The holidays are right around the corner. As we approach a new year, you may already be thinking about your New Year’s resolutions. Consider putting your estate plan at the top of your list. For some, you may never have created an estate plan. For others, it may have been some time since it was reviewed.
What's the Importance of Estate Planning?
You may be surprised to learn estate planning doesn’t simply mean having a plan for what happens in the event of your death. A comprehensive estate plan also includes planning for what happens in the event of your disability – specifically, if you become mentally incompetent. Disability planning is sometimes overlooked, but it can be the most important part of planning. We believe bad things only happen to others, never to us or our loved ones. But, if it does, are you, and your family, prepared?
Financial Power of Attorney
A good disability plan will include a Durable Financial Power of Attorney. The “durable” part means it endures or continues in the event of your mental disability. Seems logical but specific language is required in order to be effective. Your Durable Financial Power of Attorney allows you to nominate a person or persons you trust to make financial and legal decisions on your behalf. This directive is most helpful in the event someone needs to access your bank account, pay your bills, and make sure you are taken care of financially.
Healthcare Power of Attorney
You’ll also want a Durable Healthcare Power of Attorney (also known as a healthcare proxy or surrogate). This instrument nominates those people you trust to make every day healthcare decisions for you when you are unable to do so. When choosing a healthcare agent, select someone who will keep your best interests and wishes in mind. Important decisions that can be made with a Durable Healthcare Power of Attorney include things like consent to surgery, consent to treatment, transfer to or from a medical facility and the hiring and firing of healthcare professionals.
In addition to every day medical decisions, you will want to make your wishes known regarding end of life decisions. This advance medical directive is called a Living Will. This declaration sets forth your wishes regarding how you want to be treated with respect to life prolonging medical procedures. A Living Will applies in situations where you are unable to make your own decision, you have either a terminal condition, end stage condition or are in a persistent vegetative state and your doctors have determined there is no reasonable medical probability of your recovery. If these elements are present, then your Living Will sets forth your desire regarding the use of life prolonging procedures (respiration, hydration or nutrition). However, you can still receive procedures or medications that will alleviate your pain or provide comfort care.
Revocable Living Trust
Your estate plan should also include a Last Will and/or a Revocable Living Trust. Which one is right for you will depend on a number of factors including what types of assets you own, in which states and your overall net worth. Also critical will be how you want to leave money for the benefit of your spouse, your children, your pets and other loved ones.
Other Important Documents
Having a comprehensive estate plan is only the beginning. In order to be effective, your assets must be owned in a way that is aligned with your estate planning goals. You will also want to make sure your nominated successors are aware of your wishes as well as where you keep your important estate and financial documentation.
The new year is almost here. Now is the time to review existing plans, gather important financial information and make a resolution to ensure you and your family (including pets) will be protected in the event of an unexpected event. The importance of estate planning is undisputed. Seek out trusted financial and legal professionals like those at Hoyt & Bryan to help you with these important conversations and decisions.
For more information, visit www.HoytBryan.com.
Peggy R. Hoyt, J.D., M.B.A., B.C.S., is a board certified specialist with the Florida Bar in both wills, trusts and estates and elder law. She is an author, speaker, host of the weekly podcast, All My Children Wear Fur Coats and founder of Animal Care Trust, USA, a not for profit organization whose mission is to keep Loved Pets in loving homes.