Most people think of estate planning as deciding who will inherit their property after they die. That’s certainly part of it, but a good estate plan answers another important question:
Who will do the work when you can’t?
If an illness, injury or cognitive decline leaves you unable to manage your own affairs, someone may need to pay your bills, communicate with financial institutions, make healthcare decisions and coordinate your care. After your death, someone will have another list of responsibilities to handle.
Choosing the right people for these jobs—and giving them the legal authority they need—can make an enormous difference for your family.
Here are five important jobs to consider.
1. Who Will Manage Your Finances?
If you became unable to handle your finances tomorrow, who could step in?
A financial power of attorney allows you to name someone to act on your behalf. Depending on the authority you give that person, they may be able to pay bills, manage bank accounts, deal with insurance companies, handle investments and take care of other financial matters.
Without the appropriate legal authority in place, even a spouse or adult child may not automatically be able to handle everything for you. In some situations, the family may have to pursue a court proceeding to obtain the necessary authority.
2. Who Will Make Healthcare Decisions?
Someone may also need to make medical decisions if you become unable to communicate or make those decisions yourself.
Advance healthcare planning allows you to identify the person you trust to speak for you and provide guidance about the kind of care you would—or would not—want.
Choosing that person deserves careful thought. The best choice isn’t necessarily the oldest child or the person who lives closest. You need someone who understands your wishes, can communicate with healthcare providers and is prepared to make difficult decisions under stressful circumstances.
3. Who Will Handle Your Estate?
After your death, someone will need to take responsibility for settling your affairs.
Depending on your estate plan, that may include locating assets, paying final expenses and debts, dealing with tax matters, communicating with beneficiaries and distributing property according to your will.
The person you name should be trustworthy and organized. It’s also worth considering whether that individual realistically has the time and ability to take on the job.
4. Who Will Manage Your Trust?
If your estate plan includes a trust, your successor trustee may eventually have significant responsibilities.
A trustee doesn’t simply “hand out the money.” The job may involve managing investments and other assets, keeping records, making distributions, communicating with beneficiaries and following the terms of the trust.
Some trusts may continue for years, making the choice of trustee particularly important. Before naming someone, consider whether that person understands what the role may require and whether professional guidance might be helpful.
5. Who Will Coordinate Your Care?
This is one responsibility families sometimes overlook.
If you eventually need help because of dementia, a chronic illness, disability or another health condition, someone may find themselves coordinating the many pieces of your care.
Who will communicate with doctors? Research care options? Arrange home care? Keep siblings informed? Watch for changes in your needs? Help determine when your current living situation is no longer working?
Sometimes the person coordinating care is also the financial or healthcare decision-maker. Sometimes those responsibilities are divided among several people. Either approach can work, but it’s much easier when everyone understands their role.
Don’t Just Name People. Prepare Them.
An estate plan shouldn’t leave your family with a stack of documents and no idea what to do with them.
Talk with the people you’ve chosen. Make sure they know they’ve been named and understand what the job could involve. Keep important financial, legal and healthcare information organized and accessible.
And revisit your choices periodically. The person who was the right choice 10 years ago may not be the best choice today.
Planning ahead won’t remove every challenge your family may face. But it can replace many unanswered questions with clear instructions, legal authority and a better understanding of who will do what.
That’s a gift not only to you, but also to the people who may someday be asked to step in.
Not sure whether your estate plan gives the right people the authority they need? Lifescape can help you review your plan and prepare for what comes next.
Schedule a consultation to discuss your situation with the Lifescape team. To get on the schedule, call 816.291.4143 or book online.
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