As we navigate our serious and surreal reality, we are spending more time at home. This provides a good opportunity to have discussions with your family about planning for your future. Indeed, I often hear families say that estate planning involves more thought than they had anticipated. That’s because a good estate plan depends on comprehensively addressing your needs and wishes starting today through the end of your life.
Estate planning involves discussions on relationships, finances and mortality. These are not easy topics to consider at any point of your life, but such times remind us that they are necessary. One silver lining to our current situation is that we now have more time together to partake in them. You can help your aging parents start thinking about who will step into their shoes if they lose their ability to make decisions for themselves or talk to your adult children about ensuring that their minor children are taken care of should something happen to them.
To help you get started, here are quick tips that will save you and your loves ones time, thought and legal expenses down the road:
1. Make sure you have a healthcare directive in place. A healthcare directive allows you to select who will step into your shoes to make medical decisions for you when you cannot speak for yourself. Who will be responsible for your medical care if you lack the ability to make decisions for yourself? The person(s) you select is known as your agent(s). Start thinking about who your agent will be and speak with him or her to obtain your agent’s address and best contact number.
2. Make sure you have a financial directive in place. A financial directive allows you to select who will step into your shoes to make financial decisions for you if you cannot speak for yourself. Who will pay your medical bills? Who will make mortgage payments on your behalf? Again, start thinking about who your agent will be and to speak with him or her to obtain your agent’s personal information.
You can have different agents for different directives. If you do so, it is a good idea to make sure the people you select can work well with each other. For more detail on #1 and #2 and top tips on how best to make these work for you, read here.
3. Start important conversations with yourself and others. Now is the time to speak with loved ones about being a trustee of your trust or an executor of your will. These are the individuals who will administer your trust or will and carry out your wishes upon your passing.
And if you aren’t ready to have these conversations, then at least consider who will carry out these roles on your behalf and what your objectives will be. Who should get which assets? Do you have minors who need care if something were to happen to you right now? And so forth.
4. Compile a list of important people, accounts and documents/valuables. Do you use a financial advisor? An accountant? Do you have online banking accounts? Credit card rewards programs? Start creating a master file of information for your agent, the trustee of your trust, and the executor of your will. Be sure to at least include:
a. The name, address, email address and contact number for accountants, advisors and investment professionals you work with.
b. Log-in credentials (i.e., usernames and passwords) for online accounts you maintain. Without it, your loved ones may not be able to access your accounts. As an additional safeguard, make sure you discuss these digital assets with an attorney who can help you plan for this in your estate planning documents.
c. A location of where important documents/valuables are kept. Write down where original documents are kept for your agent, trustee and executor. If you have any valuable personal property you are keeping for specific people, you should write down the item, who you will be gifting it to, record their value and document the location where they are kept.
5. Update beneficiary designations. For most financial, retirement and life insurance accounts, you can designate a beneficiary who will inherit your account upon your death. If done correctly, these designations avoid probate. Such designations should be reviewed periodically to ensure that they still fit your wishes. You should also select and review contingent beneficiary designations for these accounts -- i.e., who will inherit your account if your beneficiary predeceases you.
To be sure, we are living in unprecedented times, but there are some silver linings. One of these is that we now have more time to be proactive about our future. Estate planning is one way in which you can take care of your loved ones while remaining in control and maintaining peace of mind. We encourage you and your loved ones to get started.
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