COVID-19 has prompted many people to think more seriously about their plan for death and possible disability. The following are ten steps you can take to be better prepared:
- Have a Last Will and Testament. Your will directs the distribution of your “probate” assets, nominates a personal representative (executor), and contains other relevant provisions regarding your estate. Probate assets are assets that are not held in joint tenancy or with a beneficiary designation (other than your estate named as beneficiary).
- Have a General (Financial) Power of Attorney. A General Power of Attorney allows your agent to deal with your property for you. A Power of Attorney is only valid during your lifetime. Having a General Power of Attorney in place can prevent the need for a conservator to be appointed for you by a court if you become incapacitated. A “durable” Power of Attorney means that it remains valid even if you become incapacitated.
- Have a Medical Power of Attorney. A Medical Power of Attorney gives your agent the authority to consent to or refuse medical treatment on your behalf. The Medical Power of Attorney may combine with the General Power of Attorney to form a single document. Having a Medical Power of Attorney in place can prevent the need for a guardian to be appointed for you by a court if you become incapacitated.
- Have a Living Will. A Living Will typically directs when life-sustaining procedures and artificial nourishment will be withdrawn if you are unconscious for a certain amount of time and have a terminal condition. You should have a Living Will if you want to leave your family with directions in this regard.
- Nominate a Guardian for Your Minor Children. You can nominate a guardian for your minor children in a properly executed will or in another document that meets specific criteria.
- Safekeeping of Your Documents. It is vital to keep your documents in a safe place and let your nominated personal representative and agents know the location of the documents. Copies of these documents may not be sufficient, so you should keep track of the originals. For example, if your original will cannot is lost following your death, Colorado law presumes that the will was revoked. You may wish to keep your documents in a safe at home or in a safe deposit box. You might even give your agent an original of your Powers of Attorney and Living Will immediately.
- Maintain a List of Financial Information. Compile a list of your assets and the names and contact information for your financial advisors (including accountant and attorney), and let your nominated personal representative and agent know where to find this information.
- Be Careful with How Assets are Titled. A well-crafted estate plan will not work as intended if the way your assets are titled is inconsistent with the plan. For example, if you hold property in joint tenancy with right of survivorship, then the surviving owner becomes the sole owner of the property as a matter of law at your death, even if that result is contrary to your will. Your will does not control the distribution of joint tenancy property. This same rule for joint tenancy is true for real estate, bank accounts, and other assets. Therefore, it is critical to coordinate the titling of your assets with your estate plan.
- Be Careful with Beneficiary Designations. If you name a beneficiary for your assets, such as a payable-on-death (POD) beneficiary, that beneficiary will receive those assets at your death. Your will does not control the distribution of property that has a named beneficiary unless your estate is the beneficiary (which is generally not advisable, especially for IRAs and other retirement assets). The designation of beneficiaries of such assets should align with your overall estate plan.
- Review Your Plan. You should periodically review your estate plan. A plan that may be ideal for you at one stage of your life may not be as suitable a few years later as circumstances change, and laws are revised. However, it is essential that you not make changes to your estate planning documents by writing on them. If you want to make changes to the documents, you should have new ones professionally prepared.
The estate planning attorneys at Lyons Gaddis can prepare estate planning documents for you and provide advice on estate planning matters.