Caring.com has been conducting annual surveys to keep tabs on the estate planning preparedness of American adults. Only 32.9 percent of people that responded to the 2021 survey had wills or trusts, but 60 percent of the participants felt as though estate planning is important.
Most people know that they should act, but they procrastinate for one reason or another. When action is finally taken, a lot of folks put a simple will together and they leave it at that.
Something is better than nothing, but estate planning should be addressed in a more comprehensive manner. There are finer details that you should consider when you are planning your estate, and we are going to look at three of them in this post.
The first detail that we will highlight is not complicated all, but it is very important. When you sign up for a 401(k) plan or establish an individual retirement account, you name a beneficiary or beneficiaries. You can stipulate a certain percentage that would go to each beneficiary.
There are also beneficiary designations for other types of accounts, like payable on death accounts at banks and brokerages. And of course, you name beneficiaries when you take out life insurance policies.
As the years turn into decades, you may not even remember exactly how you filled out the forms back in the day.
Plus, a lot of people completely overlook the successor beneficiary designations. This individual would step into the role upon the death of the original beneficiary.
You should definitely make sure that your beneficiary designations are up-to-date, and if you did not include successor designations, you should take that step to cover all your bases.
Advance Directives for Health Care
A properly constructed estate plan will go beyond the financial element and address end-of-life eventualities. This will involve the utilization of legal documents called advance directives for health care.
One of these directives is a living will. You use this type of will to state your preferences with regard to the use of life-support measures like mechanical respiration, cardiopulmonary resuscitation, feeding tubes, and artificial hydration.
The living will can go a step further and cover your organ and tissue donation designations and your comfort care medication choices.
Another advance directive that should be part of the plan is a durable power of attorney for health care or health care proxy. Situations can arise that call for decision-making when you are unable to communicate, and the agent that you name in the document would be empowered to act as your representative.
These would be matters that are not directly related to the life-support questions that you answered in the living will. In order for the agent to speak freely with your doctors, you should include a Health Insurance Portability and Accountability Act (HIPAA) release.
Letter of Final Instructions
If you use a will to state your final wishes, you would name an executor in the document. You should make sure that the executor has all the information that they need to administer the estate effectively.
A letter of final instructions should be part of your estate plan. In this letter, you should provide the location of important paperwork and the login information for your online accounts.
The letter should include a list of the people that should be contacted about your passing, and you can detail the way you want your final arrangements to be handled. Of course, practical information like the location of keys to vehicles, property, and storage units should be passed along.
These are a few ideas, but it is basically a matter of common sense. Ask yourself what you would need if you were administering an estate and share that information in the letter.
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When you work with our firm to devise your estate plan, you can be absolutely certain that you will not overlook any important details.
If you are ready to get started, you can set up an appointment at our Staten Island estate planning office if you call us at 332-456-0500. You can alternately fill out our contact form to send us a message.