This isn’t a fun topic but it’s one of those essential responsibility conversations. Emergency and contingency planning, aka estate planning, is something that most people prefer to put off. Procrastination can leave you and your family in a tough spot if an emergency strikes. It’s actually not a difficult process for most people, but the more money you have, the more complex it gets. Here is a simplified look for you:
In the event something happens to you, who is going to make medical decisions on your behalf? And who are you going to trust with your financial decisions? These two appointments are known as a health care proxy and a power of attorney (POA). With these two documents you can guide your medical care, pay your bills, manage your investments, hire nursing help, and so on. This person has ultimate power in your absence. Choose wisely.
For safe keeping, you can give a copy of your completed Health Care Proxy form, along with other estate planning documents to someone you trust, like your financial advisor. Please consult a trust attorney for help with designating power of attorney. Ask us for a recommendation.
Your proxy and POA identify who can act on your behalf. Two additional documents – your living will and last will and testament – provide instructions.
The living will describes care that you want or don’t want in the case of a severe medical situation. For instance you may not want heroic life support measures if you are likely to be severely impaired for the rest of your life. I know, it’s not easy to think about, but it will help your surrogate make decisions in line with your wishes.
A last will and testament describes how you want assets distributed and gives guidance and instructions to your heirs while you are able to communicate them. For instance you can name a guardian for your children in the event of your death. Having a will ensures you, not a judge, will have control of your situation. Typically your will should be updated every five years or so, and immediately after any life event that changes your wishes, such as a birth, marriage, divorce or death of a family member.
Are they right? You’ve probably heard horror stories about people who die without wills and others who become physically incapacitated too early and have left no instructions about what to do, leaving it to the court to decide. Don’t let that ‘fail’ happen to you. At 18 you become an adult in Massachusetts. Maybe that is a good time to get the health care proxy in place. At 21, maybe the first will. It’s never t00 soon to start, or too late to improve.
We’re pondering another article to dive into trusts next time around. As for now, rest assured that simply by reading this article, you’re many steps ahead as the most responsible person in your family.
Max Osbon – firstname.lastname@example.org