- Everyone 18 and older should have a General Durable Power of Attorney, a Medical Power of Attorney, and a Healthcare Directive. These documents will spare your family tremendous stress if you become seriously ill or incapacitated.
- Without proper healthcare directives in place, family members can be put in the uncomfortable position of trying to make unified decisions about what they assume to be your true wishes.
- Broaching the subject of estate planning with loved ones can be difficult—but, you can’t afford to put it off long-term.
- Estate planning documents are surprisingly affordable considering how long they last and how much protection and peace of mind they provide your family when it counts most.
PREPARE FOR THE UNKNOWN
As a wealth manager, I have always tried to practice what I preach. My estate plan is in order and well structured. My life and disability insurance policies are sufficient to ensure that my family will maintain its standard of living no matter what happens to me. I have planned and saved diligently for my retirement and for my children’s education.
However, even with all that advanced planning in place, life is so unpredictable that even the best prepared among us can be thrown off guard. I should know. It happened to me. My brother recently had a significant health issue that put him in the intensive care unit at Overlake Hospital for over a week. His only support came from my wife, my mom and I. It was a very scary situation. Thanks to the incredible efforts and guidance of the doctors and nurses at Overlake, my brother come through and made a full recovery. The Overlake medical team’s professionalism, knowledge and empathy during that difficult time for our family was beyond measure and we are deeply grateful.
Even though my brother made a full recovery, another unsettling concern surfaced- he did not have a General Durable Power of Attorney, a Medical Power of Attorney, a Healthcare Directive or even a will. Fortunately, he didn’t need these essential estate planning documents at the time, but it could have been a very difficult situation for our family if he hadn’t pulled through. You might assume that every adult close to you has their estate planning documents in order, but it’s often not the case. It couldn’t hurt to take a refresher about the most important estate planning documents to see how they help and protect your family when someone becomes ill or incapacitated.
- General Durable Power of Attorney – This document authorizes someone to act on your behalf and to manage your finances if you become incapacitated. The power of attorney can be permanent, or it can become effective in the future should you become incapacitated and unable to make sound financial decisions on your own. Without the General Durable Power of Attorney, financial institutions will not allow loved ones to make financial decisions on your behalf and the court will appoint someone to take care of your financial decisions. Obtaining court approval to manage someone’s finances entails many steps and it can take quite a while to be completed. A cumbersome process for family members already involved in an emotional situation.
- Medical Power of Attorney – This document authorizes someone to be your representative in case you are incapacitated and it allows that person to make healthcare decisions on your behalf. Although family members may be allowed to make healthcare and end-of-life decisions without a Medical Power of Attorney, failing to have this document in place may cause strain on family members who are trying to make a single, cohesive decision on your behalf.
- Healthcare Directive – This document provides specific direction about your healthcare wishes to family members, doctors and others who care about you. Without this document, family members can only assume what your medical wishes are and it often adds additional stress to an already challenging time.
- Will or Living Trust – This document directs the administration of your estate at your death. Without a will or living trust, state intestate laws come into play and provide a process for administration and division of your estate. Without a proper will, the actual division of your estate may be significantly different from how you desired it to be. What’s more, this situation can cause years of friction between family members that’s sometimes never reconciled.
Prior to my brother’s illness, I did not have a discussion with him about these important estate planning documents that we’ve discussed in this article. Even if I had, I am not sure he would have moved forward with the process. It took a very serious illness to get the ball moving, and I regret not having at least tried to speak with my brother years ago about his estate plans. If you suspect that someone close to you does not have proper estate planning documents in place—or is relying on documents long out of date, then it’s very important to check in with them and broach the subject even though the topic can be unpleasant. Also, I strongly recommend working with an attorney to get these documents prepared properly. The cost for an attorney is minimal considering how long these documents remain in place and how much help they ultimately provide during a very difficult time in one’s life.
In case you are wondering, yes, we are now working on getting my brother the estate planning documents he needs. One of our goals at Soundmark is to align ourselves with expert professional advisors from outside our firm who can provide specialized solutions to each of our client’s financial needs. We are happy to refer you to excellent estate attorneys who can prepare these documents properly for your family, friends and others close to you. Contact us today at 877-726-4040 or email@example.com.
Todd Flynn, CPA, CFP ® is a Principal at Soundmark Wealth Management, LLC. Todd works closely with physicians, business owners, and other high-net-worth individuals to help them define their financial goals and implement an ongoing financial planning process.