Plan Ahead – Times Are Changing
By: Stella Knight
The past six weeks have been an unprecedented time here in northeastern North Carolina. I doubt that many of us could have foreseen how our lives would be affected by COVID-19. This may sound morbid, but now is a good time to either prepare or update your estate planning documents. What documents am I referring to? The following are what I consider to be the essential documents for estate planning.
- Living Will.
- Durable Power of Attorney.
- Health Care Power of Attorney.
- Trust – Revocable or Living Trust.
A will states how your property is to be distributed at your death. If you have young children, you may want to set up a trust for your assets until your children are older and name guardians to care for your children.
A living will specifies what kind of end-of-life care you want – or don’t want – such as extraordinary measures like a feeding tube or mechanical ventilation. This is especially useful if you become terminally ill or suffer severe dementia, and you become unable to communicate your wishes.
A durable power of attorney is a legal document in which you give authority to another person – whether family member, friend, attorney, or bank – to act on your behalf (to make financial decisions) should you become disabled, incapacitated, or need their help. This document protects your financial interests and avoids court interference.
A health care power of attorney gives the person you designate as your health care agent broad powers to make medical decisions for you, including the power to consent to your doctor not giving treatment or stopping treatment necessary to keep you alive. This power exists only for those health care decisions for which you are unable to give informed consent. Again, as long as you are capable of making your own medical decisions, you continue to do so.
A trust provides a unique arrangement for the prudent management of your assets for your and your family’s benefit. A living trust provides for the management of your investments during your lifetime and avoids probate at your death. You direct your trustee to manage the assets prudently and distribute the income to you. A testamentary trust is a trust created in your will at your death. It does not avoid probate. Probate is the court-monitored procedure to pass your assets at your death. Probate administration will be discussed in a separate article.
If you prepared these documents several years ago, it may be worthwhile to review them. Has your situation changed? Have you recently married or divorced? Have you welcomed new grandchildren? Perhaps the coronavirus may be just the push you need to call an attorney and begin the process.
Having difficulty getting started? The first steps are to:
- Identify your assets.
- Identify your liabilities.
- Determine how each asset is titled (individually, joint with rights of survivorship, etc.)
No one can predict the unexpected and it is important to plan for emergencies. I do not know when this “shelter at home” order will end, but I do know you don’t need wait for the next crisis before you seek professional advice. Yes, legal services are considered an essential business.
The information contained in this column is of a general nature and does not constitute legal advice.
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