Planning ahead has obvious benefits. Whether you’re planning a vacation or researching for a job interview, it’s always smart to outline your priorities and anticipate potential challenges that may arise. Planning your estate has similar benefits. With plans clearly established, your wealth and assets are protected should you pass away or become incapacitated. It’s important to be aware, however, that simply meeting with an attorney and signing a Trust does not mean your estate planning process is complete. Without properly funding your Trust, your assets could still be forced through the probate process.
While the term seems scary, Probate is a relatively simple concept: it’s a legal procedure that transfers assets from the deceased to their heirs or beneficiaries. When a Will doesn’t exist or does not clearly outline a person’s plans for their estate after their passing, a judge will need to give legal permission for their assets to be passed on to their heirs. If a Will does exist, the court is involved to ensure the Personal Representative administers and distributes the estate according to the terms of the Will. This process, called Probate, is more common than you might expect. Not only does the Probate process invite the judge to become involved in the distribution of the assets, it can also be a very public, time consuming, and expensive process.
Depending on the value of the assets to be distributed through the Probate process, some jurisdictions have a simplified probate proceeding. However, this can still be a time consuming and public proceeding.
Not every asset goes through the Probate process. Anything owned solely by the deceased, like a home or vehicle, will be subject to Probate. Any asset that has a surviving co-owner or beneficiary designation will transfer to the named individual automatically upon your death. Property held in a Living Trust is also exempt from the Probate process because the assets are deemed to be owned by the Trust, not you.
Probating a Will can be stressful. In the days and weeks following the loss of a loved one, the last thing family members want is a legal battle for their inheritance. In especially large estates, property may need to be professionally appraised and inventoried. Debts and taxes will also need to be paid before the estate can be fully settled. The attorneys who handle these tasks will also take a chunk of the money for their involvement in the administration of the estate. Also, since Probate is a matter of public record, there is a lack of privacy to consider. It’s no wonder so many people hope to avoid Probate altogether.
One of the most common ways to avoid Probate is to use a Revocable Living Trust to protect your assets. In order for the Trust to keep your assets out of Probate, the assets have to be funded into the Trust while you are alive. Failure to complete this step will lead your family to Probate Court, even if it is just to have the assets transferred to the Trust.
If you have successfully funded your Trust, your assets will be administered as you have directed in your Trust once you pass away, without court involvement. The result is the transfer of your assets easily, timely, and privately.
If you have questions about funding your Trust, please give me a call at (858) 453-6032 or click here to set up a call. I can review your assets and ensure that everything is in place so your family can have a smooth administration, without court involvement. When it comes to the future, leave nothing to chance.
For most people, thinking about one’s own mortality is unpleasant and low on the list of priorities. While you may objectively recognize the need to plan for your future – and the future of your loved ones after you’re gone – it can be hard to summon the motivation to actually create a will or trust. If you’ve made an effort to begin the process but haven’t finalized the details, consider this article the sign you need to finish up. When it comes to an estate plan, though, an unfinished one is about as useful as not having one at all.
Estate Plan Procrastination
There are many reasons why people avoid finishing up their estate planning. For one, the process can be a reminder that you are not, in fact, immortal. The very real consideration of how your retirement fund, your assets, and your wealth will be distributed amongst your beneficiaries can trigger many difficult emotions. Even initiating a meeting with an estate planning attorney can feel like a chore. Instead of acting in their own best interests, many choose to bury their heads in the sand to avoid these feelings.
Of course, even if you are feeling relatively
level-headed about the estate planning process, the choices you are tasked with
making can feel overwhelming. Depending on your family dynamics, beneficiaries
may end up feeling frustrated, sad, or even angry about their inheritance. It’s
impossible to please everyone, but when serious money is on the line, the
pressure to make fair decisions can be intense. It is better for you to make the
decision instead of leaving it up to the courts.
An unfinished estate plan isn’t always the result
of emotional upheaval or internal debate about inheritance. Like other money
management chores, estate planning is often put off in favor of more pressing concerns.
Busy lives, holidays, vacations, and major life events like marriage or
pregnancy can cause people to put off their estate planning. While certainly
understandable, this kind of procrastination can have serious consequences and
will add another large and emotionally charged project to your family’s to-do
list when you pass away.
Unfinished Estate Plan
Regardless of your reasons for procrastinating on
estate planning, the results are the same: Your unfinished will or trust – if
it exists at all – is likely unenforceable. While there may be documentation of
your wishes, without a signature, your estate will be forced through probate.
Expensive and time-consuming, probate is a public legal proceeding that puts
your private affairs on display. While probate doesn’t always have to be a
stressful experience for beneficiaries, there is a risk that your unfinished
estate plan won’t be adhered to by a judge.
Regardless of the reason, if you have an unfinished estate plan, give me a call at (858) 432-3923 so I can assist you in ensuring you have a complete and comprehensive estate plan that will actually work in the event of your incapacity and at your death. If you’ve been putting off finishing or starting your plans for your estate, grab your calendar, and give me a call to schedule an appointment to complete the process and check one more thing off your to-do list.
While we all want to provide financial help to
our loved ones—whether they are family or close friends—it is important to
understand that how the money is classified will directly affect your estate
planning. Accordingly, the intent behind the transfer of the money is key when
determining if it will be considered a loan, gift, or advancement.
If there is a mutual understanding that the
money you gave to a loved one is to be paid back, this is considered a
loan—whether the so-called loan was documented or not. If the money lent is not
paid back before you pass away, the sum is still owed to your estate by the
borrower. The loan becomes an asset of the estate. For this reason, it is key
to ensure the proper documentation is drawn up so that both parties—the lender
and the borrower—are aware that the transfer is a loan and will remain an
outstanding obligation until it is paid in full.
Because there is a debt that is owed to you,
there are a couple of ways you can handle it in your estate plan. First, you
could decide that you will forgive the debt if it is still outstanding when you
die. In order to do this, there needs to be specific language in your will or trust.
Also, depending upon the amount to be forgiven, you may want to consult with
your accountant or CPA to make sure that this will not bring about any
undesirable consequences for either party. Alternatively, if you die while the
debt is still outstanding, and the borrower is set to receive an inheritance
from you, an arrangement can be made that his or her inheritance will be
reduced by the amount of the loan. This will decrease the amount that the
borrower will owe, and, depending upon the amount of the inheritance, may
eliminate the debt.
In sum, if you are not expecting the loan to
be paid back, the transfer of funds could be classified as a gift or an
advancement depending upon what impact you would like the transfer to have on
the individual’s inheritance.
If you transfer money to a loved one without
the expectation of being paid back and without any additional considerations
made with respect to your estate planning, it is deemed to be a gift. It is
important to note, if the gift is for an amount over the annual exclusion,
which is $15,000.00 in 2019, a gift tax return will need to be prepared and
filed with the Internal Revenue Service. When deciding to make a gift to a
loved one, it is important to consider what impact you would like it to have on
your estate planning. If your estate planning goal is to make the same gifts
to all of your beneficiaries, making a
gift to one of them during your lifetime will upset this balance because this
one individual may ultimately receive more than the other beneficiaries.
If you would like to give money to a
beneficiary during your lifetime but you do not want it to disrupt the
distribution scheme contained in your estate plan, you can consider the giving
of the money to be an advancement.If
the money transfer is classified as an advancement, then the person would in
effect be receiving a portion of his or her inheritance ahead of time. In such
a scenario, the beneficiary’s share of the estate will be reduced by the amount
of the advancement when you pass away. In order for this to be properly carried
out, however, there are particular provisions that must be contained in your
estate planning documents. Additionally, accurate records must be kept
regarding the transfer of funds, particularly if multiple advancements are
If you are thinking about transferring money to a family member or friend, give me a call at (858) 432-3923 or contact me to schedule an appointment so we can discuss how the transfer can or will affect your estate planning goals.
Whether or not you have an estate plan in place, you have likely heard the term “probate.” Probate is the legal process by which a deceased individual’s assets are distributed under court supervision. Said in another way, Probate is a lawsuit against your estate for the benefit of your creditors and beneficiaries. This process is necessary to distribute assets that are solely in the name of the deceased person. Probate is governed by state law.
One of the appealing aspects of putting together an estate plan is to avoid probate. One way to avoid the probate process is to ensure that no assets will be titled in the decedent’s name, or providing for an automatic transfer of title, at death. Ways to accomplish this include joint tenancy with rights of survivorship, transfer-on-death (TOD) or payable-on-death (POD) beneficiaries, or use of a Trust.
Joint ownership is easy to create and transfer property; however, this solution provides its own set of concerns. TOD and POD accounts can be efficient because, upon the account owner’s death, they immediately transfer the account, outside of probate, to the named recipient. While they are easy (and typically free) to set up, there are some drawbacks to this form of “probate avoidance” planning. It is important to note that in this case, the account is transferred to the beneficiary outright without any creditor protection. The best and most efficient way to avoid probate is the use of a trust. By placing assets into a Trust, you, as Trustee, own them, have full control of them (until incapacity) and benefit from them. Accordingly, the assets do not go through probate because only property owned by the decedent goes through this process.
Note: If your estate planning consists of just a Will, this document will go through the probate process. While having a Will allows you to determine who will get your assets – as opposed to letting the court decide for you, a public, expensive and long court process will be initiated in order for your estate to pass to your beneficiaries under a Will.
Benefits & Downsides of Probate
While there are numerous estate planning tools that can be used to avoid probate, it is not always a bad thing. A probate court can ensure that your intentions and wishes listed in your Will are carried out after your passing. Additionally, the probate process guarantees all presented debts are discharged as well as any outstanding taxes on the estate. This, in turn, results in finality to the affairs of the deceased – and surviving family members. Of note, if the deceased had outstanding debt, the probate process gives creditors a window of time to file a claim against the estate, which could result in some debt forgiveness if there is a concern about the estate being insolvent.
That being said, there are downsides to the probate process. One such downside is the cost. Due to the filing and inventory fees imposed by the probate courts, this is an additional expense eating away at the estate. Also, the probate process can be very time consuming. The probate must be open for a minimum period of time to permit creditors to file claims against the estate. For most uncomplicated probate estates, it will take a minimum of one year to administer. Additionally, the lack of privacy can be a concern for most families. The contents of your Will, and any other documents that have to be filed with the court, will be a matter of public record. Any disgruntled family member wondering how your estate was divided up, will have the ability to get access to the documents through the probate process. Lastly, the probate process takes control away from the deceased and the family because if you do not have a Will the probate process puts the disbursement of a deceased’s assets in the hands of the court and at the mercy of local intestacy law.
If you have questions about the probate process and intestacy laws in California, feel free to give me a call at (858) 432-3923 or click here to schedule an appointment. No matter if you have a little or a lot, a comprehensive and customized estate plan will help you avoid probate and make sure your loved ones are taken care of when you are gone.
If you have a loved one with disabilities, you
may be familiar with “ABLE” accounts, authorized by Congress in 2014 under the
Achieving a Better Life Experience Act.
ABLE accounts are tax-advantaged savings accounts–similar to 529
education savings plans–whose funds can be used to pay for certain qualifying
expenses of disabled individuals. As a result of the Tax Cuts and Jobs Act
(TCJA), there are several changes that affect ABLE accounts.
You Should Know
First, a 529 account can now be rolled over to
an ABLE account. However, the ABLE account must be for the same beneficiary as
the 529 account or for a member of the same family. Previously, families who
originally funded a 529 account for a child whose disability manifested later
in life would suffer a tax penalty if the funds were withdrawn from the 529
account to cover medical expenses because they were not allowable education
expenses. Now those same funds, through
the use of the rollover, can be made available for the beneficiary’s
disability-related expenses. There are limits as to how much can be rolled
over, so it is important to discuss any changes to a 529 plan with your tax
Second, a beneficiary of an ABLE account can
now contribute their personal earned income into their own account. The maximum
amount a beneficiary can contribute is equal to the annual federal poverty
level for a one-person home ($12,490.00 in 2019 in the continental United
States and the District of Columbia). These contributions, however, are
separate and apart from contributions
made to the ABLE account by other individuals (family members, friends,
estates, trusts, etc.). Further, a
working beneficiary will not be eligible to contribute their own money to the
ABLE account if their employer contributes to a workplace retirement plan on
his or her behalf.
Third, those beneficiaries who contribute to
their own ABLE account, as opposed to others who contribute to the account, may
be eligible for the Saver’s Credit. Up to $2,000 of the contributions made by
ABLE account beneficiaries may be eligible for this credit. This may help lower any income tax owed by
the beneficiary or help increase any refund the beneficiary may be entitled to.
There are, however, additional requirements that need to be met and it is
important to check with an experienced professional to determine what credits
may be available for a beneficiary who contributes to their own account.
It is important to know that ABLE accounts, as well as Special Needs Trusts, have an underlying purpose: to supplement, not replace, the benefits and services provided by government programs like Medicaid and Supplemental Security Income (SSI). If you have a loved one with special needs, contact me at (858) 432-3923 to help guide you through the process of creating a plan that best suits your family’s needs. I look forward to discussing your specific needs and objectives with you!
In the first part of this series, I discussed the first three of six questions you should ask yourself when selecting a life insurance beneficiary. Here I cover the final half.
Selecting a beneficiary for your life insurance policy sounds pretty straightforward; however, given all of the options available and the potential for unforeseen problems, it can be a more complicated decision than you might imagine.
For instance, when purchasing a life insurance policy, your primary goal is most likely to make the named beneficiary’s life better or easier in some way in the aftermath of your death. However, unless you consider all of the unique circumstances involved with your choice, you might actually end up creating additional problems for your loved ones.
Last week, I discussed the first three of six questions you should ask yourself when choosing a life insurance beneficiary. Here I cover the remaining three:
4. Are any of your beneficiaries minors?
While you’re technically allowed to name a minor as the beneficiary of your life insurance policy, it’s a bad idea to do so. Insurance carriers will not allow a minor child to receive the insurance benefits directly until they reach the age of majority.
If you have a minor named as your beneficiary when you die, then the proceeds would be distributed to a court-appointed custodian tasked with managing the funds, often at a financial cost to your beneficiary, even if the minor has a living parent. As a result the child’s other living birth parent would have to go to court to be appointed as custodian if he or she wanted to manage the funds. Additionally, in some cases, that parent would not be able to be appointed (for example, if they have poor credit), and the court would appoint a paid fiduciary to hold the funds.
Rather than naming a minor child as beneficiary, it’s better to set up a trust for your child to receive the insurance proceeds. With a Trust you get to choose who would manage your child’s inheritance, and how and when the insurance proceeds would be used and distributed.
5. Would the money negatively affect a beneficiary?
When considering how your insurance funds might help a beneficiary in your absence, you also need to consider how it might potentially cause harm. This is particularly true in the case of young adults.
For example, think about what could go wrong if an 18 year old suddenly receives a huge windfall of cash. The 18 year old might blow through the money in a short period of time and even worse, getting all that money at once could lead to actual physical harm (even death), as could be the case for someone with a substance-abuse problem.
To help mitigate these potential complications, some life insurance companies allow your death benefit to be paid out in installments over a period of time, giving you some control over when your beneficiary receives the money. However, as discussed earlier, if you set up a trust to receive the insurance payment, you would have total control over the conditions that must be met for proceeds to be used or distributed. For example, you could build the trust so that the insurance proceeds would be kept in trust for beneficiary’s use inside the trust, yet still keep the funds totally protected from future creditors, lawsuits, and/or divorce.
6. Is the beneficiary eligible for government benefits? Considering how your life insurance money might negatively affect a beneficiary is absolutely critical when it comes to those with special needs. If you leave the money directly to someone with special needs, an insurance payout could disqualify your beneficiary from receiving government benefits. Under federal law, if someone with special needs receives a gift or inheritance of more than $2,000, they can be disqualified for Supplemental Security Income and Medicaid. Since life insurance proceeds are considered inheritance under the law, an individual with special needs SHOULD NEVER be named as beneficiary.
To avoid disqualifying an individual with special needs from receiving benefits they may genuinely need, you would create a “special needs” trust to receive the proceeds. In this way, the money will not go directly to the beneficiary upon your death, but be managed by the trustee you name and dispersed per the trust’s terms without affecting benefit eligibility.
The rules governing special needs trusts are quite complicated and can vary greatly from state to state, so if you have a child who has special needs, meet with me, an experienced estate planning attorney, to ensure you have the proper planning in place, not just for your insurance proceeds, but for the lifetime of care your child may need.
Make sure you’ve considered all potential circumstances
These are just a few of the questions you should consider when choosing a life insurance beneficiary. Consult with me to be certain you’ve thought through all possible circumstances.
If you think you may need to create a trust—special needs or otherwise—to receive the proceeds of your life insurance, please feel free to contact me so I can properly review all of your assets and consider how to best leave behind what you have in a way that will create the most benefit—and the least challenges—for the people you love. Schedule your Family Wealth Planning Session today by calling me at (858) 432-3923. I look forward to being of service to you and your family!
Selecting a beneficiary for your life insurance policy sounds pretty straightforward. You’re just deciding who will receive the policy’s proceeds when you die, right?
But as with most things in life, it’s a bit more complicated than that. It can help to keep in mind that naming someone as your life insurance beneficiary really has nothing to do with you: It should be based on how the funds will affect the beneficiary’s life once you’re no longer here.
very likely that if you’ve purchased life insurance, you did so to make
someone’s life better or easier in some
way in the wake of your death. But unless you consider all of the unique
circumstances involved with your choice, you might actually end up creating
additional problems for the people you love.
Given the potential complexities involved, here are a few important questions you should ask yourself when choosing your life insurance beneficiary:
1. What are you intending to accomplish?
The first thing to consider is the “real” reason you’re buying life insurance. On the surface, the reason may simply be because it’s the responsible thing for adults to do; however, I recommend you dig deeper to discover what you ultimately intend to accomplish with your life insurance.
Are you married and looking to replace your income for your spouse and kids after death? Are you single without kids and just trying to cover the costs of your funeral? Are you leaving behind money for your grandkids’ college fund? Are you intending to make sure your business continues after you’re gone? Or perhaps your life insurance is in place to cover a future estate-tax burden?
The real reason you’re investing in life insurance is something only you can answer. The answer is critical, because it is what determines how much and what kind of life insurance you should have in the first place. By clearly understanding what you’re actually intending to accomplish with the policy, you’ll be in a much better position to make your ultimate decision on who to select as beneficiary.
2. What are your beneficiary options?
Your insurance company will ask you to name a primary beneficiary – your top choice to get the insurance money at the time of your death. You may also name a contingent beneficiary who will receive the insurance money if your primary beneficiary predeceases you. If you fail to name a beneficiary, the insurance company will distribute the proceeds to your estate upon your death. If your estate is the beneficiary of your life insurance, that means a probate court judge will direct where your insurance money goes at the completion of the probate process.
This process can tie your life insurance proceeds up in court for months or even years. To keep this from happening to your loved ones, be sure to name, at the very least, one primary beneficiary.
For maximum protection, when naming your primary beneficiary, you should probably name more than one contingent beneficiary in case both your primary and secondary choices have died before you. Yet, even these seemingly straightforward choices are often more complicated than they appear due to the options available. For example, you can name multiple primary beneficiaries, like your children, and have the proceeds divided among them in whatever way you wish. What’s more, the beneficiary doesn’t necessarily have to be a person. You can name a charity, nonprofit, or business as the primary (or contingent) beneficiary.
It’s important to note that if you name a minor child as a primary or contingent beneficiary (and he or she ends up receiving the policy proceeds), a legal guardian must be appointed to manage the funds until the child comes of age. This can lead to numerous complications (which I’ll discuss in detail next week in Part Two), so you should definitely consult with an experienced attorney if you’re considering this option.
When selecting your beneficiaries, you should ultimately base your decision on which person(s) or organization(s) you think would most benefit from the money. In general, you can designate one or more of the following examples as beneficiaries:
- One person
- Two or more people (you decide how money is split
- A trust you’ve created
- Your estate
- A charity, nonprofit, or business
3. Does your state have
If you’re married, you’ll likely choose your spouse as the primary beneficiary. However, unless you live in a state with community-property laws, you can technically choose anyone: a close friend, your favorite charity, or simply the person you think needs the money most.
That said, if you do live in a community-property state, your spouse is entitled to the policy proceeds and will have to sign a form waiving his or her rights to the insurance money if you want to name someone else as beneficiary. Currently, community-property states include Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.
Next week, I’ll continue with Part Two in this series discussing the remaining three questions to consider when naming beneficiaries for your life insurance policy.
As an experienced Estate Planning Attorney I can guide you to make informed, educated, and empowered choices to plan for yourself and the ones you love most. Contact me at (858) 432-3923 today to get started with a Family Wealth Planning Session. I look forward to serving you!
Like many taxpayers, if you’ve already filed your federal income taxes for 2018, you may be surprised to discover you’re not getting a refund this time. If so, this was almost certainly due to the sweeping tax overhaul made by the 2017 Tax Cut and Jobs Act (TCJA).
Since personal tax rates were lowered by the TCJA, it’s natural to assume you would owe less taxes, not more. But as you may have discovered, this isn’t always the case.
Seeing that the TCJA was promised to offer most people a tax break, understanding why you might owe more taxes in 2018 (rather than less) can be confusing. The following questions and answers are designed to shed some light on this situation, so you can start revising your tax strategies for coming years.
Q: What changed?
A: In addition to lowering personal income tax rates, the TCJA doubled the standard exemption to $12,000, added limits to deductions for state and local taxes (SALT), eliminated personal exemptions, set limits on deductions for home-mortgage interest, among many other changes.
Given all of the changes, you may find that you’re no longer withholding the proper amount of taxes from your paycheck and/or quarterly installments to the IRS. When filing, this can result in either overpaying your taxes (and getting a refund) or underpaying (and owing money).
Q: What does this mean for me?
A: In light of these new changes, you should carefully review your withholding and make adjustments if necessary. To help with this, the IRS published new withholding tables and updated its withholding calculator into which you can input your current tax data to see if you need to make any changes.
Q: How do I change my withholding?
A: If you work as an employee, you change your withholding by making adjustments to your W-4. If you work for yourself, you either increase or decrease your estimated quarterly payments.
A W-4 determines how much income tax is withheld from your pay by your employer. You fill out a W-4 when you start a new job, but you can change it at any time. Specifically, the form asks you for the number of allowances you want to claim based on personal factors, such as being married and/or having children and filing as head of household.
The more allowances you claim, the less federal income tax your employer will withhold, which translates to more money in your paycheck. The fewer allowances you claim, the more federal income tax your employer will withhold, lowering your take-home pay.
It’s important that you withhold the proper amount from your paycheck or make quarterly payments. Don’t withhold enough, and you’ll owe the IRS at the end of the year. Withhold too much, and you might get a big refund, but you’ve basically given the government an interest-free loan for that year.
Maximize your tax savings
Adjusting your withholding is just one of many strategies you can use to save on your taxes. Indeed, the TCJA also changed tax laws that have the potential to affect your estate planning strategies as well. In light of this, when the 2018 tax season wraps up, I’ll be happy to refer you to a few of my favorite local CPAs to bring you support and guidance that you can use to maximize your tax savings in 2019 and beyond.
As always, if there is anything I can do to support you or if you have any questions about your estate plan or need to set up a new estate plan, please contact my office at (858) 432-3923.
It’s that time of year
again: tax season. No one enjoys
doing their taxes, and that is likely why many
of us leave this tedious task to the last…possible…moment. As Tax Day
approaches, millions of Americans are likely scrambling to track down all of
their important documents to meet the April 15 deadline. But as with anything
in life, the more you rush, the more likely you are to make mistakes. When it comes to your taxes, these mistakes can result in
monetary penalties, delays in getting a refund, and even an increased chance of being audited. Below are four easily avoidable mistakes
people make at tax time.
- Not filing when you could get a refund: No matter what your income level, filing your taxes is important. This is particularly true if you are a low-income earner, as you may be entitled to a refund from the government through the earned income credit.
- Not taking advantage of professional advice: Our tax law is complicated. That’s why speaking with a tax professional can help ensure you are maximizing your tax refund or minimizing your tax bill. Whether it is itemizing expenses or taking advantage of tax credits, do not leave your taxes to chance. If you do not have a CPA, please contact me and I’ll be happy to make an introduction to a professional and qualified CPA.
- Not taking the time to organize paperwork: Getting all of your important documents together is not only important because it ensures you are properly filing your taxes, but it particularly comes in handy in the event you get audited by the IRS. Instead of doing this at the last minute, take the time to save documents throughout the year so you are ready when April 15 arrives.
- Not handling other “legal” matters: Since you are getting your financial house in order for tax season, it is a great opportunity to assess your other legal needs – like Estate Planning (also known as Legal Life Planning). Wills, Trusts, life insurance, healthcare proxies, and powers of attorney are just some of the valuable tools available to you. Planning for your incapacity and your family’s future when you are gone is just as critical, and leaving the results to chance can cause more stress on already grieving loved ones.
Getting ready for tax season is important, but so is Estate Planning. Do not leave this important task for later, as life is unpredictable. If you have questions about how to get started on your estate plan or need assistance updating an existing plan, contact Cheever Law, APC at 858-432-3923. I look forward to being of service to you.
In the first part of this series, I discussed the estate planning tools all unmarried couples should have in place. Here, we’ll look at the final two must-have planning tools.
Most people tend to view estate planning as something only married couples need to worry about. However, estate planning can be even more critical for those in committed relationships who are unmarried.
Because your relationship with one another is not legally recognized, if one of you becomes incapacitated or when one of you dies, not having any planning can have disastrous consequences. Your age, income level, and marital status makes no difference—every adult needs to have some fundamental planning strategies in place if you want to keep the people you love out of court and out of conflict.
Last week, I discussed Wills, Trusts, and Durable Powers of Attorney. Here, I’ll look at two more must-have estate planning tools, both of which are designed to protect your choices about the type of medical treatment you’d want if tragedy should strike.
3. Medical power of attorney (Advance Health Care Directive)
In addition to naming someone to manage your finances in the event of your incapacity, you also need to name someone who can make health-care decisions for you. If you want your partner to have any say in how your health care is handled during your incapacity, you should grant your partner medical power of attorney.
This gives your partner the ability to make health-care decisions for you if you’re incapacitated and unable to do so yourself. This is particularly important if you’re unmarried, seeing that your family could leave your partner totally out of the medical decision-making process, and even deny your him or her the right to visit you in the hospital.
Don’t forget to provide your partner with HIPAA authorization within the medical power of attorney, so he or she will have access to your medical records to make educated decisions about your care.
4. Living will
While medical power of attorney names who can make health-care decisions in the event of your incapacity, a living will explains how your care should be handled, particularly at the end of life. If you want your partner to have control over how your end-of-life care is managed, you should name them as your agent in a living will.
A living will explains how you’d like important medical decisions made, including if and when you want life support removed, whether you would want hydration and nutrition, and even what kind of food you want and who can visit you.
Without a valid living will, doctors will most likely rely entirely on the decisions of your family or the named medical power of attorney holder when determining what course of treatment to pursue. Without a living will, those choices may not be the choices you—or your partner—would want.
I can help
If you’re involved in a committed relationship—married or not—or you just want to make sure that the people you choose are making your most important life-and-death decisions, consult with me to put these essential estate planning tools in place.
With my help, I can support you in identifying the best planning strategies for your unique needs and situation. Contact me at 858-432-3923 today to get started with a Family Wealth Planning Session. I look forward to serving you.