Many Sun City residents assume that the only estate planning they need to do is deciding who gets the family home, or other important assets, once they pass away. While writing a will is a crucial part of the estate planning process, it is far from being the only part. In addition to dividing up your assets after death, you also need to make sure you take care of yourself while you are alive. For example, some people suffer illness or injuries that make it impossible for them to make the necessary plans.
There are multiple documents you will need to protect yourself if you ever become incapacitated. First, you will need an advanced health care directive or medical power of attorney document to establish who will make decisions for you if you are unable to do so due to a medical condition or injury. You will also require a living will to provide instructions regarding your medical care, such as treatments you refuse to undergo and whether you wish to receive life-sustaining treatment towards the end of your life, in case you are physically or mentally unable to speak on your own behalf. You should also sign a HIPAA release to permit doctors to legally discuss your medical condition with the people you trust. Lastly, if you intend to donate your organs, you will need to authorize organ donation by checking the box on your driver’s license or registering with an organ bank or hospital.
In addition to medical care, you will have to assign someone you trust to handle your finances while you are incapacitated. You can do this through a Durable Power Attorney document. Whereas a Power of Attorney is no longer legally valid when you become incapacitated, the Durable Power of Attorney will be. This person can write checks, deposit money, withdraw money and pay bills on your behalf. However, financial institutions have rules with regards to whether to accept a Power of Attorney. To avoid these complications, many people set up a revocable living trust that all financial institutions are required to abide by. You, as trustee, or a designated manager of the trust, will manage your assets. The Durable Power of Attorney form will then be used to assign someone to manage accounts that cannot be transferred into a living trust, such as 401(k)s and IRAs.
Source: MarketWatch, “This is the most important person to remember in your estate plan,” Brad Wiewel, Nov. 17, 2017
