It is hard to believe that we are heading into our second winter season while still in the midst of a pandemic. At this point, Coronavirus has taken a toll on our finances, as well as our physical and mental health. Most people likely know someone who has been seriously impacted by Covid-19, and it is worrisome. To add some peace of mind to this otherwise stressful situation, right now is an opportune time to make sure your health and finances are appropriately protected with an effective estate plan.
Many people think that estate planning is only for the wealthy, but this is simply not the case. Estate planning ensures that someone you trust will be able to make medical and financial decisions for you, should you become incapacitated. Estate planning can also ease the process of settling a person’s affairs after they pass away, helping your family and loved ones avoid emotionally-draining, lengthy, and costly legal affairs. Without a plan, the probate court will appoint someone to manage your financial affairs—and ultimately, the transfer of assets upon death—following intestate laws governed by the state.
Consider these three reasons for why now is a better time than ever to plan your estate:
A Plan for You
An estate plan is not just for when a person dies, but it can also protect someone in the event that they become incapacitated or cannot make decisions for themselves—for example, if someone was placed on a ventilator. Entrusting a specific family member or loved one to make medical or financial decisions on your behalf can help ensure your needs will be met, and that you will receive medical treatment in alignment with your beliefs and wishes. There are several estate planning documents that help protect your own best interests.
Your healthcare power of attorney designates an agent to act on your behalf, or be your representative, in situations where you are unable to make decisions regarding your own healthcare. A living will is also something to consider, as it includes an advanced healthcare directive, which provides instructions for end-of-life care.
A durable power of attorney may be one of the most important pieces in your estate plan. This document gives someone else the power to act on your behalf in financial and legal situations. Being “durable” means that the authority of the individual you have assigned remains, even if you become incapacitated. The power of attorney stays in effect until you die, or revoke the document.
A Plan for Your Children
So many things right now are uncertain with the pandemic, and sometimes there doesn’t seem to be a rhyme or reason to why things happen. If you are the parent of minor children, they need to be protected in case the unthinkable should happen. An estate plan will help ensure that children are cared for by approved guardians if the parents die before they turn 18. Without legally binding documents in place, the courts could be responsible for deciding who will raise your children.
A Plan for Your Assets
With no documented estate plan, such as a will or living trust, the state in which a person resides will typically decide how assets will be distributed after a person dies. By having an estate plan, however, the courts will have clear (and legal) documentation about how assets should be transferred upon death. This can save a family time and frustration, and ensure that assets are dispersed in the intended manner.
A last will and testament dictates who will serve as the executor or personal representative for your estate, what power they have, and what they will be responsible for after your death, for example, collecting documents, paying debts, and distributing assets. The last will and testament also identifies how, when, and to whom your assets or property should be transferred.
A living trust is also known as a revocable living trust, and is a legal document that allows the transfer of assets from a trust to your beneficiaries—without needing to go through probate court proceedings.
Note that everyone has unique needs when it comes to estate planning, and the above considerations are just some general guidelines for you to think about. It is most important that you reach out to Miller Estate & Elder Law to help you craft an estate plan that fits your specific situation and needs. Give us a call at 256 251-2137 or register for one of our free estate planning workshops.
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