Some people adopt a very simplistic perspective when it comes to estate planning. They think that you create a will at some point when you are old and gray, put the document away for safekeeping, and you forget about the matter.
Unfortunately, this is done all too often, but this is a final act of giving to the people you love the most. If you do the bare minimum and hope for the best, your family members may have to deal with some negative consequences.
This is one part of the equation, and it can be quite satisfying to carefully craft a legacy plan with your heart in the right place. A proper plan will address all of finer the details, and in this post, we are going to look at three points that are sometimes overlooked.
Successor Beneficiary Designations
When you fill out paperwork associated with individual retirement accounts, life insurance policies, and certain types of financial accounts, you name a beneficiary, or multiple beneficiaries. You may also be able to stipulate the percentage that will be transferred to each beneficiary.
In a lot of cases, an administrator will guide you through the document signing without mentioning the concept of a successor beneficiary. As the term would indicate, the person you name would assume the role upon the death of the primary beneficiary.
If you leave this section blank, a tangled web could ensue if something happens to the primary beneficiary, so you should cover this base. You should also review your primary beneficiary designations from time to time to make sure that the choices that you made reflect your current mindset.
Letter of Final Instruction
You name an executor to handle the estate administration tasks when you have a will, and the administrator would be a trustee if you have a trust. The administrator will be in the dark if they are not given all the information they need.
With this in mind, a letter of final instruction should be part of your estate plan. In this letter, you provide the necessary practical guidance.
It is basically a matter of common sense, but a standard letter will start with contact information for the people that should be notified about your death. You should go on to let the executor or trustee know where to find all of the hard copy documents that they will need.
Access to property, vehicles, storage spaces, etc. should be provided, and you should pass along login information for accounts that you manage online. You should let the executor know how you want your social media accounts, blogs, and websites handled.
You can leave specific instructions with regard to the specifics of your final arrangements, and if you have made them in advance, you can share the details in the letter.
Advance Directives for Health Care
Your estate plan should include documents called advance directives for health care, and one of them is a living will.
Doctors can sometimes keep people alive indefinitely through the use of artificial life-sustaining methods, and different people have different ideas about these situations. You can record your life support preferences in a living will.
The other directive that should be part of the plan is a durable power of attorney for health care. This document is used to designate an agent that would be empowered to make medical decisions on your behalf if you become unable to make them yourself.
This directive is a must, but it is just one half of the solution, because physicians would not be able to discuss your condition with your agent due to federal privacy laws.
To provide access, you should include a HIPAA release. This acronym stands for the Health Insurance Portability and Accountability Act that was enacted in 1996.
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We have many resources on this site and you can access free of charge, and one of them is our estate planning worksheet. If you take the time to go through it, you will gain a more thorough understanding of the process, and this will help you avoid oversights.
To get your copy, visit our Cincinnati estate planning worksheet page and follow the simple instructions.