Haims: Avoid unnecessary heartache and anxiety with estate planning
Currently, I am watching a client’s family being torn apart by sadness, anxiety, and a deep sense of hopelessness. It’s hard to watch, and it has raised emotions within our office. No, a loved one has not passed away — yet. And this is the problem.
When this family’s father passed away a few years ago, their mourning and sadness were somewhat isolated to just the emotional loss of their dad. His will clearly defined his final wishes, and his financial affairs were, for the most part, in order. A couple years after their father’s passing, the adult children thought it best that their mother come live with the son here in Colorado. The son set up a checking and savings account at a local Colorado bank, had social security payments, investment accounts, and real estate interests redirected to the new account. All was good — so he thought.
Recently, the mother experienced a stroke while exercising and was hospitalized. She’s doing better now. However, while she was hospitalized, the family had been informed that they could not access many of their mother’s financial accounts, nor completely respect her health care directives. It seems that when the mother moved here, she was in good health and of sound mind. Therefore, nobody had thought about having their names added to financial accounts or updating medical powers of attorney documents and HIPAA consent forms.
Now, there is finger-pointing, criticism, tears, and guilt. It’s splitting up the family and likely causing irreversible harm.
Be proactive — reactive can be costly and sad
Rich or poor, or somewhere in between, we all have ideas of what we’d like to see our future look like. More than likely, most people may not want to envision a time spent in court, arguing with siblings and other family members, or fighting with financial institutions and health providers to uphold end-of-life wishes and the management of personal assets.
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Unfortunately, for people who have not taken the time to get educated about planning for end-of-life legal, financial, and medical matters, heartache, turmoil, along with family and sibling quarreling may be inevitable.
Estate planning does not only apply to wealthy individuals. If you or your aging loved ones own property or other assets like stocks and bonds, it is important that you educate yourself about the importance of documents such as a will, advance directives, powers of attorney (both financial and health matters), and various types of trusts. Avoid the potential of formidable challenges by taking the time to understand how these documents may affect you and your aging loved ones.
Regrettably, there are few educational courses that teach people how to prepare for medical or financial emergencies in addition to the intricacies of the distribution of an estate. Depending upon the research source, most Americans do not have a will that defines how they would want their assets managed after their death. A recent Gallup poll found that slightly less than half of U.S. adults have such a document in place. Earlier this month, LegalZoom posted an article stating, “By most estimates, anywhere from 50–60% of Americans don’t have a will.”
When it comes to managing your, or your loved one’s, health care and financial wishes upon death, laws are quite specific about who can participate in health care and financial-related conversations and decisions. It’s important to understand the laws frequently vary from state to state. So, if you have moved here from a different state, it may be a good idea to have a Colorado attorney look over your documents.
The following are some of the documents one may need to have when developing an estate plan:
- General, limited, and durable power(s) of attorney.
- Springing power of attorney
- Disability trusts (children of passing parents)
- Irrevocable/revocable living trusts
- Living will
- Advance care directive
- HIPAA consent form
Proper and timely estate planning can really help during a time of family crisis. Preplanning will greatly assist family members and loved ones to know what medical and financial efforts you or your ill family member(s) would want. Further, having the proper documents in order will provide you and your family members the legal means to carry out those wishes.
At the end of the day, legal documents will not solve all problems. The best approach to developing a well-conceived “plan” will start with a conversation that occurs well before an unexpected issue arises. Speak with your partner, family, and sibling(s), about what your wishes are.
Without proper legal documents, at best, assets may go to probate and tax implications may eat away at your wealth/inheritance. At worst, family and loved ones may see the worst in each other.
Judson Haims is the owner of Visiting Angels Home Care in Eagle County. He is an advocate for our elderly and is available to answer questions. His contact information is VisitingAngels.com/comtns and 970-328-5526.