We often take more time planning our vacations than we do our future.
While it may not be a fun topic of discussion, it is important to have plans in place should you become physically or mentally unable to manage your affairs. Doing so in advance ensures that you can provide input on how things should be handled in the future.
Statistics show that as we age, the likelihood that we will require help in making decisions increases. While friends or family may be able to help with things such as buying groceries and paying bills, advance planning is required for more complex tasks such as selling real estate, gifting assets to your children or making critical medical decisions.
Without a plan in place, decisions will be made for you. Your decisions may even be appointed in a guardianship proceeding – a court-supervised process that names a person or entity to manage the affairs of an incapacitated person.
Most people prefer to be part of the decision-making process, but this can only happen with planning. Depending on the needs of the person or family, incapacity planning may include an array of legal documents and planning techniques such as an advanced health care directive, living will, property powers of attorney and health care powers of attorney.
AVOIDING THE COURTS
Part of the process of partnering with a Certified Trust and Financial Advisor is to review your will with the general power of attorney and to reaffirm all beneficiary designations.
Beneficiaries should be reviewed periodically for all bank accounts, retirement plans, pension plans, life insurance policies and annuities.
You also will determine whether or not accounts should have a payable-on-death designation, meaning that funds would not be subject to probate. Instead, funds would pass directly to the named beneficiary, providing quicker access to liquid assets by avoiding the perusal of the court.
No one wants loved ones to have to wrangle through the courts while dealing with loss, yet if the funds are not in a trust and do not have the payable-on-death or beneficiary designations, the estate must be probated through the court, which can take several months.
IMPORTANCE OF A WILL
While it might not be pleasant to think about or discuss with family members, there are major ramifications of not having a will.
If you die without a will, the court will probate your estate, which means the court may decide how your estate should be distributed; also adding expenses to the estate.
It also may be worthwhile to consider a trust, which creates a legal entity that holds your assets for you, eliminating the need for probate when you die.
One type of trust, a revocable living trust, helps to prepare for possible incapacity, as you are able to appoint a disability trustee. This individual or corporate trustee would be empowered to administer the trust should you become incapacitated.
STORE IN A SAFE PLACE
After planning and creating the necessary documents, determine a central, safe place to store important papers such as wills, trusts, powers of attorney, etc.
Often in times of a family emergency or a tragic event, we become overwhelmed. The stress and confusion may lessen our ability to think clearly or remember where our items may be. Determining a location in advance and sharing it with those closest to you will help unburden the state of affairs.
To avoid undue stress on your family and loved ones in the event of unforeseen circumstances, start the planning process early.
Partner with a Certified Trust and Financial Advisor to make the process as smooth as possible, considering the sensitive nature of the conversation.
Later, your loved ones will appreciate it.
Jeffrey C. Deloglos is trust officer at ESSA Bank & Trust, Hanover Township, Northampton County. He can be reached at firstname.lastname@example.org.