The Golf Masters Tournament is here. The Golf Masters Tournament is basically the Superbowl for golf fans, and golf itself isn’t for everyone. Some people are the type to work hard at perfecting their shot and achieving the lowest possible score, while others are the type to hit one ball into the water and throw their clubs in after it. To each his own (most of us likely fall somewhere in the middle). Whether golf infuriates or hypnotizes you, there are some lessons to be learned from the sport that can apply to your future. You want to give life your best shot, not just on the field but off it too. Estate planning can help you do that.
Create a Base
An estate plan is a way to organize your assets and affairs so that they transfer smoothly and wrap themselves up neatly after you pass on. An estate plan does not have to be complete and picture-perfect the first time around. Things change, and family dynamics change, and you will likely end up updating your estate plan multiple times in order to reflect these changes. But, having an estate plan provides a basic working plan in the event that something happens. This base is crucial to maintaining the financial health of you and your family.
Help Your Kids
Another great benefit of an estate plan is that it gives you the opportunity to help your kids. You are able to set up guardianship papers for them, which protects their wellbeing in the event of an emergency. You are also able to set up college savings plans for them, ensuring that they get at least some of their tuition paid. These savings plans have tax advantages, which means that you are saving more money than if you tried to save through a regular, non-IRS plan. Helping your kids is one of the pillars of estate planning.
Protect Your Assets
Your assets include basically everything that you own. When you die, do you know where your stuff is going? If you send your family to probate court because you don’t have an estate plan, you will end up giving your things to the state to pay off creditors. Your family will get whatever remains. You want your assets to go to the people you love, and estate planning will allow you to do that. There are many tools to protect your assets from the state.
Protect Your Business
You may also be a business owner with a lot of finances and plans to protect. Perhaps you haven’t thought about where your business will end up or what your business plans are in the event that you die. Estate planning can help you set up a succession plan or an asset division plan that will ensure that your business is not left rudderless if something happens to you. It’s an excellent way to ensure your business’s future, which also in turn protects your family’s future.
Financial & Physical Health
Estate planning protects both your financial and physical health. Financially, you can hire a power of attorney and arrange for your finances to be taken care of if you’re too sick to make decisions yourself. The power of attorney is a trusted loved one. You can also put forth healthcare directives that will deliver instructions about your care to doctors and hospitals, even if you cannot communicate them yourself.
If you love golf, then we wish you the best when watching the Golf Masters Tournament. If you’re not a big golf fan and/or are bad at golf, that’s okay—you can still learn a lot from the sport and apply those lessons to your own life. Estate planning will help you take the best shot you can at life, on and off the course.
Well, the above title says it all. You got behind on your taxes, the IRS is mad, and you need to fix it. While the IRS has been painted as the boogeyman since America started collecting taxes, it is a necessary evil and doesn’t have to be quite so scary. If you have overdue taxes, you already know that you can’t waste another minute. Here are some ways you can get caught up on your taxes (as well as what happens if you don’t).
Don’t Wait for Them to Contact You
When it comes to the IRS, no news is not good news. If they haven’t contacted you about back taxes, that doesn’t mean that they’re unaware. The system is automated. It is likely that they have or are about to receive an alert about your unpaid taxes. Waiting for them to contact you also looks like you’re trying to avoid paying back taxes, and that is less than ideal when asking them for leniency.
A Payment Plan
There are options for payment plans. The IRS knows, logically, that at some point, people are going to run into problems and won’t have their tax money ready. The IRS offers payment plans to eligible individuals. These are installment agreements, which means that you pay a set amount over a repeated period of time (like a mortgage, for example). A payment plan will work for you if you believe you can pay off your taxes within the time period. Note that there will be fees associated with the plan, and you might be required to pay by direct debit.
The Fresh Start Program
The Fresh Start Program works well for small business owners and those who are self-employed. Installment agreements are part of the Fresh Start Program. If you owe up to $50,000 you can pay over a period of six years in the form of direct debits. This is called a “streamlined installment agreement.” Through this type of agreement, you can file to have your lien removed ahead of time if there is one. You can get the notice of the lien withdrawn if you show that you’re paying on time and according to plan.
Offer in Compromise
Offers in compromise are another part to this Fresh Start Program. Part of the program entailed giving the IRS more flexibility when looking at your current situation. With the offer in compromise, the IRS looks at your debts, what’s going on, why you can’t pay your taxes, and equity in your assets. They may be able to settle your debt with you at a lower price. The IRS will give you that offer when it is a reasonable amount that they expect to receive within an allotted time frame. This isn’t for everyone, so check to see if you are eligible.
Of course, there are penalties for back taxes. That’s how they arrested Al Capone. He admitted to not paying income taxes, and a judge sentenced him to eleven years. He didn’t do any comparable time for his other crimes.
That’s not to say that that’s what will happen to you. More likely, there will be a penalty fee. The fee is usually an additional five percent of the amount owed per month. If you don’t pay for sixty days past the due date, the minimum fee is $135 (or 100% of what you owe—whichever number is smaller). Jail time doesn’t happen unless it is in severe cases, which, if you take care of this now, this won’t be.
Hopefully, this article has shown you that there are options when it comes to paying back your overdue taxes. It’s important to contact the IRS quickly to show that you’re aware that you owe taxes. They are likely more willing to work with you if they know you can start putting at least some payments down.
This March 17th, as it has been since the early 1600s, is St. Patrick’s Day. St. Patrick is the patron saint of Ireland, and it is actually a public holiday in the Irish Republic. St. Patrick’s Day is the day of the patron’s saint’s death. The day is celebrated by wearing green, drinking beer, and, in pretty much every country, having a parade. It is most often associated with luck and gold coins, yet you should leave the luck to the parades. When it comes to your future, you don’t want to take any chances. Your pot of gold is a well-crafted estate plan; here’s why.
One place where you don’t want to test your luck is sickness. Illness can creep up on anyone, and it’s important that you don’t let it catch you unawares. Consider obtaining a healthcare directive and power of attorney. A healthcare directive is a set of instructions that you submit to the hospital ahead of time. In case you’re too sick to tell the doctors yourself, they will go by the instructions you leave them. This works well if you have special needs or religious views that you want respected.
A power of attorney helps you manage your healthcare and/or financial decisions when you’re too unwell to do it yourself. You selected a trusted individual to be in charge of the decision. This individual should know you well, and they should respect your decisions and know what you want. This position is vital, and it takes a lot of consideration.
…And in Health
When you’re healthy, you might feel tempted to test your luck. After all, you don’t see sickness or anything on the horizon. What’s the worst that can happen? As everyone knows, that question is a loaded one. When you’re healthy, you can get a lot done with regards to your estate plan. You can include directions on transfers of assets, medical care, creditor repayment, and more. Seize the day when you are healthy to prepare for when you are not.
Luck Won’t Keep You Out of Probate Court
Probate court is where your assets go when you don’t leave instructions on what to do with them. Even a last will and testament is subject to probate court. A way out of it is to set your assets up in a living trust, which will nominally take effect once it is signed. This way, your assets go to your beneficiary (via your trustee) without sticking them in probate. Probate court wraps up estates by paying off debts first and then splitting the remains. It also takes a long time, and it is very expensive. It is not something you want to put your family through, to say the least.
Safeguarding Your Gold
And by “gold,” we don’t mean shiny metal. Your home, car, furniture, collectibles, etc.; everything you own is an asset. You want to protect these from probate court and keep them in the hands of the people you love. You can do this by working out a well-crafted estate plan. Safeguarding your treasure is a matter of good estate planning.
(And Your Kids, Too)
If you have kids, you will want to make sure that someone is there to take care of them if you’re unable to do so. You can include guardianship in your estate plan. The guardian you choose should be one who is, obviously, responsible and who consents to become the guardian.
Luck is best left to the Irish, and St. Patrick’s Day is a fun time every year. However, don’t get swept up in the fervor and think you’re untouchable. It’s time to craft an estate plan that will be better than anything a leprechaun can offer. There’s a way to structure your future that protects yourself, your family, and your assets without cutting corners. It is best to contact an estate planning attorney for assistance.
International Women’s Day is celebrated around the world on March 8th. IWD came about in 1909, when the Socialist Party of America organized the day as a way to celebrate women workers. The SPA organized the event in New York, but it spread to become a nationwide celebration in 1910, when the International Socialist Women’s Conference decided it should be celebrated each year. The day has been adopted by the United Nations, as well as a host of other countries.
It is a day of civil awareness and action. Most importantly, it is a day to celebrate the women in your life. Women do a lot of work and, in all too many cases, receive little credit. Protect the women in your life by helping them plan for their future.
Preparing for the Future
The future is, of course, unknowable. While you might think that you won’t get sick or become incapacitated, you never know. That’s not a bright subject to think about, but it is one that estate planning deals with all the time.
In your estate plan, you should consider getting a healthcare directive and selecting a power of attorney. A healthcare directive is a set of advance instructions with which you can provide hospitals and other medical personnel in the event that you are too sick to tell them yourself. Similarly, a power of attorney will help make your financial and medical decisions for you when you are feeling too unwell to make them yourself. This way, you can prepare for your future and decrease the stress on the family in your life when you become ill. Helping the family is helping the women in your life.
Your children should be protected as well. Part of a healthy estate plan is selecting a guardian for your children should something happen to you. All children, both sons and daughters, need a healthy role model for themselves. When you’re picking a guardian, make sure it is someone who will take care of them day to day. Consult with your proposed guardian before you make the decision.
Taking Care of the Women in Your Life
If you think of the women in your life, you may want to leave them something to remember you by. Don’t just consider it—do it. If you want to leave your home or other assets to a loved one, make sure to put that into a living trust, which will help keep the asset out of probate court. This way, your transfer gets into the right hands without any outside confusion.
If you know women in your life who are aging and who have not started an estate plan, you should encourage them to do so. An estate plan isn’t just for the elderly—younger individuals can benefit as well. But, it becomes particularly important as you get older. The process doesn’t have to be complex or difficult. Connect the women in your life with an estate planner who will help them prepare for their future. This proactiveness is the best way to counter an unknowable future.
Women’s education rates are soaring, and that’s amazing. Continue to keep that trend going. Consider putting savings into a 529 plan. These are tax advantaged savings plans that will give you tax breaks as you save for the future college student’s education. Another form of the 529 plan is a tuition plan, where you pay the cost of the tuition in total and it is applied to the school. These plans differ based on state and university. But, they are well worth considering.
International Women’s Day is a way to show the women in your life how much you love them. There are a lot of ways that you can express that love; preparing for the future is one of them. This IWD, remember the sacrifices women have made and continue to make every day to make the world a better place.
February is Heart Health and Stroke Month, raising awareness of the problems that many Americans face when it comes to cardiovascular health. The statistics certainly seem to suggest that there is a problem. According to the CDC, one in four deaths in America are caused by heart disease. That is 610,000 people. Heart disease is the leading cause of death for both men and women, with coronary heart disease being most common. The idea behind this month is to discuss healthy eating and exercise habits that will reduce your risks of contracting these illnesses.
Unfortunately, with the commonality of heart disease, it is all-too-realistic that there may be a chance of heart-related illness affecting your family. When that happens, you need to be prepared for anything. Here is how estate planning can help:
While there are many different possible ailments that come along with heart disease, there is a strong likelihood that you might be too incapacitated to make your own decisions. That is definitely true when it comes to a stroke. During a stroke, oxygen to your brain is cut off, and the among the first parts to lose their functioning is memory. That’s especially a problem if you have certain wishes for your healthcare that you formulated when you were not sick.
A healthcare directive is a set of instructions for your hospital, doctor, nurse, etc. to use when they are deciding what care to give you. The directive ensures that your wishes will be respected. Developing one when you are healthy will protect you when you are sick.
Powers of Attorney
Your powers of attorney for finance and healthcare also come into play when you are incapacitated. They make financial and healthcare decisions on your behalf when you are too sick to make them yourself. These positions come with a lot of responsibility. When selecting your POAs, you want to make sure that you choose someone who can be logical, level-headed, and respectful of your wishes. Discuss with your proposed powers of attorney your decision to appoint them to that position. Make sure they are on board before you nominate them.
Unfortunately, as seen in the statistics above, heart disease is deadly. There’s no way around it—it can be a disease that ends lives. If you’re concerned about yourself or a loved one, make sure you or your loved one have a plan in place to protect assets in the even that this happens. Ensuring the smooth transfer of property through a living trust or a similar document will allow your affairs to wrap up easily. It’s not exactly a spirit-lifting topic, but it is an important one if you want to be prepared for anything.
Avoiding Probate Court
Probate court is a lengthy, arduous process. If you die without a will (or even with a will), your family will end up there. By putting in place a living trust, you can get out of probate court. Your assets will be divided in a way that best benefits you and your family. Otherwise, they will most likely be liquidated to pay off your creditors first. Then, your family will get what’s left. That’s not the asset plan you or your family deserves.
You can never be too sure that there won’t be an illness striking your family. Though that’s not exactly a topic any of us want to think about, it is one that happens. The above tools and resources are useful for preventing and protecting against asset loss or diminishment as a result of illness. Consult an estate planner today.
One thing that presidents have (mostly) been is responsible. Presidents can teach us a lot. They are usually hard-working, dedicated individuals. Despite our political differences, much can be learned from these leaders of the free world. That includes tenacity, perseverance, and responsibility. You might be thinking of your favorite president now. As you can imagine, there were probably a lot of sides to them that the world didn’t see. But they kept a dedicated cabinet around them that helped them make important decisions. Presidents have to be prepared for anything, and so do we.
Here are ways that you can emulate responsibility (like your favorite president) when it comes to your estate plan:
If you have kids, there are two major areas in which you can show responsibility. These are guardianship and college savings. Of course, the whole estate plan itself goes towards helping your kids, but these two tools are most specific to them.
Guardianship. In your estate plan, you can include information about guardianship and who you want to take care of your children in case something happens to you. God forbid anything does, but you need to be prepared for anything, just in case. Choose the guardian that will be most responsible and nurturing day-in and day-out. Check with the proposed guardian first to make sure that they are okay with being named for guardianship.
College savings. What you may not realize is that the IRS offers a tax-advantaged savings plan for you if you want to save for your kids’ college. You can choose a savings account, or you can pay the whole of tuition as a credit to be applied later. This plan, called a 529 plan, will help you provide for your child’s future. Each state has its own rules, so make sure that you consult an estate planner to walk you through the process.
Your home and personal property is important to you, of course, but have you thought of what you will do when you pass on? You want to ensure that your assets are transferred to people you know will take care of them. Or, perhaps you want the assets liquidated upon your death and the proceeds distributed. A trust is often the best way to accomplish this asset protection.
If you become sick and are in the hospital, you may not have the capacity to make your own decisions. Yet, at the same time, you might have specific wishes for your care. In order to communicate those instructions after you’ve become incapacitated, you should have a healthcare directive. This document contains your instructions to doctors, hospitals, nurses, hospice, and others who can ensure that you get the care you need and want.
Similarly, you might not be able to give instructions about your finances. This is why you should appoint a power of attorney to make these decisions for you. A POA is a trusted official that you designate to take care of your money and allocate your resources appropriately. This is an extremely important position. When appointing your POA, think long and hard about who will best carry this out.
Above all, responsible estate planning is about your legacy. You don’t want to stick your family in probate court for month after month. Executing a well-planned estate plan will ensure that your family is able to quickly and conveniently wrap up your affairs.
The list above includes things that are important to everyone. They matter greatly when it comes to your quality of life. Make good decisions when it comes to your future and protect the list above tenaciously. Responsibility is one of the most important traits when it comes to your estate plan.
Valentine’s Day is the season of red hearts, chocolate, and flowers. It’s easy to get caught up in the V-Day rush. You’ve probably made plans to go on a date (or not), and the season of love may have you thinking about your assets and who you want to have them. If it’s not getting you thinking about that, you should. All too often, people let love cloud their judgment. It’s not difficult to understand. When you love someone, you want to help them, and that might lead you to make financial decisions you regret later on. That is why it is important to consult with an estate planner before you decide to transfer any assets or make big decisions. You don’t want to end up doing something you regret.
Here are some ways in which love might cloud your judgment when it comes to your estate:
Your home and personal belongings are probably among the most important material things to you. When you think of what you want done with them after you’re gone, you likely want them to go to someone you love who will take care of them. We all love our relatives, but not all of them are fiscally responsible. When you’re considering who you should pass on your assets to, think through the scenario fully and take an objective look. Because, often, we have a subjective view of our family, you may want to consult an estate planning attorney about your proposed transferee.
Powers of Attorney
Your powers of attorney for finances and healthcare make decisions for you when you’re too incapacitated to make them yourself. They decide where your money goes and what it goes to pay off, and they also decide what happens to you in the hospital. Needless to say, these are huge responsibilities. And they require a cool head and a lot of focus. You might love your spouse, but you also might think that they wouldn’t be the right fit as POA. That’s not an easy conversation to have, and an estate planner can help you with that. But one thing you do not want to do is make someone your POA just because you don’t want to hurt their feelings.
If you have minor children, you probably have some idea of who you would leave in charge of them in the even that something happened to you. Make sure you write this down in your estate plan. A guardian is the person who will shape your child and help them become an adult. That has life-changing implications. When selecting your guardian, think about how you want your child’s future to play out. Consult with the proposed guardian before putting them into your estate plan.
New People Too Soon
So, you’ve met someone, and you really like them. And that’s great! It’s always a good thing to be able to envision a future with someone. But, not to be a wet blanket, make sure that you wait a little while before giving them a position of power in your estate plan. You don’t want to rush into anything too quickly. For example, if you meet someone and get caught in a whirlwind romance, you might decide to leave them your house. However, if you change the paperwork, they end up turning out to be less-than-ideal, and you die without making the change back, that could spell disaster. You’ve just given someone you don’t even like a house. The point is, don’t rush into anything when it comes to your assets.
This article probably isn’t the most fun Valentine’s Day read, but it is important. It’s a shame when people allow their love to cloud their judgment and cause them to make decisions that can harm them or their family. Talk to an attorney before making any major, spur-of-the-moment decisions. If there’s one thing you don’t want to do in a rash of decision-making, it’s your estate plan.
Once again, tax season is upon us. This time of the year isn’t exactly pleasant, but it is inevitable. While asking for positivity when it comes to taxes might be a stretch, you should at least be prompt about filing. It’s better to just get it over with. There are consequences if you get them in late, and the consequences range from irritating to serious. Here are some tips to preparing your taxes in time, as well as some changes to know about. There are many new rules in effect with the new presidential administration.
There is a chance that your filing might look very different this year as opposed to last year. That’s why you should throw out the playbook from last year and look at your taxes with a fresh eye.
Child Tax Credit
The new tax reform laws boosted the child tax credit. If you have kids, you will probably benefit from this new rule. If you have children who are sixteen or under (and who qualify for the credit), the amount you can claim is $2,000. That’s double 2017’s amount, which was just $1,000. Also, there are new guidelines as to who can claim the tax credit. These new income guidelines expand who can take the credit. This means that even if you couldn’t take it before, you may be able to now. This is an example of why it is important to take a look at your taxes anew.
State v. Federal Taxes
Note that state taxes might not mirror federal taxes. You could qualify for federal deductions while seeing little to no change in your state taxes. Some states may have a flat tax, while others do not. While this is not news to someone who has been filing for a while, new filers should not get caught unawares by the difference in the systems. Making a mistake might end up costing you. This is why you shouldn’t be afraid to consult a tax planner for assistance. What you pay them to do your taxes is far less what you’ll owe the IRS in penalties.
Standard v. Itemized Deductions
One of the most notable changes the tax reform law brings has to do with standard and itemized deductions. The standard deduction has increased. Itemized deductions, by contrast, have decreased. For many households, it now makes more sense to take the standard deduction than to itemize. At the end of the day, the principle is simple math. If the itemized deductions give you more money, itemize. If the standard deductions give you more money, take the standard deduction. Just make sure you’re adding up the numbers to see which one gives you the higher return.
Think About Retirement Accounts
Another tax tip is to think about retirement accounts. Come 2019, retirement plans such as a 401(K) or IRA have higher maximum contribution limits. This means that if you start now (or keep up with the account you have), you can increase tax savings even more, as these accounts are tax-advantaged. This tip works for any year, however. Retirement accounts are an excellent way to both plan for the future and save money.
Consider Electronic Filing
Think about filing electronically. The error rate for electronic filing is lower than it is for paper filing, and electronic filing is also faster. The second it goes through, the IRS acknowledges that they have received your tax filing. Additionally, it is easier on the environment to not use paper. Note that if you make less than $58,000 (AGI), you can file electronically for free.
If you’re late on your taxes, the consequences will hit April 15. The monetary fine ranges from 5% to 25% of the taxes you owe. This is per month, not per year. You might also forfeit your refund check. At worst, you could be arrested. The IRS will send you a bunch of paper notifications and even a representative to knock on your door before this happens, but arrest is the last resort. If you owe more than $25,000 and you’re evading payment, that could mean a jail sentence.
Once again, April 15th is the deadline. April 15th falls on a Monday this year. These tax tips are just some of the many ways to file taxes promptly while saving money where you can. No one likes paying taxes, but you have to. Hopefully, these tips will make the process a little more painless. Consult a tax planner to maximize savings and minimize error.
A New Year brings tons of opportunities for you to make and achieve resolutions. Whether you’re improving your diet, finances, weight, health, or lifestyle, make this year your year. A big part of ensuring that you’re ready to meet the New Year head-on is to plan properly. Planning can help safeguard against challenges. Think about it. For weight loss, you plan your meals and exercise routine. For finances, you plan out your budget. Planning is a key part of meeting your goals.
Estate planning is no different. Throughout the year, you should not only think ahead in terms of your lifestyle; you should also be prepared to meet financial challenges you may come across. Here are some key life events or changes and what you may want to do to plan for them.
New Family Members
Is a new family member joining you? Perhaps a relative is expecting a baby or someone in your family is getting married. If that is the case, you should adjust your estate plan to reflect these new changes. For example, if you have grandchildren (or are expecting some) and you want them to receive some of your estate, consider setting up a trust that will grant them the assets once they are of age. A trust will let them receive the asset immediately upon the date of your choosing, as it goes into effect right away. This will allow them to avoid probate court, too.
…Or Maybe Just Some New Assets
Maybe you don’t have a new family member, but you did get some new assets. Perhaps you’re buying a boat, new stocks, another home, etc. in 2019. You will want to think about what will happen to that asset after you pass away. While that’s not exactly a positive thing to consider, it’s important to ensure that the asset, if you own it, goes into the right hands. Again, as stated in the previous section, you could set up a trust. Or, you could set up a different type of transfer. Either way, put these new assets into your estate plan to guard them against probate court.
Any Upcoming College Plans
If your kids or grandkids are considering college, you might want to take a look at a 529 plan. This is a tax savings plan that the IRS offers. Another name for the 529 plan is a “qualified tuition plan.” The IRS offers a 529 plan to encourage people to save up for college. You can choose from either a prepaid tuition plan or a college savings plan. Prepaid tuition plans let the plan holder purchase credits from their chosen educational institution, while savings plans act as investment accounts for someone saving up to attend college. Each comes with their own tax advantages, benefits, and disadvantages. If someone in your family is attending college and you want to help them out, consider taking a look at your state’s 529 plan.
People get sick. Unfortunately, it happens, and the best way to deal with it is to meet the challenge head on. To prepare for this unpleasant surprise, you should complete a healthcare directive and name your power of attorney. A healthcare directive details your instructions to the hospital or doctor taking care of you. The directive gives these instructions if you are too incapacitated to deliver them yourself. A power of attorney also lets a trusted individual (who you select) control your finances and make financial decisions on your behalf. Both of these financial tools give you autonomy in your decision-making, even when you are sick.
Aging: Still Inevitable
Another reason to take a close look at the sufficiency of your estate plan is the inevitable fact that people age. You will want to begin thinking about where you want your assets to go after you pass on. An effective estate plan will allow your assets to pass to your family without the involvement of probate court.
These are just some of the changes you might experience this new year. Right now, we’re only in the first few weeks of the year. There is still time to plan ahead and avoid any unpleasant surprises. When it comes to your other New Years’ resolutions, you will want to get a plan together for success. Your finances are no exception.
Hopefully, your New Year is off to a good start! There’s no telling what 2019 will bring, and that’s both exciting and maybe even a little scary. 2019 will probably come with some surprises, and these surprises can be pleasant or less-than. One way that you can deal with challenges successfully is to plan in advance for them. Formulating concrete plans for less-than-pleasant surprises will help take the edge off them if they happen.
People get sick, and people pass away. These types of things are out of our control. In order to at least make these events more manageable, you should plan ahead. Handling these events is not out of your hands, even if the occurrence itself is. Here are some “worst case scenario” surprises that 2019 might (but hopefully will not) bring and how to deal with them.
Sickness: Making Healthcare Decisions
Sickness can be serious. You also may have some predesignated notions about how you want doctors and nurses to care for you when you are sick. Just because you are incapacitated does not mean that your wishes will be ignored. By setting up a healthcare directive, you ensure that your care preferences are honored. A healthcare directive is a document that details any directions you may have for doctors. A classic example of this is a “DNR” (Do Not Resuscitate) instruction. These are the types of closely-held decisions you want upheld even if you cannot communicate them verbally. A healthcare directive lets you do this.
Sickness: Making Financial Decisions
Another important decision-making area is finances. Your finances enter perilous territory when you are sick. Before this happens, you should nominate a power of attorney to take care of your finances. This POA is someone you trust. You know he or she will make the best decisions for you. You can give him or her instructions while you are healthy that will give them guidance about what to do in the event you become incapacitated. Your finances do not have to suffer just because your health is in a bad situation. Nominating a POA gives you control over your money.
Death is also inevitable. Depressing as that may sound, it is, sadly, true. Death also definitely qualifies as an unpleasant surprise. If you die, do you know where your assets and property will go? The answer “the courts will decide” is not going to work. Probate court will divide your estate and pay off your creditors first. Then, your family will get whatever is left. By setting up an estate plan with tools such as living trusts, you can ensure that your assets will go to the people you select. You avoid saddling others with the burden of probate court when you structure your estate plan properly.
If you have children and something happens to you, you will obviously want someone responsible to take care of them. Setting up guardianship in your estate plan allows you to appoint the guardian. This way, you will have peace of mind that your kids will be taken care of if something happens. If you do not have guardianship set up, the court will appoint a guardian, and it might not be a person you would choose. Make sure to ask your chosen guardian if they agree with your decision before setting the guardianship up.
Lastly, divorce is very common. More than half of marriages end in divorce. If you are undergoing this unpleasant process, you know that jointly-owned property is often very difficult to unravel. Deciding who owns what is not easy, especially if the divorce is acrimonious. When working on your estate plan, you will need to adjust for the divorce. If you left something to your ex-wife in the event of your death, you might want to change that. An estate planner can help you with this. The whole divorce process almost always affects estate plans, so it is best to face these changes head-on.
This article is somewhat of a bummer, but it is important to prepare for any unpleasant surprises that 2019 might bring. While you shouldn’t be pessimistic, optimism does not mean lack of preparation. Guarding your finances and protecting dependents is essential to a well-rounded estate plan.