If we have learned anything these past few years, it’s that life is fleeting. Amid such uncertain times, many of us have realized what – and who – truly means the most to us.
Estate planning allows you to reflect on your family, your priorities, and what actions you can take now to secure your future and that of your loved ones.
With proper estate planning, you can find the thoughtful support you need to make choices that best suit your specific situation. Be prepared for this new year.
Start by asking yourself these three critical questions …
1. What Life Changes Have I Experienced Over The Last Few Years?
Significant life changes are a good reason to assess if prior estate planning documents you have in place need to be updated.
Alternatively, if you have recently come into assets or inheritance and never had an estate plan, now is the time to put one in place. Consider the following examples.
- Seeing the final paperwork may have brought a sense of relief if you have gone through a divorce. But what if you have advance directives or a will that put your ex-spouse in charge of your affairs? Even when the appointment of an agent or beneficiary may be terminated by a divorce, you may have a situation where the ex-spouse could still raise issues or where no new agent has been appointed.
Your documents should be updated, whether a will, health care proxy, power of attorney, or other directives.
- Suppose one of your parents has recently passed away. You may now be the owner of new property or be in receipt of insurance proceeds, savings, or other funds. If something happens to you, what would you like to happen to these assets?
If you do not have a will or trust in place, it is wise to consult with an estate planning attorney to ensure your wishes are implemented, instead of leaving the decision up to your state’s default rules.
Many more life changes warrant evaluating whether an estate plan is right for you. Second marriages, the birth of a new child, or simply a change of heart as to who and what matters the most are all valid reasons to take a closer look at your current plan (or lack of a plan).
2. Has a Spouse Recently Passed Away?
The death of a loved one or spouse is one of life’s hardest moments. Although reflecting on their passing is very difficult, not doing so may adversely affect any inheritance you wish to leave to loved ones. If you and your spouse owned your assets jointly, this is a good time to consider establishing a trust and/or updating beneficiary designations, so that at your death, your assets do not require probate. If you and your spouse already had a trust, this is a time to consider whether any changes can or should be made. If you had significant assets, you will also want to determine whether there are estate tax decisions that should be made.
3. What Happens If I Become Incapacitated?
Another important matter to reflect on is what happens if you cannot make decisions for yourself. Instead of leaving your loved ones with the inability to act or an expensive court process to get the authority to act, you can execute a few simple documents now.
These documents are generically referred to as “advance directives”, but the terminology varies from state to state. They typically encompass three areas: power to act on your behalf to make medical decisions, power to act on your behalf to manage your personal affairs, and access to information. In Michigan, you will want to have a Power of Attorney, appointing an agent to handle financial and legal matters on your behalf, as well as a Patient Advocate Designation, appointing an agent to handle medical decisions for you, if you cannot do so.
Many people with adult children are nearing a point in their life where they may need someone to look out for them. Having effective documents in place can make it less likely you are taken advantage of by others when you are in a vulnerable state. It also makes it more likely that those who know you best can communicate your wishes and manage your care, should the need arise.
- A power of attorney can give a trusted child power to help you manage your bills, help you apply for Medicaid, help you downsize your home, and much more.
- A Patient Advocate Designation can tell doctors and hospitals who you want to make medical decisions for you.
- A HIPPA authorization can allow your children to remain equally informed about your health and ask medical doctors questions about your situation.
- Finally, you can explain in your Patient Advocate Designation what you would like to happen if a recovery is not possible.
A good way to look at the estate planning options discussed here is that they allow you to take control of the future and, once these decisions are made, put these worries behind you. The start of the year 2023 is a great time to sit down with your financial and legal advisors to make sure your estate planning documents are in good order. You may contact the office of Wenzel Bennett & Harris, PC at 989-356-6128 to schedule an estate planning consultation.