Documenting Your Wishes
Make certain that you document your medical and estate wishes as soon as possible to avoid hurt feelings and unhappy surprises. If you don’t have these documents prepared before a major illness or injury, it may be too late for your loved ones.
The suggestions below are general. Check with a financial planner or attorney for more specific information.
Information in this blog is based on:
https://www.metlife.com/ blog/ money/ estate-planning-mistakes/
Healthcare Power of Attorney or Proxy
This document assigns the person that you want to make health decisions for you if you are unable.
Health Insurance Portability and Accountability Act (HIPAA) Release Form
This document allows named individuals to have access to your healthcare information.
Living Will
This document provides clear instructions about treatment you do and do not want if you are unable to speak for yourself. It includes:
- Dialysis and breathing machines
- Resuscitation if you stop breathing or if your heart stops
- Tube feeding
- Organ or tissue donation after you die
Will or Trust
This document clearly spells out where you want your possessions and assets to go when you die. Note that your will has to go through probate (verified by the courts), and is a matter of public record. Talk to your attorney about what actions you can take so that a portion of your assets do not need to go through the probate process.
Other Considerations
Setting up Guardianship for Dependents
If you don’t name a guardian for any dependents, the court will appoint one. Talk to the person you would like to be the guardian. And be wary about naming a couple as co-guardians. If they divorce, the dependent may not end up with the person you choose.
Planning for Estate Taxes
If your estate is subject to federal estate taxes, they are generally due within nine months of death, in cash. This may be a concern if much of your estate is not actually in cash. That could potentially mean selling assets, like a house, that you may have meant to leave to an heir. Work with an attorney and financial planner to determine the best strategies for your circumstances.
Income in Respect of a Decedent (IRD)
If you die and you have income that hasn’t been income taxed, your estate or your beneficiaries have to pay income taxes on that money. Examples include savings bond income, individual retirement account payouts and sales commissions — income you would have received had you lived.
Keeping your Beneficiaries up to Date
If you have a 401(k), an IRA, insurance policies, payable-on-death and transfer-on-death accounts, or other assets with named beneficiaries, that money will be distributed directly to the people you named as beneficiaries, even if your will states otherwise. Make certain that the beneficiaries on those accounts are up-to-date.
Digital Assets
Most of us have digital accounts, such as accounts for treasured family photos in digital format. These accounts will become inaccessible when you die. A service provider often will not disclose a deceased person’s passwords to your representative.
Work with an attorney and make sure, to the best of your ability, have a plan to shut down your online presence.