by Nancy Merrill and Trip Hart
“Your mother doesn’t work here! Clean up after yourself!”
Have you taken care of your estate needs to provide your survivors the knowledge and ability to honor your wishes, or might you be leaving a bit of a mess?
Honor My Wishes (HMW), an end of life organization advocating for Dignity, Security and Peace at Life’s End urges all adults to prepare and organize their financial matters. HMW’s last article highlighted the importance of completing a “Health Care Power of Attorney” to deal with end of life medical decisions. This week we want to convince you to bring good stewardship for the management of legal and financial affairs. First up – Wills.
A Will’s primary purpose is to distribute assets, which can be controlled after death by a Trustee. If you own real estate, have significant assets or minor children, you should have a Will. A state formula for distribution of your assets will be used in the absence of a Will, but it may not be what you would want. Your Will can also suggest arrangements for custody of minor children, although such directions are not binding.
A Will demonstrates you care that beneficiaries receive assets in an orderly fashion, and avoids conflict by nominating a Personal Representative to carry out the Will’s provisions. The Personal Representative does not have to be a family member or even a beneficiary, but often they are. They take the Will to court, providing documentation for Probate to be completed, and wrap up all details.
If married and intending to leave your estate to your spouse, a “Community Property Agreement” saves money and time. Such an agreement passes community assets to the surviving spouse without a probate. It is wise to seek legal advice regarding this.
Another document to consider is a Durable Power of Attorney (DPOA). A DPOA remains valid if you become incapacitated, and can be effective immediately or take effect only upon your incapacity. The agent would have authority to manage your finances and assets, avoiding the need for a guardianship, perhaps the probate process itself, and impacting the ability to access Medicaid benefits while saving assets for the healthy spouse. It is a very powerful tool, and careful thought should be given to naming this individual. The agents for a “Health Care Power of Attorney” and a “DPOA” do not have to be the same person.
One last important step to being a good steward is to organize your financial information. We carry in our heads the location of deeds to property and titles to cars, the income tax records, insurance policies, and even military discharge papers. Perhaps your spouse knows too. If something suddenly happens to you both, would your Personal Representative know where to find all this data? While it is hard to prove, National Unclaimed Property Associates asserts “More than one-fourth of all life insurance policy benefits go unclaimed on death of the insured, because family members simply aren’t aware” and estimates that in 2007 this amounted to $21 billion.
This column barely scratches the surface of good planning, but HMW has created a comprehensive resource guidebook that covers these topics in much greater detail, and provides an organizational system. This 75 page HMW guidebook is offered complimentary for those who cannot afford to contribute. We are a non-profit organization staffed entirely by volunteers, so donations are tax deductible and are welcomed.
Like the old John Lennon lyric “Life is what happens to you while you’re busy making other plans” – having your legal and financial information updated, organized and easily accessible is a gift for survivors. The important thing is to get the work done. You can breathe easier knowing you’ve done the best you could to “clean up after yourself” in this life, and make their job easier!
In the next article let’s “think outside the box” about options for final arrangements for your body, and the value and importance of writing an Ethical Will and recording family history.
I am always looking for that "value added" service for my clients. Honor My Wishes is just that. Several clients used the materials to guide them through a loss of a loved one, and others have used it to prepare for the future. I encourage others in the accounting and financial service field to introduce their clients to Honor my Wishes.
Deanna Kaster, Cacade Accounting Company, Maple Valley, WA