A surprising two out of every three American adults do not have any kind of written estate plan.1 For adults who also serve as family caregivers, not having a plan in place can pose major risks for them and their entire family if they die unexpectedly.
While it can feel stressful and unpleasant to bring up the topic of estates to loved ones, getting the discussion out in the open can help ensure that everyone is on the same page when it comes to future and contingency planning. Here learn what family caregivers should consider when creating an effective estate plan.
What Elements should be in Estate Plans?
Not all the elements are needed in every estate plan, but the following list can provide a framework to begin planning discussion.
- Will. A will dictates how property is to be distributed, which can include loved ones, charities, or religious organizations. A will may also name someone as a guardian for any minor children or disabled adults.
- Trust. This legal agreement allows a person or institution (the trustee) to manage assets on the beneficiary's behalf. Trusts can be useful for caregivers, especially those taking care of a disabled adult who qualifies for Medicaid or other government assistance. Funds can be placed into a special needs trust available for the disabled adult's needs but do not "count" as assets for tax purposes. Trusts can often be combined with other planning tools, like wills or payable-on-death accounts, to create a seamless transition.
- Living Will/Advanced Directive. A living will is a type of medical directive that expresses the creator’s wishes regarding what type and extent of medical treatment will be offered if they are not capable of making their own decisions. For example, someone may want to preemptively refuse resuscitative efforts or opt to have life support removed if they are in a chronic vegetative state. Having these wishes clearly stated in writing can help loved ones avoid the anguish of not knowing which healthcare-related choices should be made.
- Power of Attorney.A legal or medical power of attorney allows the writer to legally name someone who has the authority to make decisions on their behalf if they are unable to. A power of attorney can be temporary (when undergoing surgery) or permanent (someone who has suffered a stroke and now has chronic cognitive issues). The person given power of attorney can pay bills, purchase or sell investments, or even list property for sale, so it is important to place a trusted person in this role.
Caregivers may sometimes feel as though the weight of the entire family's survival is on their shoulders. By having these documents in place and discussing them with your loved ones regularly, you will be able to plan for many contingencies and provide family members with guidance on what to do when you are gone. Contact us today to learn more.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
This information is not intended to be a substitute for individualized legal advice. Please consult your legal advisor regarding your specific situation.
LPL Financial Representatives offer access to Trust Services through The Private Trust Company N.A., an affiliate of LPL Financial.
All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.
This article was prepared by WriterAccess.
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1 67% of American have no estate plan. Here’s how to get started on one, CNBC