The 5 Must-Have Tools to Protect Your Family
Most people, including lawyers, think of estate planning as something that they can do “later.” Unfortunately for many, “later” often becomes “too late.” They may have thought, “I’m going to live for a long time, and I’ll get around to it next year,” or “I’d rather spend my money right now on something else,” or “I can wait to do estate planning at another time.” But sometimes things happen, and it’s just too late. Below are the five must-have documents you need in place to protect your family. 1. Designation of Health Care Surrogate This is probably the most important and useful document in your Family Protection Plan. This is like a power of attorney specifically for making health care decisions. If you or your loved one are unconscious, who will make the medical decisions such as consent to surgery, blood transfusions, and medications? 2. Power of Attorney Assuming you’ve gotten past the immediate medical emergency, there may be other items that you have to take care of on behalf of your loved one while they are in the hospital. Some of those things may be as simple as making a mortgage payment, car payment, transferring funds to allow them to pay doctor bills, or arranging for home health aid or special medical equipment. Without a document authorizing you to act on the behalf of
your family member, a bank or a company that you need services from may not be willing to assist you. 3. Living Will If, on the other hand, things don’t go well during the sudden emergency and a decision has to be made regarding what life- sustaining measures should or may be used, why would you want to put that burden on your loved ones? The decision to provide — or not provide — either life-sustaining mechanical means or food and hydration is an enormous decision for someone to make. However, you can ease the burden somewhat by stating under which circumstances you do or do not want life- sustaining measures taken to prolong your life. Also, an issue that comes up is whether or not you want food and hydration that are merely used to prolong your life even if you are in a vegetative state. 4. Last Will and Testament powerful and useful one is to avoid having government officials deciding how your estate will be distributed and, more importantly, deciding who will take care of your minor children . Again, while most people think of estate planning as something you do when you are retired, I suggest that anyone who has a child must have a Family Protection Plan in place — and, if they do not, they are actually being negligent in the care of their children. A last will and testament does not take effect until you are deceased. The most
5. A Revocable Trust
A trust is a document that you create that acts as a separate mechanism for holding your assets. The primary reason that most people create a trust and transfer assets into it is to avoid probate. By avoiding probate, you can expedite the transfer of assets to your beneficiaries and avoid expenses such as attorney fees and personal representative fees, which can run 3%–6% of the value of your entire estate. If you have an estate valued at $500,000, you can save over $30,000 in costs and fees if your assets are transferred to a trust before your death. That means $30,000 more goes to your beneficiaries that could be better used to pay off a student loan or as a down payment on a home. Again, the savings go directly to your beneficiaries instead of into the pocket of a law firm.
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