You should consider the finer details when you are engaged in the process of estate planning, but unfortunately, some of them are often overlooked. In this post, we will look a little bit beneath the surface to provide some insight.
Life Insurance
Life insurance is going to be a part of most estate plans. It can serve as a safety net that will provide income replacement for your loved ones if you were to pass away before your time.
It is important to evaluate your family’s financial responsibilities as you make sure that you are always carrying sufficient coverage. As life events take place and the needs of your family increase, you may need to make adjustments.
Insurance serves other purposes in estate planning beyond that of an income replacement vehicle. It is at the core of the buy-sell agreements that are used in succession planning for business partners. It is also utilized to balance inheritances.
The above having been stated, your insurance policies will be of little use if the beneficiaries do not know they exist after you die. You may scoff at the notion, but in fact, a very significant sum of money is out there unclaimed.
How much you ask? Insurance companies are holding on to some $1 billion that has never been claimed by rightful beneficiaries according to Consumer Reports. Keep this in mind when you are planning your estate.
Authorization for Final Disposition
You can account for your final arrangements when you are devising your estate plan. This can be done through the execution of a device called an authorization for final disposition. With this document, you name someone to take care of final arrangements, and you can leave behind specific instructions if you care to do so.
There are instances when family members disagree about the right course of action, so this document can actually circumvent potential acrimony among your loved ones.
Letter of Last Instruction
With a letter of last instruction, you can provide the information that your estate administrator will need to handle the necessary tasks. In this document, you can pass along contact information for people that should be notified about your death. This would include personal relationships along with professionals that should be informed.
The physical location of relevant documents and keys to property would be part of this equation. Since most people manage many if not all of their accounts online, your letter should include the appropriate log-in information. You can also share your preferences with regard to the way you want your social media accounts handled.
Incapacity Planning
Unfortunately, many elders become unable to make sound decisions at some point in time. This is an eventuality that you should address in advance to prevent a guardianship proceeding.
When it comes to financial decisions, you can create a durable power of attorney and name an attorney-in-fact who would be empowered to handle your financial affairs in the event of your incapacitation.
If you create a living trust, you could name a disability trustee that would handle the assets that have been conveyed into the trust if you were to become incapacitated.
Financial decisions are not the only types of choices that may present themselves. Medical matters could come into play, and you should have an agent to make these types of decisions as well. This is done through the creation of a health care proxy or durable power of attorney for health care.
When you are creating the power of attorney, you should choose the representative very carefully. This person is potentially going to be tugged and pulled in different directions by family members who may have conflicting ideas about medical decisions. As a result, you want to select someone who is strong-willed and not easily swayed.
The agent should be willing to gain an understanding of your thinking and subsequently act as you would if you were able to communicate for yourself. Location is another factor. For logistic reasons, you should select someone who lives in the same geographical area that you do.
Learn More!
Our estate planning lawyers have created a very useful worksheet that you can use to learn more about the process in a personalized way. It is being offered free of charge right now, you can visit our worksheet download page to get your copy.
- How to Apply for Senior Medicaid in Vermont - December 11, 2022
- Planning for the “Silver Tsunami” - November 1, 2022
- Discharge of Indebtedness Income and Student Loan Forgiveness - October 27, 2022
