Plan for Your Future with This Estate Planning Checklist
As we get further into the New Year, it is essential to take stock of the changes that have occurred in your life and evaluate how they may impact your estate plan. Here’s a checklist of questions to guide your review and ensure your estate plan is current and aligned with your wishes.
Financial and Legal Management
Question: In the event of mental incompetence, who will handle your financial and legal affairs?
A Durable Power of Attorney (DPOA) allows you to appoint someone you trust to manage these matters on your behalf. Review your DPOA to ensure it contains the necessary provisions and powers, and that the person you’ve appointed is still your preferred choice.
If you already have a DPOA, you likely have what is called a “Statutory” DPOA. In Texas, this is a document that is roughly 3-4 pages long, and it was drafted and voted into our state statutes by our legislators decades ago. But the world has evolved since then.
For example, “digital assets” are not addressed in a Texas Statutory DPOA because they didn’t exist when that document was created. A digital asset is anything that can be bought, traded, sold, or used online. This can include anything from domains and websites for business owners to personal email accounts. In general, digital assets fall into four main categories: financial, legal, marketing, and personal assets. Think of things like your Amazon, Google, Netflix, Hulu, and Spotify accounts. These are not traditional assets that have value and you can’t touch them. However, if someone is mentally incompetent—and no longer even knows they have these accounts—it’s good for someone to have the power to shut them down (i.e., so they don’t continue to generate debits from your bank account every month). Because a Statutory DPOA is a non-evolving, shorter document, the agent you appoint in that document may not have comprehensive powers to help you with all your legal and financial matters. A thorough, Non-Statutory DPOA can be more than 25 pages, and it will provide very detailed powers for your agent. You will find it also has kept pace with the changes in our world.
Additionally, your DPOA should include provisions for your agent to deal with any of your government benefits, including Social Security, Medicare, and Medicaid. It’s also important to have a successor agent named in case your first choice is unable or unwilling to serve.
Question: Who will make medical decisions on your behalf if you are unable to do so? A Medical Power of Attorney (MPOA) allows you to appoint someone you trust to make these decisions. Review your MPOA to ensure it is up-to-date and has a HIPAA Release in it. Many times, a HIPAA Release is created as a separate document. However, the average layperson may not remember they need BOTH the MPOA and the HIPAA Release when they accompany a loved one to the hospital during an emergency. If the HIPAA Release is not part of the MPOA, your agent may find they have all the power they need to make healthcare decisions, but they don’t have the authority to access protected medical information, speak with physicians and insurance companies, and handle medical billing issues. You also should consider creating a Directive to Physicians to express your preferences for end-of-life care.
Question: Do you want your loved ones to avoid probate after your death as they transfer the title of your assets into their names? Trusts can help you accomplish this. Trusts also serve a variety of other purposes in estate planning, such as asset protection and estate tax planning. If you already have a trust, you should review it to ensure all your assets have been attached to it and the trustees and beneficiaries named are still alive and appropriate. Consider whether a revocable or irrevocable trust would better align with your current estate planning goals.
Question: Are you one of the 70% of people who will die without a Will? In blended families when there is no Will, the death of one spouse often means the children of the deceased spouse have rights in the deceased spouse’s property, even if it is owned jointly by the surviving spouse. A Will sets forth your wishes that your assets are distributed 100% to the people important to you and in the manner you intend. Review your Will to ensure it reflects your current wishes, has a self-proving affidavit, and complies with current legislation. If you’ve experienced any major life changes such as marriage, divorce, or the birth of a child, a new Will may be appropriate at this time.
By reflecting on these key questions your estate plan can accurately express your wishes for your loved ones and protect them from unintended legal consequences.
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