People often think of estate planning as the act of drawing up a will or a trust to state your final wishes with regard to asset transfers. This is definitely at the core of the process, but there are some finer details that should be addressed as well, and we will look at three of them here.
Advance Directives for Health Care
A properly constructed estate plan will address end-of-life eventualities, and admittedly, these are matters that are not very pleasant to think about. At the same time, if you stick your head in the sand, a difficult situation can be that much worse.
Your plan should include a health care power of attorney document. The agent that you name in the document would be empowered to act on your behalf in the event you are too sick to make your own decisions. Examples are if you develop dementia, are in a coma, or on a ventilator.
Would you want to be kept alive through the utilization of artificial life support methods? This is a question that you can answer in your health care power of attorney document. You can also include your organ and tissue donation and comfort care medication choices in the document.
Situations can arise that are not directly related to the utilization of life support. These are also addressed in the power of attorney document.
The Health Insurance Portability and Accountability Act (HIPAA) was enacted as a response to encroachments on patient privacy. A provision contained within this legislative measure prevents doctors from communicating medical information with anyone other than the patient. To give your agent the ability to access the information they will need to make informed choices, you should include a HIPAA release form.
Beneficiary and Successor Beneficiary Designations
When you fill out forms associated with your life insurance policies, individual retirement accounts, and payable on death accounts, you name beneficiaries. In many cases, the administrator that guides you through the process will not mention successor beneficiaries.
You can add successors when you fill out these forms, and if you have not done so, you should attend to this critical detail. While you are at it, you should review the documents to make sure that the beneficiary designations reflect your current wishes.
Letter of Final Instructions
The third detail that we are going to shine a spotlight on is extremely important. If you use a will to facilitate asset transfers, you name an executor to follow your instructions and bring your wishes to fruition. When a trust is used, you name a trustee to follow the instructions you have set forth in the trust document.
These individuals will need information to be able to perform their duties effectively. For our clients, this is done in the “Location Lists” section of your estate planning binder. For other people, consider a letter of final instructions.
This letter would include the location of important hard copy documents, and you should provide access information for your online accounts. Keys and access codes for property, vehicles, storage units, etc. should be passed along as well.
You should list all the people that should be notified about your passing in the letter, including personal connections along with professionals that will play a role in the administration process.
These are a handful of the details that should be addressed, but there are no rules. You just put yourself in the shoes of the administrator and provide them with the information they will need.
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If you have learned enough to know that it is time for you to put an estate plan in place, we are here to help. You can send us a message to request a consultation appointment, and we can be reached by phone at 630-568-8611.