The New Year is always a good time to take a look at your estate plan to make sure it
is up to date. It has been shown that less than half of people actually have yet to put
any estate documents into place and those who have done it may have outdated
documents. Typically, documents that were created when your children were born
may need updating 20, 30 or 40 years later, after your family and financial situation
have changed entirely.
There are five essential estate planning documents you should have in place. Read
more about each document, in order of importance, below:
The most important estate planning document is a durable power of attorney.
This document is used during life and appoints one or more people you trust to
handle your finances and legal matters in the event of your incapacity, whether
through illness, dementia, or an accident, and whether the incapacity is temporary
or permanent. Without a durable power of attorney document a family member may
need to petition the probate court for conservatorship. This alternative can be costly
and time consuming.
Next, a health care proxy document appoints an agent to make health care
decisions when and if you become incapacitated. Unlike the durable power of
attorney, it only takes effect when a doctor determines that you are unable to make
decisions yourself. This document appoints one person at a time so that there is a
single point-person dealing with medical professionals.
The important thing to remember with a health care proxy document is to make
sure your agent knows what decisions you would to be made. This can be done
through the medical directive and having a conversation with your agent. For help
to begin the conversation, telephone our office at 978-465-5407 to receive a copy of
an advance directive tool kit.
A HIPAA Patient Authorization is a separate document that gives access to your
medical records. The HIPAA laws do not allow medical practitioners to release
medical information to anyone, even a spouse, without a release. This document
allows you to list more than one person to share information with.
Your Last Will and Testament determines who will get your stuff when you die
and who will be in charge of paying your bills, filing your tax returns, and gathering
your stuff and distribution it according to your wishes.
Assets without a named beneficiary or not held with a joint owner will make up
your probate estate – only what you own in your name alone passes under the
terms of your will. In addition, your will determines the distribution of your tangible
personal property or your “stuff”. Typically, you can attach a memo indicating whom
you would like to get what.
Lastly, you may want to consider putting a revocable trust or “living” trust in place.
A trust is a document in which one or more people, the trustees, manage property or
investments for the benefit of one or more people, the beneficiaries. This document
will allow your estate to avoid probate by naming successor beneficiaries and
outlining how you would like your assets to be distributed.
As you can see, most of these documents are more important to have in place during
your lifetime as opposed to after life. Putting your estate plan in place or updating
your current estate plan will ensure that you and your family are taken care of in
any event.