A lot of people think that estate planning is a one dimensional endeavor. You create a simple will, and that’s the end of the story.
In reality, a trust is a better option in some cases, and even if you will be using a will, there are other things to consider. Let’s look at four estate planning details that are often overlooked.
Letter of Last Instructions
Stating your intentions in writing is one thing, but you should also consider the situation that the executor will be in after your passing. For example, let’s say that you will be leaving a classic car to your grandson. Where is it located? Where are the keys? Are there any other important details?
This is just a very simple example, but there is a lot of information that the executor will need to be able to properly administer the estate. You can provide it in a letter of last instructions.
The letter should list the people that should be notified about your passing, and you should provide contact data. Practical info about tangible items should be shared along with access to financial account documentation.
This obviously applies to hardcopies, and you should provide login information for accounts that you manage online. Along these lines, if you have social media accounts, websites, a blog, etc., you should let the executor know how you want them to be handled.
Your letter could also explain your wishes with regard to the specifics of your final arrangements. These are some things to think about, but there is common sense involved. Ask yourself what the executor will need to know, and act accordingly.
Incapacity Planning Documents
There is more to the estate planning process than the financial part of the equation. This is not a pleasant subject, but many people become unable to make sound decisions toward the end of their lives.
Cognitive impairment strikes a very significant percentage of elders, and physical medical conditions can make it impossible to communicate. You should account for these eventualities when you develop your estate plan.
A living will should be executed to state your preferences with regard to the use of life-sustaining measures like artificial nutrition and hydration, cardiopulmonary resuscitation, and mechanical respiration. Your living will can also include comfort care medication and organ and tissue donation choices.
You can name an agent in a durable power of attorney for health care that would be empowered to make medical decisions on your behalf if it ever becomes necessary. These would be situations that are not directly related to the utilization of life support.
A very important document that can certainly fly under the radar is a HIPAA release. This acronym stands for the Health Insurance Portability and Accountability Act.
There is a provision contained within this measure that prevents doctors from sharing medical information with anyone other than the patient. Your incapacity plan should include a HIPAA release to give your health care agent the ability to speak freely with your physicians.
Successor Beneficiary and Executor Designations
You can name a beneficiary for individual retirement accounts, life insurance policies, and other types of accounts. Many people just fill in the blanks, and they do not think about the possibility of the primary beneficiary passing away.
To account for this, you should make sure that you add successor beneficiaries to all of these documents.
The same dynamic applies to the executor that you name in your will. You can name a successor executor to assume the role if it becomes necessary.
The last little detail that we will look at here is not universally applicable, but it does impact a significant percentage of people. If there is a chance that you will predecease your pet, you should account for this when you are developing your estate plan.
You can create a pet trust to make sure that sufficient assets are set aside to satisfy the pet’s needs. The trustee that you name in the document would be compelled to follow your instructions with regard to finding an appropriate home for the pet if it becomes necessary.
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