Estate Planning Emergencies
At Lucksinger Law, P.C. we are dedicated to protecting you and your loved ones from the different types of emergencies that can occur during your lifetime and can help you address some of the following concerns.
You are injured or unable to make your own decisions.
Being unable to work or make decisions for yourself can seem unimaginable. However, it happens to people every day. To best protect yourself and your loved ones, you should consider including some of the following tools as part of your estate plan.
Disability insurance. With this type of insurance, you can supplement some or all (depending on your level of coverage) of your income while you are unable to work.
Financial power of attorney. In this document, you name a trusted person (an agent) to handle your financial matters (sign checks, open a bank account, etc.) if you are unable to. You can specify what the agent can do and, subject to state law, when the agent can do it. Without this document, a court must appoint someone if you need someone to handle a financial matter on your behalf.
If you are looking for maximum protection for your loved ones with minimal court involvement, a revocable living trust can be a great addition to manage your money and property if you cannot. A revocable living trust allows you and your loved ones to avoid the probate process by transferring your money and property to a trust during your lifetime. In most cases, you would be the trustee and would continue to manage the money and property. In addition, you would continue to enjoy the use of the money and property during your lifetime. If you become unable to manage your financial affairs, a backup trustee that you previously selected would step in without court involvement and manage the trust on your behalf and for your benefit. You can also designate what will happen to the trust’s money and property at your death.
Medical power of attorney. A medical power of attorney document allows you to appoint a trusted person as your decision maker to communicate or make healthcare decisions on your behalf if you cannot do so. Absent this designation, the court may be required to name someone to make these decisions for you.
Advance directive or living will. Known by either name depending on your state, an advance directive or living will allow you to convey your wishes regarding end-of-life decisions. This can make carrying out your wishes easier and can reduce tensions among your loved ones brought on by uncertainty.
HIPAA authorization form. A Health Insurance Portability and Accountability Act (HIPAA) form allows you to grant specific individuals access to your medical information (e.g., to get a status update on your condition or receive test results) without giving those individuals the authority to make decisions on your behalf.
You want to provide for your loved ones after you have passed away.
No one wants to think about what will happen after they die, but you cannot plan for it if you do not think about it.
One of the first things most people think about when looking at death is life insurance. Do you have enough life insurance to support and provide for those you care about? If you are unsure, it is a good idea to consult with your insurance agent and financial advisor to make sure there are adequate funds to carry out your wishes.
In addition to making sure that you have enough life insurance, you need to make sure that your beneficiary designation forms are properly completed. It is common to just name individuals when asked to designate a primary and contingent beneficiary. While completing the form is better than nothing, this type of designation may lead to unintended consequences. When an individual is named, the death benefit will be paid to the named individual in one lump sum upon your death. This can be disastrous if this person has problems managing their money or has creditor issues. It can also cause issues if the person named is a minor. In this case, a court-appointed guardian will have to manage the money until the beneficiary reaches the age of majority, at which time they will receive the money in one lump sum.
You want to protect your hard-earned money and property from a lawsuit.
Due to the nature of your profession, you may be concerned that you could be sued. While the situations in which a first responder can be sued vary from state to state, you might consider meeting with an insurance agent to assess whether it would be beneficial to obtain insurance as protection. Additionally, some states allow certain types of property to be owned jointly by a married couple as tenants by the entirety, which are provided protection from creditors. However, the extent of the protection varies by state and may be subject to certain exceptions for the federal government.
It is important to remember that if you know of a potential lawsuit or are in the middle of one, you should not sell, gift, or retitle any of your accounts or property in an attempt to shield them from the lawsuit.
You want to keep your affairs private.
You do not have to be a celebrity to want privacy. You may be concerned about someone being able to find out where you live. This is where proper estate planning can be useful. By purchasing your home in the name of a joint revocable living trust with your spouse and naming the non-first responder spouse as the trustee, the owner of the property is the trust. If a person’s name has to be listed, it will be the trustee’s name, not yours. Although you are not the trustee, you can still be a beneficiary. You would still maintain a level of control and benefit from the trust as a trustmaker and beneficiary, but you would not be the one publicly owning the accounts and property. However, it is important to note that placing the house in a joint revocable living trust typically will not provide asset protection. As mentioned earlier, some states offer additional protections for homes owned as tenants by the entirety. You may need to weigh the asset protection benefits that tenancy by the entirety provides against the privacy that a joint revocable living trust provides.
An added benefit of the revocable living trust is that all trust management is done without court involvement. You can specify in the trust document how the money and property are to be used during your lifetime, any periods of incapacity, at your death, and at the death of your surviving spouse.
If you are interested in moving forward with creating or updating your estate plan, let’s get started today. We can meet with you in person or virtually, depending on your needs.