In the event of your incapacity, it’s crucial that you begin estate planning to set processes and prepare documents such as a last will and testament or revocable living trust to safeguard your assets. Congress determined that due to the importance and benefits estate planning has for Americans and their families, it was necessary to bring awareness to the cause. Thus, since 2008, the third week of October has been recognized as National Estate Planning Awareness Week. While the onset of COVID-19 did encourage a majority of us to begin thinking about the future, many American families are still severely lacking an effective estate plan with just one-third of adults in the U.S. having documented wills or trusts. If you assume that estate planning isn’t for you because you haven’t acquired mass wealth or several large assets, you’d be mistaken.
The Importance of Having an Estate Plan
Estate planning is simply a way to protect your assets and your loved ones by creating legally valid documents that address a variety of concerns. These concerns often include ensuring that your money and property are protected, plans are in place in the event you become ill, and your assets are managed according to your wishes.
Beginning the Estate Planning Process
To begin the estate planning process, several considerations need to be made. Some of the things that will require your attention are whether or not you have a will or trust, your plans for powers of attorney, insurance coverage, and your existing accounts. Below, we will discuss these considerations more in-depth:
Last Will and Testament and Revocable Living Trusts - Do you have a last will and testament or a revocable living trust? Without these documents, the state takes over the task of distributing your assets, which may not reflect your wishes. Rather than choosing who will inherit what from your property, someone will be appointed by the court, instead of a trusted person of your choosing, who will be in charge of handling your affairs. This may involve caring for any children or pets, etc. Directly laying out your desired actions in a will or trust ensures your loved ones are well taken care of in the event of your passing or incapacitation.
Powers of Attorney - In the event that you become incapable of handling your own affairs, you may require powers of attorney to handle things like managing your finances or making medical decisions for you. A financial power of attorney designates an individual to make financial and property decisions on your behalf. This may include opening a new bank account, signing a deed, or getting your mail. A medical power of attorney designates a person you trust to make medical decisions for you when you are unable to speak for yourself.
Advance Healthcare Directive - An advance healthcare directive, also called a living will, should be set up to memorialize your wishes concerning your end-of-life care. This document specifies the actions that you would like taken regarding your health if you become unable to make those decisions for yourself.
Insurance - If you have insurance coverage, it’s important for your family to have the information needed to file medical claims in the case that you become incapacitated. This is also a good time to assess your level of insurance coverage and make necessary changes to your policy.
Existing Accounts - Managing your accounts and property while you are unable to is a top priority in estate planning. To properly do so, you should compile a list of all your existing accounts and only share this information only with trusted family members or other loved ones. This list should include at least the following information:
bank and investment accounts
titles to vehicles and homes
credit card accounts or loans
digital accounts and passwords
Social Security card, passport, and birth certificate
List Professionals You Work With - Lastly, it’s crucial that you also create a list of legal, financial, and medical professionals who have and continue to perform services for you. The list should include their contact information and HIPAA authorizations should be put in place with medical professionals to ensure that your loved ones can obtain needed information.
Encourage Your Loved Ones to Begin Estate Planning
National Estate Planning Awareness Week is a great opportunity to get your own estate plan in place, but be sure to also reach out to your loved ones to ensure their future estate plans as well. Estate planning is often a difficult topic to broach because it brings the unpleasant topics of aging and death to the forefront of our minds. Here are a few tips to help you start the conversation:
Be sensitive to your loved ones’ feelings. The topics that need to be addressed when discussing legacy or estate planning can be overwhelming, scary, and difficult to talk about. It’s important to confront loved ones about their estate plans with compassion and ease. Consider their feelings during this time and use soft language to get your point across. Estate planning is important, so focus on the positive aspects of setting up a will or trust such as the protection it will provide their loved ones when they’re no longer here.
Involve others in the conversation. When it comes time to bring up a loved one's estate plans, it’s best to have multiple people who love and care about the person be present. This can help prevent any misinformation from spreading and ensures no single person has sole control over the decisions made. Remember to emphasize the importance of a will or trust and how they work to see that your wishes are followed through.
Consult an estate planning attorney. Your family’s financial future is dependent upon proper planning with a knowledgeable estate attorney. With purposeful planning, you can safeguard your wealth and legacy so that it may be passed on to future generations.
Our estate planning and trust company in Reno, NV has been serving families and businesses throughout northern Nevada for over 25 years. As experienced estate attorneys, we are dedicated to providing you with the most current estate planning information and strategies to ensure your legacy for future generations. We’re able to prepare last will and testaments, revocable trusts, healthcare directives, and act as power of attorney in the case of your incapacitation. Contact us today to learn more about estate planning or sign up for one of our estate planning workshops.
A living trust and living will might sound similar but actually, the two are quite different.
A living trust is designed to help protect and distribute your assets. The assets are actually titled in the name of the trust and depending upon the terms of your trust, you may have complete control or hand the management of the trust over to someone else. Upon your death, beneficiaries receive the assets according to your terms in the trust. A method of avoiding probate, it’s a way of bypassing the lengthy and often expensive court process of distributing your assets.
A living will, however, is a legal way of informing your physician what you want done in case of a terminal condition. It’s used when you can no longer communicate your wishes due to an injury or illness that leaves you incapacitated. Your living will should be accompanied by a health care power of attorney. This document designates a person to speak on your behalf and relay your wishes with regard to certain medical treatments and decisions. It might relate to resuscitation, feeding tubes, etc. These "advance directives" also give loved ones peace of mind knowing that they are doing what you would have wanted.
Anderson, Dorn & Rader, Ltd.
It’s highly recommended that everyone draw up advance directives including a living will and a health care power of attorney, whereas a living trust is especially beneficial for those with a certain level of assets. To get help with a living will or living trust, a good estate planning attorney is your best bet.