Your Will, Living Will, Powers of Attorney, joint accounts, title to your home, and beneficiaries are all a part of your estate plan. They all coordinate to ensure that upon your disability and death, your assets are handled the way you want and are distributed to whomever you desire. An estate plan is just that … a plan. The following are descriptions and uses of each, but it is important to work with an attorney who can help you create and coordinate your plan.
Let’s start with the documents and designations you will need if you become unable to manage your health and your assets while you are alive.
Financial Power of Attorney
This is the document that is your designation of the person that you want to manage your financial affairs if you are unable to do so. The inability to your financial affairs can be temporary or permanent. If temporary, when you regain the ability to manage your financial affairs, you can take back that role from your designated financial power of attorney. The person you have designated as your financial Power of Attorney can act in all financial situations as if it were you making the decisions.
Healthcare Power of Attorney
This document designates a person to make your medical and healthcare decisions if you are unable to do so. This person can make all healthcare decisions for you during your incapacity up to and including ‘pulling the plug.’ This document can also be used to designate your choice of a Guardian should you need one.
This document is used to provide your healthcare professionals with your wishes regarding your health if you are not able to do so. These are written instructions of what you do and do not want to be done regarding your health. This document goes hand in hand with your Healthcare Power of Attorney. This document is not the Will that governs the distribution of your assets upon your death.
The designation of a joint account can assist you in managing your assets while you are alive and complete the distribution of those assets upon your death. If you are on a joint account with your spouse, child, or anyone else, you both can access the account as owners. If, for example, your spouse becomes unable to manage the account, but you are a joint owner, you can maintain access to the account and manage it for you both. Upon the death of one joint owner, the other becomes the sole owner of the account, so they do not lose access to the account and can manage it how they desire.
Joint Title to real estate or vehicles:
Joint title to real estate means you both own the real estate. The same goes for vehicles. If there is a survivorship designation, when certain affidavits are filed, the surviving joint owner will be the sole owner.
These are the persons or entities that are the named recipients of your assets upon your death. Beneficiary designations are most commonly used on bank accounts, investment accounts, and life insurance. It is important to review these designations regularly.
This is the document that determines who receives your assets that are not jointly owned or have a beneficiary designation upon your death. A will only governs the distribution of your assets after you have died, not before. Any gifts or transfers that you have made of your assets prior to your death cannot be reversed by the designations in your Will. A Will does not change any beneficiary or joint account designations either, as those designations are not governed by the Will but by the operation of law.
There are additional estate planning tools such as Trusts, transfer-on-death designations, and family corporations. It is important to review your plan and designations with a qualified attorney. Moseman Law Office, LLC can help you prepare your estate plan.