Ironically, though it is trendy to talk about disruption, the disruptor that is most likely to have a massive impact on many of us —longer life spans—frequently goes without our true attention. The longer we live, the greater the chances that at some point we may be unable to care for ourselves—or manage our own affairs. That’s why estate plans have to include plans for ourselves.
While it will be wonderful if you never need them, estate planning experts advice putting a financial power of attorney and medical power of attorney in place. A revocable living trust can also be very helpful. Wilson Law Group explains:
Financial power of attorney. A financial power of attorney allows you to appoint somebody else to manage your finances on your behalf. For example, they can manage your bank accounts or sign papers at a real estate closing for you. Depending on your state’s law, the document can be set up so that it takes effect immediately or only upon the occurrence of a future event (e.g., you become mentally incapacitated).
Medical power of attorney. A medical power of attorney gives an individual of your choosing the legal authority to make decisions about your medical care when you no longer can. You have the discretion to limit the kinds of decisions that your chosen representative may
Revocable living trust. A revocable living trust contains money and property that you transfer into it, and you choose a person (the trustee) to manage it for your benefit while you are still alive. You can set up a living trust in such a way that it can be changed or revoked except when you do not have the mental ability to do so or have passed away. A living trust can also specify the distribution of money and property when you die.
When you work with a lawyer to create the trust, you’ll appoint a trustee to manage and distribute the assets. You can include specific details about how you wish for this to be done, and other expectations for the trustee in the trust agreement. Given the fiduciary responsibilities undertaken by trustees, the trust agreement may require the procurement of a trustee bond. A trustee bond is a type of fiduciary bond that helps to protect the interests of the trust and beneficiaries by guaranteeing the faithful performance of a trustee in accordance with the law. As a leading national provider of many types of fiduciary bonds, Colonial Surety makes it easy and efficient to obtain a trustee bond. Just get a quote online, fill out the information, and enter a payment method. The bond can be printed or e-filed from anywhere.
When there is family conflict or disappointment about estate plans, it’s typical for questions about mental capacity to arise. Proactive estate planning (done while we are well) helps to prevent strife later. Wilson Law Group offers these additional estate planning tips: Importantly, for these documents to have legal authority, you must have mental capacity when you sign them. To ensure capacity, you may want to obtain a professional opinion from a licensed mental health provider stating that you are of sound mind and understand the meaning and effect of the documents you are signing. Alleging lack of capacity is a common basis for contesting an estate plan.
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