Author: Michele Braverman

Pets sometimes outlive their owners. If you suffer an accident or illness, it could leave your cat, dog, horse, iguana, or any other pet without a caregiver, which, without proper planning, could result in your beloved pet being sent to an animal rescue or shelter that is not of your choosing. Take a few steps to protect your beloved pet’s future and ensure they are always cared for, no matter what happens. 

1. Carefully Choose a Pet Caregiver

Talk to more than one trusted person until you find someone willing to physically care for your pet if something happens to you. If you have more than one candidate, select one as your backup in case circumstances change—a caregiver can move, change their mind, or pass away. Caregivers must have the right environment to receive your pet and accommodate their daily needs. 

1. Create a List of Emergency Contacts

Just like people, pets likely have professionals that should be called in an emergency. This can include their primary veterinarian and any specialist they may be seeing. You may also want to include the contact information for any boarding facilities you have used in the past or petsitters that come to your home when you cannot take your pet with you.

1. Create a List of Your Pet’s Medications

Like people, some animals need medications to cure a temporary illness or supplements to manage a chronic condition. It is important that you have a list of these medications and times when they are administered to make sure that whoever is caring for your pet is prepared to administer them.

1. Create a Budget for Your Pet’s Needs 

Your checklist should include monthly or annual expenses for your pet, including the following:

• Regular pet food purchases 
• Treats 
• Recommended supplements or vitamins 
• Routine veterinary checkups and vaccinations
• Preventive medications (flea, tick, heartworm)
• Dental cleanings and care
• Prescription medications for chronic conditions or illnesses
• Haircuts or professional grooming services
• Litter, litter boxes, waste bags
• Toys and enrichment items
• Pet insurance premiums
• Boarding
• Training or obedience classes
• Travel expenses
• Licensing

Developing this budget will help you estimate costs that a caregiver may have to shoulder or allow you to set aside an appropriate amount of money in your estate plan (either outright to the caretaker or in a pet trust) to cover expenses for your pet’s expected lifetime based on age, health, and breed.

1. Research Local Shelters

Although you do not want your pet to end up in a shelter if something happens to you, it is important that you plan for all contingencies. By researching local shelters and pet rescues, you can take control of your pet’s future by knowing which one would be acceptable in the event your family or friends cannot take your pet. This is a decision that we can document in your estate plan so that your trusted decision-makers know your wishes.

1. Contact an Estate Planning Attorney

Armed with a detailed list of expenses and critical information, you will be prepared to share it with potential pet caregivers if you experience a medical emergency and can no longer care for your pet. The best way to do this is with legal documentation. Take this information to an estate planning attorney to create a will or pet trust with a letter of instruction for your pet caregiver. Let your pet caregiver know you have a will naming them the beneficiary of your pet or as the trustee of a funded pet trust to help them with caretaking expenses. Give them the name and contact information of your executor, trustee, and estate planning attorney so they can access a copy of your documents when necessary.

If your pet outlives you, a trusted caretaker will have what they need to ensure a loving environment. By taking the right steps, you will be helping your family members, friends, or local pet welfare agencies provide the best possible care for your pet. If you need to update your existing estate plan or create a new one to provide for your beloved bet, give us a call to schedule an appointment.

If you have a severe illness or accident or pass away, who will you trust to look after your pet? There are many ways to ensure your pet continues to have a loving home.

Guardian of Your Minor Children

If you also have minor children, the nominated guardian of your minor children can be a good first choice to take care of the family pet. The guardian is already taking on the large responsibility of caring for your children, so they may also be willing to take care of your pet. In addition, having the beloved family pet stay with the children may comfort them during a difficult time in their lives. It is important that you discuss this with your nominated guardian to ensure that they are willing to undertake the additional responsibility.

Family or Friends

When selecting a caregiver for your pet, most people look to a trusted family member or friend who may be willing to care for them. This person has probably spent time with your pet and already knows their typical routines and behaviors, making them more comfortable taking on the responsibility. This choice may also provide your pet with a familiar environment. However, taking on a new furry family member is a big responsibility that requires some considerations:

• Does their lifestyle, home, and comfort with pets make them a good fit for caregiving? 
• Do they already have other pets? If yes, do they get along with each other?
• Do they understand the expectations and level of care that the pet requires? 
• Are there specific instructions or preferences they may not be able to accommodate?
• Can they afford the financial responsibility of supporting a pet?

Animal Welfare Organizations

In some instances, animal welfare organizations such as shelters, rescue groups, sanctuaries, or foundations can take your pet and find a suitable home. Look for reputable organizations in the area and visit them to assess their cleanliness, staff interactions with animals, and overall environment. The organization must provide a safe and comfortable space while locating a loving permanent home. You should also consider whether this organization euthanizes pets that are not adopted and whether that plays into your choice of organization. Creating a comprehensive profile of your pet, including their medical history, behavior, preferences, and any special needs, with photographs and videos of the pet, could make the adoption process easier for the organization.

Executor’s or Trustee’s Choice

Depending on your situation, you may feel more comfortable with giving the person who winds down your affairs (the executor or trustee) the authority to choose the most suitable home for your pet. Because things can change unexpectedly, providing this level of flexibility can help ensure that your pet goes to a suitable, loving home, even if it is not a home that you initially considered.

Make Your Wishes Known in Your Estate Plan

By proactively planning, you can make financial and care arrangements for your pet’s care well in advance, making the transition easier on everyone involved. 

Once everything is clearly documented for your pet’s care in either a will or trust, you must keep your legal documents and any other pertinent information easily accessible to the designated caretaker and ensure it is kept up to date. Let family members, executors, or trustees know the location of any necessary documentation to care for your pet.

Make sure you review your estate plan annually for any changes in your circumstances, your pet’s health, behavior, routines, or preferences. We are available to help you if you are having trouble selecting the right pet caretaker or want to discuss the best way to protect your pet. Give us a call to schedule a time to discuss ways we can protect your beloved pet.

Ways to Provide Money to Care for Your Beloved Pet

As of 2023, 66 percent of US households own a pet. A Forbes Advisor survey of more than 5,000 dog owners found that 41 percent of dog owners spend between $500 and $1,999 a year on their dogs and 8 percent spend more than $2,000 annually. In addition to the annual cost of care, there is always the potential for emergency veterinary care, which can be costly. As a pet owner, you may have concerns about what would happen to your pet if you die or were unable to make decisions or care for your pet. There are several options to ensure that money will be available so your beloved furry family member will continue to receive the same level of care and support that you have always given them.

You will want to evaluate the weekly, monthly, and annual costs associated with your pet’s needs. This process will help you determine a specific amount required to cover your pet’s anticipated lifetime expenses.

Lump Sum to the Caregiver

One option to financially provide for your pet is to give a lump sum to the person you choose to care for your pet at your death. This option is the easiest to carry out and does not involve any ongoing administration or oversight. However, because the money goes directly to the caregiver, there will be no one monitoring the use of the funds. You must trust that the caregiver will use the funds for the pet’s benefit.

Pet Trust With the Caretaker as the Trustee 

This approach to planning for a pet is a little more complicated than just giving money to the caregiver. In this scenario, money would be set aside in a trust specifically to care for your pet. There may be administrative requirements that the caretaker, as trustee, must do, such as submitting an accounting of the trust’s income and expenses to a specified person. Despite these requirements, this approach does provide some flexibility because the caregiver and the trustee are the same person, meaning that a third party does not have to be consulted before expenses are paid or the caregiver is reimbursed for out-of-pocket costs. It is important to note that with one person serving in both roles, there is still a risk that funds may not be spent appropriately on the pet without oversight by a third party. 

Pet Trust With Separate Parties Serving as Caretaker and Trustee

The final option provides the maximum protection for the money set aside for the pet. The pet trust will contain funds to care for the pet, but the caretaker will need to work with the trustee to gain access to the funds in the trust. The trustee can ensure that the money is being used for the pet. This may be a wise option if you have animals that cost a lot to care for such as horses or exotic animals, because the amount necessary to care for them could be more than you feel comfortable handing over to someone without any oversight.

Make Sure Your Plan Stays Up-to-Date 

By proactively planning for your pets, you can ensure that they are cared for and supported if you cannot do so yourself. If you already have an estate plan that provides for your pet, an annual review of your estate planning documents can address changes in circumstances, such as acquiring additional pets, an increase in your pet’s needs, the designated caregiver’s situation, or your finances.

Your Legacy: How Do You Want to Be Remembered? 

As Thomas Campbell, physicist and the author of My Big TOE, once said, “To live in the hearts we leave behind is not to die.” When we lose a loved one, we often have memories of special events and occasions, support they provided us, or specific qualities of that person we will never forget. An epitaph, by definition, is a brief phrase or sentence expressing a sentiment, often inscribed on a tombstone. Epitaph Day is a symbolic event dedicated to the contemplation and creation of our desired epitaphs. It is a gentle and meaningful reminder of the impermanent nature of life and the importance of having a plan for the future.  

An Estate Plan Can Help You Be Remembered

In the rush and routine of daily life, it can be easy to postpone essential matters like estate planning. Although Epitaph Day has recently passed, now is a great opportunity for you to pause and consider the importance of ensuring that your wishes, the things you own, and your legacies are handled according to your preferences after your departure from this world. You may be surprised to learn more about the ways that you can incorporate your own desired epitaph into the planning process. 

A Trust Can Help You Guide Your Loved Ones

While it is true that a trust is a valuable estate planning tool, it is much more than that. A trust can memorialize your values and aspirations for your loved ones. By incorporating provisions that incentivize your beneficiaries to pursue an education, hone a new craft, contribute to the community through volunteering, or even embark on entrepreneurial ventures, you can craft a legacy of encouragement, motivation, and support. Your trust can become a continuation of your presence, guiding your beneficiaries in ways that align with your wishes and vision for their future. 

A Trust Keeps You Part of Memorable Experiences

For those who cherish experiences and the creation of lasting memories, it can be invaluable to incorporate clauses within your trust that allocate money specifically for ventures like traveling, exploring new places, or even family reunions and celebrations of important events. These provisions not only facilitate experiences but also foster a deeper connection, ensuring that your family bonds remain strong even in your absence. 

A Trust Can Provide Monetary Support

Your estate plan is a powerful tool that can reflect your dedication and commitment to the well-being and success of your loved ones. If you have financially supported others in your lifetime, your estate plan offers you an opportunity to define and detail the nature and extent of your continued monetary support. Through meticulous planning, you can be remembered not just for the wealth you have accumulated but also for the love, care, and foresight indicated by your plan. 

Now Is the Perfect Time to Start Planning

Epitaph Day creates an opportunity for you to proactively engage in the estate planning process and provide yourself with both peace of mind as well as clarity and ease for your loved ones in the future. This can help ensure that your desires, whether about asset distribution, funeral arrangements, or messages to your loved ones, are clearly articulated and legally secure. 

Let us help you embark on the crucial journey of estate planning, ensuring that your legacy is honored and that your loved ones are spared unnecessary difficulties in honoring your life and wishes for the future. 

The Real Story Behind Trust Fund Kids 

When we hear the phrase “trust fund kid,” words like “entitled,” “privileged,” and “financially irresponsible” might come to mind. But another word we should associate with “trust fund kid” is “protected.” 

What Is a Trust Fund Kid?

According to a Forbes article published in 2021 about trust fund kids, three of the most common misconceptions are that trust fund kids all come from ridiculously rich families, they have it easy, and everyone who has serious money must have a trust fund. While these misconceptions may apply to some trust fund kids, it does not apply to the majority. The reality is that a trust fund kid does not necessarily live a life filled with lavish trips, designer clothes, and expensive cars—they are simply a young beneficiary of a trust. When most people hear the word “trust,” they envision an endless pot of money freely accessible to the beneficiary. Trusts are created for a variety of reasons, however, and are not just planning tools that benefit the ultrawealthy. 

Why Do Trust Fund Kids Have Such a Bad Reputation? 

This bad reputation stems from a fundamental misunderstanding of trusts and the benefits they can provide. The existence of a trust often indicates that an individual has taken the time to plan for the future of their children or loved ones, and instead of deciding to leave money to these individuals outright with no protections or conditions, they have decided to protect those funds. Whether the amount held in trust is millions of dollars or far less, trusts can be structured to ensure that the money lasts, is used for specific purposes, or even is held for the future benefit of children or loved ones. Added benefits of utilizing a trust are privacy, as trusts are not usually filed with a court and therefore are not subject to the public eye, and avoiding the probate process, which in some cases can be costly and time-consuming. 

Preventing the Negative Consequences

Limit Control

After learning more about the real story behind trust fund kids, you may be curious and want to explore the positive ways a trust could benefit your own children or loved ones. To avoid the negative stereotypes surrounding trust fund kids, you will want to consider how much control you would want them to have over their own trust. Granting too much control could lead to uncontrolled spending or unreasonable purchases. 

Make Your Beneficiary Earn Their Inheritance

You may want to avoid the perception that your children or loved ones have it easy and should therefore consider building in provisions that will require them to “earn” portions of their trust. This structure can incentivize your children or loved ones to achieve more by reaching certain milestones such as completing postsecondary education, finishing trade school, serving in the military, or starting a business. You can elect to have the trustee purchase certain assets, such as a home, in the name of the trust to ensure that the assets are provided to your children or loved ones, while the trustee is responsible for ensuring that they are properly maintained and not sold on a whim. 

Consider Loans Instead of Outright Gifts

You have worked hard to build your wealth and want to leave protected funds that can benefit your children or loved ones in a different way. There are many wealthy individuals who do not want to leave money to their children or loved ones because they believe it may disincentivize them to pave their own way. As it is, the majority of young adults do not have the ability to obtain financing with favorable terms on their own. For those of you who want to provide a more conservative form of support, you can allow your trust to provide favorable loans to your children or grandchildren that they will have to pay back with interest, allowing the principal to grow for future generations. 

We Can Help You Avoid the Downsides of a Trust Fund Kid

Although being a trust fund kid often has negative connotations, by working with an experienced estate planning attorney and exploring the positive aspects, you may want to make your own children or loved ones trust fund kids. We can help educate you further about how a trust can benefit you, protect your children and loved ones, and provide a way to support them in the future. 

Assembling Your Own (Estate Planning) Team

Some of us may enjoy games like fantasy football that allow us to assemble our own star team with the players we think will provide the most value. While fantasy football is fun to participate in, have you ever given thought to the importance of establishing your own dream team? Just like in fantasy football, each player has their own strengths and addresses a different part of the game that leads to the team’s overall success. Consequently, it is no secret that having a solid team of quality professionals allows us to ensure that all aspects of our future can be planned for. It can take an entire team, all with different strengths, to successfully plan for life’s foreseen and unforeseen events. Working with quality professionals enables you to ensure that you are creating the best possible comprehensive plan and that it is done the right way.

With a proper team of professionals, you can feel secure, knowing that all facets of your future are being considered when your team collectively strategizes the best structure to adequately address your finances, family dynamics, business ownership, insurance needs, and tax considerations, all while achieving the end goal of promoting family harmony.

Who Should Be on Your Team?

Estate Planning Attorney

In the intricate game of estate and legacy planning, an estate planning attorney often assumes a role similar to that of the quarterback, directing and coordinating the team’s strategies to achieve your desired outcomes. Their expertise allows them to create a plan that ensures that your money and property are protected, your loved ones are provided for, and your wishes are upheld, even beyond your lifetime. Our role is not limited to establishing wills and trusts—we have the ability to foresee common challenges, preserve family harmony, and ensure seamless transitions during life’s unpredictable events through comprehensive planning. Just as the quarterback anticipates opponents’ moves and directs the team accordingly, we can foresee legal challenges and ensure that all components of your plan for the future work harmoniously. 

Financial Advisor

Engaging a financial advisor as part of your team can be an investment in clarity and strategic financial management and growth. With the ever-changing economic landscape, navigating the financial realm can be daunting for both novices and more seasoned investors alike. A financial advisor can utilize their expertise to tailor strategies that align with your unique situation and future goals. Having a financial expert dedicated to your financial well-being allows for a proactive approach to wealth management, ensuring that potential opportunities are optimized and pitfalls are avoided. In essence, a financial advisor is not just a valuable team member but a cornerstone for a sound financial future, helping you build, preserve, and optimize your wealth for success.

Insurance Agent

Enlisting an insurance agent as part of your team is important to protect you and your loved ones against unforeseen events. An adept insurance agent can help you navigate which insurance is most appropriate to ensure that you are protected and prepared. Insurance agents can often use their industry experience to tailor recommendations based on your specific needs and circumstances. Beyond assisting you in selecting appropriate policies, a good insurance agent can help educate you about your coverage and explain sometimes complicated policy terminology. In a world filled with uncertainties, an insurance agent is a valuable team member, helping you strategically secure not only your accounts and property but also your peace of mind.

Tax Professional or Certified Public Accountant

Incorporating a tax professional or certified public accountant (CPA) into your team is a strategic move to ensure financial prudence and compliance. The complexities of tax codes, regulations, and deductions can be overwhelming, and even minor oversights can result in significant financial implications or potential penalties. A seasoned tax professional or CPA does not simply crunch numbers; they provide invaluable counsel, leveraging their expertise to optimize tax strategies, identify potential savings, and ensure accurate and timely filings. Beyond your annual tax needs, a tax professional or CPA can offer you year-round guidance, helping both individuals and businesses make informed decisions that align with both immediate needs and long-term goals. Ultimately, a tax professional or CPA is your safeguard against costly mistakes and the team member that can help protect your financial health. 

Spiritual Advisor

A spiritual advisor has the potential to serve as your team’s anchor amid life’s chaos. They can offer you guidance on important questions and inner challenges, helping you navigate the world and connect with deeper purposes. In a world that can often be focused on material pursuits, your spiritual advisor can help realign your focus with core values and holistic well-being.

Business Advisor

Lastly, a business advisor can serve as a valuable team member. In the complex world of business, where the market and strategies are consistently evolving, this team member can bring a wealth of expertise, fresh perspective, and objective analysis to your business. Their insight can serve to protect your business from costly mistakes and help formulate strategic plans that align with your business’s short- and long-term goals. Overall, a business advisor can ensure that your business is properly structured and optimized for success.

We Can Help

You may have already assembled your dream team, or there may be positions that still need to be filled. We are happy to assist you with your estate planning needs and provide you with referrals to quality professionals to finalize your team. 

Top 3 Reasons You Need an Up-to-Date Estate Plan

Although we live in a world where information is easily accessible through the internet, there are still many misconceptions surrounding estate planning. Most of us do not dedicate our time to learning more about topics like estate planning, because we may not know that we need an estate plan or realize the benefits associated with having one. There are some common beliefs you may have about estate planning that may be inaccurate: that having a will avoids probate, being married means everything a spouse owns goes to their surviving spouse, and a person does not need an estate plan if they own few assets. Education on the importance of an estate plan is key to saving the time, money, and heartache that can be associated with lack of planning. Take the time to understand the importance of having an up-to-date estate plan and learn how it not only contemplates what happens after your death, but also protects you and your loved ones if you become incapacitated. 

While there are many reasons to establish and update an estate plan, we are going to focus on three.

Reason # 1: An estate plan lets your loved ones know what you want.

People tend to avoid thinking about death and dying and do not discuss these topics with their loved ones. While these topics often evoke strong emotions, it can be important to discuss with your loved ones several aspects of what you want to happen after you die. They may not know what steps to take when faced with loss and grief over your death. You should provide the important people in your life with up-to-date guidance through your estate plan, and in turn reduce any confusion or additional stress following your death. This is especially important if you have had any major changes in your life such as the birth or death of a loved one.

By having an up-to-date, comprehensive estate plan, you can decide and communicate what you want to happen with your money and property, but also make important decisions regarding the care of your minor children and pets and your own final arrangements. There are many benefits of conveying your wishes to your family through an up-to-date estate plan. There may also be appropriate strategies and documents for your particular family structure that you may not be aware of that can provide you and your loved ones with extensive benefits.  

Reason # 2: An estate plan is a legally enforceable way to carry out your wishes.

You may think you do not need to memorialize your decisions about what will happen to your property after you die because you are confident that your loved ones will follow your wishes. However, it is hard to predict what will happen in the future, and when faced with financial difficulties, your loved ones may act differently than how you had hoped. For example, while you may think that adding a child to the title of your real property or bank accounts will protect you in the event of incapacity and avoid probate, doing so creates significant risks. Adding a child to your property grants them an ownership interest in that property, and when you die, your child will be the sole owner and can do whatever they want with that property. This could result in your child preventing siblings or other intended beneficiaries from sharing money or property after your death without recourse. Keep in mind that a child may do this out of what they perceive as necessity due to financial struggles or other issues. While this is only one scenario, this is an example as to why creating an enforceable estate plan with an experienced estate planning attorney will make sure that all you have worked so hard for will end up going to who you want without conflict. 

Reason # 3: You get to choose what happens.

You may be hesitant to meet with an estate planning attorney to establish or update your estate plan for a variety of reasons, including a lack of education on the benefits of up-to-date estate planning. It is important to know that if you do not create your own plan or if your estate plan does not cover everything, the state has its own plan. The default estate plan, known as a state’s intestate statute, that controls the distribution of your money and property may not align with your wishes. The state’s plan will not take into consideration your unique relationships and family structure. If you are part of a blended family, a parent of minor children, a business owner, or part of an unmarried couple, you should strongly consider the consequences of not establishing a plan. 

An estate plan can protect you from the consequences of incapacity that can occur as a result of an accident, injury, or illness. Without a plan, you could be faced with a court-supervised conservatorship or guardianship, in which the court will delegate the control of your person and property to a person whom you may not have chosen or would not want to serve in this capacity. As part of your estate plan, you can choose who can act on your behalf in the event of incapacity and avoid court involvement and the difficulties associated with it. However, it is important that you review your documents periodically to make sure that the people you have chosen to make sensitive decisions for you are still the people you want to do so.

Everyone should have a choice in their future. A qualified estate planning attorney can help you create a plan that illustrates your wishes. If you or your loved ones have any questions about creating or updating an estate plan, please give us a call.

Estate Planning Roll Call: Important Legal Tools You Should Have

As with any roll call, it is important to make sure that everyone is present and accounted for. Similarly, when assessing an estate plan, several legal tools, or documents, should be in attendance to accomplish the goal of a complete and comprehensive plan. You have likely heard the term estate planning, but you may not be familiar with which legal tools typically comprise a complete estate plan. We want to teach you about the legal tools that should be included in your plan and what benefits and protections each legal tool can provide.  

Will or Revocable Living Trust

As with many other structures, a well-rounded estate plan must be built on a solid foundation. To establish a foundation for an estate plan, the use of either a will or a revocable living trust (trust) is necessary. Wills and trusts are legal tools designed to direct and control the distribution of money and property that you own. While a will can only provide direction at death, a trust has the added benefit of providing direction in the event of your incapacity during your lifetime, as well as upon your death. Consequently, there are multiple considerations that go into whether using a will or trust as a foundational tool makes the most sense for your situation. 

Will

A will as a foundational legal tool often requires that your property go through the probate process upon your death, although certain accounts and property can be transferred outside of probate through the use of beneficiary designations or if the account or property is jointly owned with a right of survivorship. Probate is the court-supervised process in which everything you own is transferred to your loved ones (also known as beneficiaries, or heirs if you do not have a will) at your death. In your will, you elect an individual to be in control of carrying out your wishes and state who gets your accounts and property at your death. This person is commonly known as the executor, executrix, or personal representative. Prior to being able to carry out your wishes, they must be formally appointed by the probate court. It should be noted that some states have restrictions on who can serve in the role of executor, executrix, or personal representative. It is very important that you meet with an experienced estate planning attorney to understand who to elect to serve in this role, as choosing the wrong individual can result in unnecessary delays.  

Trust

Alternatively, the use of a trust as a foundational estate planning tool can allow you to avoid the probate process. However, a trust can only avoid probate when bank accounts and property that you own are retitled (also called funded) into the trust prior to your death or transferred to your trust at your death. Additionally, trusts have the added benefit of protecting your accounts and property that are part of the trust if you become unable to manage your own affairs. 

You may be surprised to find out that even when utilizing a trust as a foundational legal tool, you still need a will. The type of will used in conjunction with a trust differs from a standalone will. Instead, a pour-over will is used, which essentially “pours” into the trust any accounts or property that were not titled in the trust at the time of your death. While a pour-over will ensures that accounts and property not funded into your trust during your lifetime are funded at your death, it also provides other essential benefits. A will allows you to nominate a guardian for your minor children and pets and direct your funeral arrangements (in some states). 

A testamentary trust is another tool that may be appropriate for you in certain circumstances. The terms of the trust are stated in a will during your lifetime and the trust is created upon your death. Like with a revocable living trust, you can customize the provisions that control the distribution of money and property through the trusts. However, this type of trust is created during the probate process.

There are a variety of considerations that go into whether a will or trust is the right foundational tool, which is why it is best to speak with an experienced estate planning attorney to help ensure you choose the right one for your unique situation. 

Financial Power of Attorney

You have likely heard the term power of attorney before. However, you may not realize that each financial power of attorney and the level and type of authority granted within it varies based on its contents. These legal tools can often be customized to accomplish specific goals, but may have some limitations depending on state law. It is helpful to first understand the roles within a financial power of attorney. The person who creates it is known as the principal, and the person who receives the authority through it is the agent. An agent’s role is to act as a fiduciary and on behalf of the principal for a variety of purposes. 

Under a limited power of attorney, the agent is limited to performing very specific duties, such as executing a deed for a real estate transaction or transferring a vehicle. On the contrary, a general power of attorney allows the agent to step into the principal’s shoes and manage almost all aspects of their finances and property ownership to the extent of what is allowable under state law.

A financial power of attorney can take effect immediately (or as soon as the agent has officially accepted the role) or it can be springing. A springing power of attorney requires that a certain event occur before the agent can exercise their power. This is usually upon the declaration that the principal can no longer act for themselves. It is important to note that not all states allow for a springing power of attorney.

Lastly, there is a durable power of attorney. A durable power of attorney lasts through the principal’s incapacity, making it crucial for being able to grant someone authority to act for you if you cannot act for yourself. 

Medical Power of Attorney

Our health and the way we manage it is largely dependent on our own beliefs and preferences. If you are unable to make your own medical decisions, you would likely want to make sure that the person making them for you is someone that you trust and who would follow your wishes. To have this control, your estate plan should include a medical power of attorney. A medical power of attorney is known by several names depending on what state you are in, such as a healthcare power of attorney or a designation of health care surrogate. You will designate an agent and several backup agents in your medical power of attorney to act on your behalf if your first choice is unavailable. You may be able to choose to delay the effect of the authority granted until incapacity if your state’s law allows. 

Advance Directive

A comprehensive estate plan will also include an advance healthcare directive, also commonly known as a living will. An advance directive serves the important purpose of allowing you to decide what forms of end-of-life care you would like. Within this legal tool, you can memorialize your wishes as it relates to being placed on life support if you are in a persistent vegetative state or diagnosed with a terminal illness with no probable chance of recovery. This legal tool is commonly confused with a do not resuscitate order, which is not part of an estate plan and instead is typically filled out at the hospital and applies specifically to resuscitation. 

HIPAA

Health Insurance and Accountability Act of 1996 (HIPAA) authorizations allow an individual to designate who the hospital or medical facilities can provide medical records and information to. These authorization forms became necessary following the enactment of the federal Health Insurance and Accountability Act of 1996, which provides guidelines to the healthcare industry for the protection of patient information. This is an important legal tool to have if you have multiple individuals who are not nominated under your medical power of attorney that you would like to have access to your medical information in the event of illness or injury. While these individuals will not have decision-making authority, they will be able to stay informed about your medical condition. 

Appointment of Guardian

Planning for children is a high priority for parents. There are some states that have a separate legal tool for naming guardians of minor children. While a lot of states allow you to include this information in your will, it is important for you to meet with an estate planning attorney who can create a standalone tool if it is appropriate within your state of residence. 

Temporary Guardianship or Delegation of Parental Powers 

There are circumstances in which you may not be able to be with your children, commonly due to extended travel. This can be an appropriate circumstance for you to name a temporary legal guardian to make decisions on behalf of your minor child while you are unable to do so. There are state-specific guidelines for the length of temporary guardianships in addition to other limitations as to how and what decisions can be delegated to another individual. 

Roll call complete! Now that you have learned more about what tools should be present in your estate plan, you can ensure that you have all of the essentials in attendance when you begin the estate planning process. 

Do Not Become a Statistic 

Estate planning is important for everyone. It is about protecting yourself, your loved ones, and your hard-earned money (even if you do not have a lot of it). However, the numbers do not lie: most people do not see the importance of estate planning. Whether you need to create an estate plan or update an existing one, do not put it off. The following are some scary statistics about the average American and estate plans. We are committed to working with our clients to make sure they do not become a statistic.

Most People Do Not Have a Will or Trust

Only one in three Americans have a will or trust. This statistic is not surprising due to the amount of misinformation and fear around establishing an estate plan. One in three Americans who do not have a will or trust believe they do not have enough money or property to justify having an estate plan. The belief that estate planning is only for the wealthy is just one reason people put off planning; other reasons include being too busy, viewing it as too complicated or expensive, or fear of discussing death. While these may all be valid reasons, the benefits of planning far outweigh delaying the process. 

People Do Not Always Tell Others That They Have an Estate Plan

Some people may not see the point in discussing death with their loved ones, but having this difficult discussion can serve several purposes. Surprisingly, 52 percent of people do not know where their parents keep their estate planning documents, and only 46 percent of executors are aware that they are named in someone’s will. It is important to discuss with your loved ones where your important documents are stored, as they may need to access your original documents for multiple reasons. Additionally, when establishing or updating a plan, you must tell the individuals named in your documents that they have been chosen to serve in these roles. These discussions should focus on what their responsibilities are and highlight your wishes. Some estate planning attorneys offer family meetings after creating an estate plan to educate the individuals named in your plan on the roles they will play. 

Conflicts Are Common

According to a survey conducted by LegalShield, 58 percent of adults in the United States say they or someone they know have experienced familial conflicts due to not having an estate plan or a will. Conflicts can arise from a lack of proper planning. Often these conflicts are related to arguments over how accounts and property should be distributed after a loved one’s passing. You should work with an experienced estate planning attorney to assist in establishing a plan that will reduce family conflicts and disagreements that could end in estrangement. 

Now Is the Right Time to Create or Update Your Plan

Proper planning has always been important. American retirees expect to transfer more than $36 trillion to their families, friends, nonprofits, and additional beneficiaries over the next 30 years. This figure indicates an increased need to have a comprehensive financial and estate plan. Now is the time to set your fears aside and begin or continue the planning process so that you can avoid becoming an estate planning statistic. If you or your loved ones have questions about creating or updating your estate plan, please give us a call.