Regardless of a family’s financial situation and assets, estate planning is an important matter that should be addressed ahead of time. While there is a common misconception that this is reserved only for the wealthy with a laundry list of assets, estate planning is applicable to a large number of people. In fact, an estate is the total of many commonly owned assets like a home, vehicle and banking account. A proper estate plan transfers assets into trust where a trustee can effectively manage those assets.
That way a trustee, such as a person’s adult child, can utilize those assets to pay for medical care while that person is still alive. In turn, this can offset a considerable portion, if not all of a person’s medical expenses, as well as avoid probate after the person’s death. For those family with fewer assets, who can afford to lose the least, it’s critical to handle this process the right way. Here are the top three must haves for estate planning recommended by elder law experts.
1) An Up-to-date Will
This will state how assets will be distributed after a person’s death and name the executor who will carry out those wishes. Keeping a will up-to-date is often just as important as having one in the first place, so it’s a good idea to review it periodically and make any necessary changes. For example, if a person changes their intentions like adding a new beneficiary or decides they want a different executor, it’s important to make those changes as quickly as possible to ensure that it takes legal effect.
2) A Durable Power of Attorney (DPOA)
In the event that a person becomes incapacitated and unable to make decisions on their own, a durable power of attorney will be authorized to make decisions on behalf of that person. This could include telling doctors what type of medical treatment the person should receive, managing investments, and paying bills.
Whether incapacitation occurs because of an accident, illness or simply from the effects of aging, a durable power of attorney will look out for a person’s wellbeing and act in their best interest. Because we never know what life has in store, it’s important to choose the right DPOA ahead of time while a person can still make decisions on his or her own.
3) Advance Directives
This legal document specifies the terms of a person’s end-of-life medical care wishes and states who will be in charge in the event they become incapacitated. For example, this could cover instructions on tube feeding, life support, and organ donation. Advanced directives are helpful because they clarify a person’s wishes in advance, which helps eliminate confusion when you need to use them.
Estate planning helps put our minds at ease and minimizes the amount of stress placed on our loved ones. Having your clients’ affairs and wishes looked after before they need to address them will ensure they receive the care they need and the family and friends they leave behind are taken care of. Talk to your clients about making sure all these matters are looked after long before medical or economic issues strike.
Sanford M. Fisch
CEO & Co-Founder
American Academy of Estate Planning Attorneys, Inc.
9444 Balboa Avenue, Suite 300
San Diego, California 92123
Phone: (800) 846-1555