By: Michael Gunning
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Estate Planning When You’re Elderly or Ill
Many folks don’t want to think about the worst, we get that. However, without the appropriate estate planning in place, you will wish you would have!
Create Your Will
If you haven’t already created a will, our firm highly recommends that step first. A will is paramount if there are complicated family situations or unusual assets involved, and it’s best to speak with an attorney about how they can help create one for your unique situation!
Think of Your Children
If you have children, you should name a personal guardian for them in your will. Suppose both parents are unavailable or unwilling to act as temporary caretakers. In that case, the local court of jurisdiction can appoint this person (absent a good reason not to do so) and give out instructions on raising their charges’ interests until they reach adulthood – though it’s pretty rare for anyone to want such a huge responsibility! Our experienced estate planning attorneys can help you address this situation.
It’s essential to think about who would benefit from your estate plan. Will you leave everything to children or split the inheritance up between them in different ways?
Powers of Attorney or a Living Will
Consider the idea that you may become disabled and unable to handle day-to-day financial issues or make medical decisions at some time. If you don’t plan ahead of time for this possibility, a court might have to appoint someone to perform these tasks for you. No one wants a court’s involvement in such intimate matters, but someone with legal.
To avoid a time-consuming court case, give someone you can trust the legal ability to act on your behalf. You do this by drafting durable powers of attorney, one for financial matters and one for healthcare. Your agent or attorney-in-fact is the individual you choose. When setting up your estate planning, you may state that the papers will be meaningless unless a particular condition is met.
Essential Estate Planning Documents:
- medical directive (living will)
- a durable power of attorney for health care
- a durable power of attorney for finances
A living will or medical directive details your preferences for terminal care to your healthcare providers in as much detail as you want. You may request that everything is done to alleviate your pain (palliative care or comfort care), but you do not wish to undergo extraordinary measures such as CPR in certain situations.
A durable power of attorney (DPOA) for health care is a legal document that allows you to name someone you trust and delegate them the authority to follow your medical directives and make any necessary medical decisions if you become incapacitated.
Creating a durable power of attorney to handle your finances gives authority over your assets to someone else. Power of attorney can significantly help family members, such as your spouse, so they can access your checking account to pay the mortgage. Without a DPOA for finances, your relatives would have to petition the court for a conservator or guardian to handle your money.
Check Your Beneficiary Designations
You’ve probably already designated beneficiaries to receive certain assets upon your death. You may have been given a form on which to establish a beneficiary when you joined an employer-sponsored retirement plan or purchased a life insurance policy, for example. Now is the time to check up on that paperwork even if the original beneficiary dies or divorces their spouse, many people.
If you’ve designated pay-on-death (POD) beneficiaries for bank accounts, automobiles, or savings bonds, double-check those designations. All you have to do is obtain a new beneficiary form from your employer or the account custodian and complete it.
Consider setting up a payable-on-death account when setting up your estate planning, it’s simple and free, and it will avoid your assets needing to go through probate after your death.
Consider a Living Trust
Probate court procedures are a costly, time-consuming burden for relatives who want to pass property quickly to the next generation. Consider creating a revocable living trust to save your family the bother. This document transfers your assets directly to the people who inherit them after your death without the need for probate. (For further information on probate
A living trust may be revocable and can be amended or revoked at any time, as long as you are sane and competent. However, if you die, become incapacitated, or choose a successor trustee, the person you designated to supervise the trust will take control of its assets without court supervision.
It takes considerably more time and effort to create a living trust than writing a will. If your state has an easy and inexpensive probate procedure, you may choose not to bother. However, many families find that these trusts are beneficial—and they are pretty affordable. Estate planning is very important if you want to decide what happens when you are no longer with us.
View Your State & Federal Estate Tax Exemption Amounts
Most Americans shouldn’t be concerned about owing a considerable state or federal estate tax bill in their lifetime. But it’s worth looking at the current taxes to be sure. If you discover that your estate is likely to owe state or federal estate tax, seek legal help on your options.
Federal estate tax. For example, a person who died in 2020 might leave $11.58 million without owing inheritance tax; married couples can be exempt twice that amount. (This exemption amount rises each year to keep up with inflation.) As a result, it’s expected that the IRS will not tax 99.9 percent of all estates.
State estate tax. In a few states, a separate state estate tax applies to estates valued above a certain amount. The exempt amount in most of these states is lower than the federal exemption. State taxes are considerably less expensive than the Federal rate. For more information, see Washington State Estate Taxes.