Paule, Camazine & Blumenthal, P.C. posted in Estate Planning on Wednesday, January 06, 2016.
By: Melissa Nolan
Many people assume that “estate planning” is only for the wealthy. That notion is a misconception and could make life very difficult for you and your family members in the future. Regardless of the amount of your wealth, there are a few relatively simple estate planning steps that everyone needs to take.
First, everyone should have a durable power of attorney for finances. Many people believe that a durable power of attorney is only for the elderly. While that population certainly should have an up-to-date power of attorney, younger people also need this document. A young adult is far likelier to become incapacitated or impaired through some sort of accident or illness than to die. A durable power of attorney will ensure that your finances are taken care of if, for any reason, you are unable to make your own financial decisions. The person you name in your durable power of attorney does not need to be an expert in finances or tax. Instead, you simply must trust that individual to act in your own best interest and to hire the services of a professional if it becomes necessary.
Every person regardless of wealth also needs to have a power of attorney for healthcare, which is sometimes called a “living will.” This document describes your wishes regarding life-sustaining care and designates a person to make medical decisions for you in the event you are not able to express your own wishes. Again, many people assume that this document is only for the elderly. However, if you do not have this document in place, you are taking a risk that in the event you do need someone to act on your behalf, the wrong person will be making the wrong decisions for you. Perhaps even worse, without such a document, the doctors or hospital will not recognize the power of anyone to make medical decisions on your behalf. Many people have very strong opinions about their medical care and without a healthcare declaration or a power of attorney for healthcare, no one will be able to advocate for you.
The third estate planning step everyone needs to take is to review and update beneficiaries on life insurance, retirement accounts, and all other financial accounts. You can leave assets to your beneficiaries without putting in place a will or a trust and without relying upon the probate court system to distribute your property by having valid beneficiary designations in place for each account. However, a beneficiary designation is not something that you can put in place once and never look at again. As your life circumstances change, your wishes regarding who you want to receive your assets upon your death likely will change too. As you get married, have children, or a beneficiary predeceases you, the individuals you want to name as beneficiaries on your accounts might change. A person you previously named as a beneficiary may develop special needs and no longer be able to handle money. You need to review your beneficiary designations on a regular basis to ensure you do not inadvertently leave property to people you no longer wish to benefit and you must ensure that you always have a valid beneficiary named on every asset to avoid probate administration.
Regardless of the size of a person’s estate, there are relatively simple estate planning steps which you can take to protect the quality of your life and the lives of your family members. For assistance or further explanation about any of these steps, please contact the estate planning attorneys at Paule, Camazine & Blumenthal.