Last week, we shared the first part of our series on the importance of estate planning for those without children. If you haven’t read it yet, you can do so here. Here in part two, we discuss the other risks involved for those who forego estate planning.
- Someone will have power over your health care
Estate planning is not just about passing on your assets when you die. In fact, some of the most critical parts of planning have nothing to do with your money at all, but are aimed at protecting you while you are still very much alive. Advance planning allows you to name the person you want to make healthcare decisions for you if you are incapacitated and unable to make decisions yourself. For example, if you are temporarily unconscious following a car accident and unable to give doctors permission to perform a potentially risky medical treatment, it is not always clear who will be asked to make that decision for you.If you have a romantic partner but are not married and you have not granted them medical power of attorney, the court will likely have a family member, not your partner, make that decision. Depending on your family, that person may make decisions contrary to what you or your partner would want. Indeed, if you don’t want your estranged brother to inherit your property, you probably don’t want him to have the power to make life-and-death decisions about your medical care, either. But that’s exactly what could happen if you don’t plan proactively.
Even worse, the family members who have priority to make decisions for you could keep your dearest friends away from your bedside, in the event of your hospitalization or incapacity. Or family members who do not share your values about the types of food you eat, or the types of medical care you receive, could be the one’s making decisions about how you will be cared for in the hospital.
Even if, or maybe especially if, you don’t have kids, you need to do estate planning in order toname health care decisions-makers for yourself and provide instructions on how you want decisions made.
- Someone will get power over your finances
As with health-care decisions, if you become incapacitated and have not legally named someone to handle your finances while you are unable to do so, the court will pick someone to handle your finances for you. The way to avoid this is by naming someone you trust to hold power of attorney for you in the event of your incapacity.
A durable power of attorney is an estate planning tool that gives the person you choose immediate authority to manage your financial matters if you are incapacitated. This agent will have a broad range of powers to handle things such as paying your bills and taxes, running your business, collecting your Social Security benefits, selling your home, as well as managing your banking and investment accounts.
Because these powers are so broad, it is critical that you only give this power to someone you absolutely trust, and ideally, with the guidance of a lawyer who can watch out for your best interests.
The fact that a durable power of attorney is granted as soon as you are incapacitated means your agent can begin handling your finances immediately, without waiting for a judge’s decision, simply by presenting a legal document and appropriate proof of your incapacity to a financial account holder. Since courts are notoriously slow, this quick access can be immensely beneficial to ensure your bills get paid on time and you have the funds available when you need them.
Without a signed durable power of attorney, your family and friends will have to go to court to get access to your finances, which not only takes time, but it could lead to mismanagement and even the loss of your assets should the court grant this authority to the wrong person.
Furthermore, the person you name doesn’t have to be a lawyer or financial professional—it can be anybody you choose, including both family and friends. The most important aspect of your choice is selecting someone who’s imminently trustworthy, since they will have nearly complete control over your estate. Besides, with us as your Family Business Lawyer®, your agent will have access to us as your trusted counsel should they need guidance or help.
Given all of these potential risks, it would be ill-advised for those without children to ignore or put off these basic estate-planning strategies. Identifying the right planning tools is easy to do, and begins with a Family Wealth Planning Session, where we can consider everything you own and everyone you love, and guide you to make informed, educated, empowered choices for yourself and your loved ones.
It will likely take just a few hours of your time to be certain that both your assets, healthcare, and relationships will be managed in the most effective and affordable manner possible in the event of your death or incapacity.
This article is a service of Pantea I Fozouni,Family Business Lawyer®. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Family Wealth Planning Session, during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge.