I have a client who has tremors in his hands. He can type on a laptop/computer, but he cannot apply a wet signature to documents. Yes, we still live in a world where wet signatures are required. That includes legal documents, such as estate planning documents. He has no cognitive impairment, though. Unfortunately, given the situation with the hand tremors, he needs a durable power of attorney, amongst other key components of an estate plan. Before I get too ahead of myself, let’s get you familiar with all the components of an estate plan.
Wills and Trusts:
No matter the amount of assets, everyone should have a will. And the preparation of a will does not need to be costly. A will ensures property and assets are distributed according to your wishes. There are also several non-financial aspects of a will. You will need to name a guardian and backup guardian for minor or special needs children. These decisions can be more complicated and time consuming than naming beneficiaries... Other considerations for a will include wishes for funeral or memorial service and disposition of personal property, which may be detailed in an addendum to your will, referred to as a letter of intent.
As for trusts, not everyone needs a trust. Trusts can help limit estate taxes or legal challenges. Trusts are also important if minor children or special needs children are beneficiaries to an estate. Trusts can be complicated and expensive, so make sure you have a good understanding of the trust and whether you actually need trusts in your estate plan.
Durable Power of Attorney (POA):
It is vital to assign a person or an agent who can act on your behalf when you cannot do so yourself. But that doesn’t only include you being mentally or physically incapacitated. Younger people who travel a lot might set up a POA so that someone can handle their affairs in their absence, to name one example. What about my client with hand tremors? It would be prudent for my client to assign a POA to someone who can apply a wet signature to documents. In addition to signing documents, a POA can transact real estate, enter financial transactions, and make other legal decisions for you.
Beneficiary Designations:
Beneficiary designations should reflect current reality which is why you need to review your will annually along with beneficiary designation forms for your investment accounts, including checking and savings accounts. Beneficiary designations override what is laid out in the will. So you should match up beneficiary designations with what is in the will to eliminate any confusion with respect to your intentions. Also, don’t forget to name a contingent beneficiary for all asset accounts.
Healthcare Power of Attorney (HCPA):
A HCPA designates another person (typically a family member) to make important healthcare decisions on your behalf in the event of incapacity. This person must be someone you trust and who shares your views with respect to such important healthcare decisions. This person could literally have your life in their hands. A backup person is ideal in the chance case that this person is not able to act in the time needed.
Living Will:
A living will is an advance care directive or legal document that instructs physicians and family on how you would like to be cared for if you are no longer able to communicate due to advanced illness or an unconscious state. In this document, you can also appoint a health care representative or proxy to make health care decisions for you. Again, this person must be someone you trust and who shares your views with respect to such important healthcare decisions. Organ donor guidance can also be included in this document.
Guardianships Designations:
This is such an important topic if you have minor children and special need children of any age that it is being mentioned twice in this article. If your will and/or trust does not incorporate guardianship designations, you should have a separate document in your estate plan that does address these designations. Make sure this person(s) shares your views, is financially sound, and genuinely willing to raise children. Again, a backup or contingent guardian should also be named.
So your estate plan can include all of the above documents, but it is most critical for you to have a will. If no will, your estate will end up in probate court, and the courts will decide who will inherit your assets, which probably will not align with your intentions for your estate. You want to be in control of the decision making with respect to your estate based on your intentions rather than relying on the probate court to make that decision for you. There are simple ways to complete a will online or you can consult an estate planning attorney to setup your estate plan.
DISCLAIMERS:
All information provided by Hartmann CFO, LLC and Healthy in Retirement is intended for informational purposes only. The views expressed are personal opinions and should not be construed as financial or tax advice for your specific situation. Please make sure to do your own research or find a trusted financial professional, tax adviser or attorney before making any financial decision on your own.
Neither Hartmann CFO, LLC, Healthy in Retirement nor its owners make any representations as to the accuracy or suitability of the claims made here. Nor does Hartmann CFO, LLC, Healthy in Retirement, or its owners assume any liability regarding financial results based on the use of information provided here.