Estate planning is sometimes reduced to the execution of a simple will, but there are some other details to take into consideration.
If you want to make sure that all your bases are covered, you should take a more comprehensive approach. With this in mind, we will look at some frequently overlooked components in this post.
Letter of Last Instructions
The executor is the administrator when a will is used, and a trust is administered by a trustee. Leaving instructions with regard to the way you want the assets to be distributed is one thing, but they will need additional information to complete the tasks.
You can share it in a letter of last instructions. There is no particular set of rules that must be followed, and the letter would not be legally binding. The idea is to give them access to property and documents that will be needed during the estate administration process.
This would include login information for accounts that are managed online. They should also have contact information for the people that should be notified about your passing, like your accountant, your attorney, and your insurance agent.
Incapacity Planning
Though it is not a very pleasant subject to ponder, the hard truth is that a very significant percent of seniors will become unable to handle their own affairs. Alzheimer’s is common among the oldest old, and there are other causes of cognitive impairment.
In addition to this form of incapacity, some people that are physically ill do not have the strength to handle their financial and personal decision-making responsibilities.
If you do not take steps in advance to prepare for possible incapacity, the state could appoint a guardian to act on your behalf. You can prevent this if you embed an incapacity component within your broader estate plan.
For health care decision-making, you will use advance directives for health care. You can record your life support preferences, comfort care medication choices, and organ and tissue donation designations in a living will.
Medical scenarios may unfold that are not related to life-support utilization. To account for this eventuality, you can name a representative to act on your behalf in a durable power of attorney for health care or health care proxy.
The Health Insurance Portability and Accountability Act (HIPAA) was enacted in 1996. Medical information was being shared too freely, so certain safeguards were installed via this measure.
A provision contained within it prevents doctors from revealing health care information to anyone other than the patient. Because of this restriction, you should sign a HIPAA release to give your health care agent access to your medical records.
When you compare the benefits of a living trust to the limitations of a simple will, you may decide that a living trust is the ideal estate planning centerpiece. One of the advantages is the ability to prepare for incapacity.
You would act as the trustee while you are alive and fully competent. In the trust declaration, you can name a disability trustee to assume the role if it ever becomes necessary.
To account for property that is not held by a trust, you can add a durable power of attorney for property to name an agent to handle this property. If you have a living trust trustee, you would probably use the same person to assume both roles.
Successor Beneficiary Designations
An important detail that is often overlooked is the inclusion of successor beneficiary designations.
You should add successors to your estate planning documents that would replace the original beneficiary or beneficiaries upon their passing. This would also apply to life insurance policies and individual retirement accounts.
We Are Here to Help!
Our doors are open if you would like to work with a Rochester, NY estate planning lawyer to put a custom crafted plan in place. You can send us a message to request a consultation appointment, and we can be reached by phone at (585) 374-5210.
