide for children born or adopted after you draft your will.
4. A Succession Plan for Your Business
If you own a business, you probably already know that you need to have a succession plan in the event you retire, become incapacitated, or die. But what does a succession plan include?
Simply put, you need to provide the who and what of passing control of business operations from yourself to your successor. You might choose a family member or an employee, but whomever you choose, you need to plan ahead to allow for a period of mentorship both in leadership skills and the requirements of the business itself.
5. Care for Minor or Special Needs Children
First, you must designate a guardian or guardians for your minor children. If you don’t, a court will decide who the children will live with, and it might not be the decision you would make.
Then, rather than leave the guardian with the funds to raise your children, create a trust. This ensures that the funds are used the way you intend.
If you have a special needs child, a special needs trust will provide for their needs. Also called a supplemental needs trust, this kind of trust allows the beneficiary to use the property of the trust for his or her benefit but remain eligible for needs-based government benefits for the disabled.
In conclusion, although no one cares to think of their own death, addressing these five issues will give you peace of mind knowing that you’ve tied up these loose ends.
About the Author
Veronica Baxter is a blogger and legal assistant living and working in the great city of Philadelphia. She frequently works with Chad Boonswang, Esq., a life insurance attorney.