Why estate planning?
One thing I find professionally distressing is a client’s absent estate plan.
If we give our death or incapacity any thought at all, many of us assume that everything will work out as we want. Our children are taken care of by our favorite relative. Our life partner will be allowed to make medical, financial, & legal decisions on our behalf. Our right-hand-manager will keep running the business.
But….that’s not really how this works.
By & large, our wishes in these instances must be DOCUMENTED to have effect.
Getting your estate plan in order answers questions such as:
What medical decisions do you want made for yourself if you’re unable to communicate them? Who should be making these decisions? || Depending on your state, these issues are addressed in a Living Will and/or a Durable Power of Attorney for Healthcare. In my home state of Georgia, these two documents are combined into one called an Advanced Medical Directive.
Will your spouse, partner, etc. be ALLOWED to make such medical decisions for you while you’re incapacitated? || A HIPAA Authorization allows healthcare providers to work with this person directly for your care. Hospitals, physicians, etc. face penalties for HIPAA violations. Not having paperwork in place puts everyone involved in a bad spot.
Who handles your finances if you’re incapacitated? What decisions may they make for you? || A Financial Power of Attorney allows someone you trust to handle your money for you when you’re not able.
What happens when you die? Will your family be taken care of in the way you hope? Will your financial legacy be preserved? || If you leave it to chance, it will be COINCEDENCE if everything works out the way you wish. A Will provides direction for who you wish to be the guardian of your minor children, how at least some of your assets are distributed to your heirs and/or charity, etc. Appropriate asset titling, beneficiary forms for IRAs, etc., and even a trust of some sort should be considered.
Your financial planner, tax advisor, and especially an estate planning attorney can all help you understand the laws of your state and how various scenarios could play out for you and those you love. We truly want to make sure you get this right. These conversations - perhaps hard conversations - will inform your decisions about which documents to put in place and the contents of those documents.
Don’t DIY this. Work with professionals. Unlike a tax return that gets kicked back for a missed 1099, you’ll likely NOT be in a position to know that your estate planning documents are insufficient or ineffective.
