Wills, health care directives, lists of passwords to online accounts. By now, most people know they should prepare these items — even if they haven’t yet — and make them available to trusted family members before the unthinkable, yet inevitable, happens.
While getting estate planning items in order is more urgent for seniors, everyone should do this.
A recent article in The New York Times, titled"There’s More to Estate Planning Than Just the Will,"chronicles the experience of Erik A. Dewey, a writer from Tulsa, Okla., who was tasked with sorting through piles of paper and online information when his father died at age 65—just a week from retirement. Dewey compiled everything he learned from the experience into “The Big Book of Everything.” Here are some of the most basic items.
A Will or Living Trust? A will is used to distribute your assets after you die. A living trust makes it possible to transfer your assets to the trust for your benefit during your lifetime, and then to your beneficiaries when you die. In fact, you will read some sources that say a living trust is better than a will. According to the article, however, “The benefits of trusts are overplayed and the disadvantages of probate are exaggerated.” There are some instances when a trust is appropriate. For example, when you have a summer or second home out-of-state or a family business that will continue after you pass. A will might be all you need, but it is best to consult an estate planning attorney.
Health Care Directives. A living will, which is also known as an advance directive, is usually limited to end-of-life decisions like life-prolonging measures. A durable power of attorney for health care, on the other hand, deals with all health care decisions. It lasts only as long as you are incapacitated and unable to make decisions for yourself.
Power of Attorney. This gives another person the authority to make financial decisions on your behalf. A durable power of attorney allows that person to act even if you become incapacitated.
Your health care proxy should be distributed freely, but make sure that your spouse, your children, and your doctors have a copy of your directives.
Aside from the major legal documents, here are some other recommendations:
- List passwords and logins for everything.
- Keep old tax documents for several years after someone has died.
- Maintain medical histories.
- Detail the companies and services that direct-debit from your bank accounts and credit cards.
The original article also reminds us not to forget some of the everyday items, such as directions for your house alarm, furnace, and sprinkler system, and mention that there is a key to the shed out back.
Reference: New York Times (September 5, 2014) "There’s More to Estate Planning Than Just the Will"
Comments