Summary: It is important to plan smarter and have a blueprint in place for passing wealth and decision-making responsibilities. You can start small by getting organized and handing off informal tasks. You can also consider creating a Power of Attorney and structuring your estate plans so as to split control between yourself and your beneficiaries.
While people may not want to consider life’s potential challenges – there is a big difference between not thinking about obstacles, and not planning for them. This is especially true if you have spent decades building your wealth and other assets. Not having an estate plan in place can lead to fights over financial decisions, vulnerable loved ones losing their support systems, or even stressful court appearances. As people are living longer, it is important to plan smarter and have a blueprint in place for passing wealth and decision-making responsibilities.
The first step is getting organized. Most people have a surplus of information (financial, medical, and medical) in multiple formats and in multiple places. You want to find all of the important documents or files, consolidate them, and put them in order. For the financial documents, look for account statements, beneficiary designations (with contact information), tax returns, and recurring bills. For medical, you should track down your Advance Directive for Health Care or Health Care Power of Attorney, insurance information, medical records, and a list of medications. For the legal paperwork and file, it is a good idea to consolidate your Power of Attorney papers, any trust documents, as well as write a list of where the original documents are stored and who has a copy. In addition to this collection of documents and files, you should also consider drafting a list of important contacts (lawyer, accountant, executor) and identify who has access to what accounts.
Designate your decision-making responsibilities
Once you have gotten organized, the next step in designating your decision-making responsibilities is to consider making some small or informal changes. There are many different plans and persons involved in this part of the process, and so there is no one-size-fits-all solution. For example, you can begin delegating your financials by asking a bookkeeper to pay your recurring bills. Or, you can have a trusted family member or loved one accompany you to doctor visits and help take notes about medications and/or treatment plans. When it comes to legal accountability, however, (ex: joint bank accounts, trusts) a more formal transfer arrangement is needed.
A Power of Attorney is a legal document enabling a person to act on another person’s behalf in the event of their incapacity. A Durable Power of Attorney can manage a broad range of affairs including financial matters, real estate transactions, and other legal decisions. He or she is legally bound to act in the principal’s (the person granting authority) best interests. Once the Power of Attorney is made valid, it continues until revoked, terminated, or upon the principal’s death. If you are concerned about the accountability of your Power of Attorney, you can name two agents who must act jointly, name an agent and successor agent, or employ an outside facilitator like an attorney or a neutral third party.
Another means of delegating your decision-making responsibilities is to structure your trust(s) so that there is a split in control between the principal and others. One example of this is a revocable living trust. Generally speaking, if you want to delegate decision-making responsibilities, the trusts should be flexible in terms of its financial distributions. The grantor might want to consider making someone else the trustee and giving that person the authority to change the terms of the trust, or, the grantor may want to ask an outside facilitator to offer advice about the terms or management of the trust.
In conclusion, no one wants to consider the worst – but an estate can unravel very quickly if certain plans and provisions are not in place. Having a contingency plan and allowing for the transfer of decision-making responsibilities means that your family members and loved ones will be mindful of your best interest and prepared to carry out your final wishes. For more information or to schedule a consultation with Atlanta, Georgia estate planning and probate attorney Sarah Siedentopf, call (404) 736-6066 or email [email protected].
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