Estate Planning the Right Way
Carissa Giebel 5:19 p.m. CDT October 27, 2014
Some people don’t take the time to do estate planning, usually because they don’t want to think about dying or they are too busy to take the time.
But taking the time to plan and make arrangements for a period of disability or beyond not only helps your loved ones during a difficult time, but it also allows you to make the important decisions on who should make decisions about your health care and manage your assets.
One of the most important planning you can do is plan for a period of disability or incapacity, in case you are unable to make your own decisions.
A health care power of attorney gives you the opportunity to name an agent to make your medical decisions. A living will is used to express your wishes regarding end of life medical treatment. A HIPAA authorization allows you to give doctors and medical professionals permission to share your medical information and condition with your loved ones. A durable power of attorney is used to name an agent to manage your assets and make your non-medical decisions.
It’s also important to have a will or trust in place, which will lay out how you want your assets distributed to your desired beneficiaries, and who you want to be in charge of distributing the assets and paying your final bills.
If you have minor children, you want to be able to nominate guardians to care for your children. Without planning, you are leaving the decisions up to the court to choose who will act in these roles.
It may be your desire to avoid probate, which is the court process by which your personal representative settles your estate. Probate can be costly and time-consuming, usually costing thousands of dollars in legal fees and other expenses and taking months, even sometimes years, to complete.
All assets with beneficiaries named, such as life insurance and retirement accounts, are not subject to probate. Assets owned as joint tenants transfer automatically to the surviving owner(s). Assets in a trust are also not subject to probate and can provide an ease of transfer to your desired beneficiaries.
Another reason to avoid probate would be to keep your estate administration private, as probate makes a public record of all your assets and liabilities, making it much easier to contest.
Other considerations to think about would be long-term-care insurance or an irrevocable trust, or a combination of both, if you are interested in protecting your assets from potential long-term-care costs.
For families with children to support or a mortgage or other loans to pay, you may want to consider life insurance to help cover those costs. You may even want to consider planning, and even pre-paying, your memorial, making notes of your wishes for your loved ones.
Taking a little bit of time now can save your loved ones a lot of time, money, and stress later on.