As a single individual, you may feel overwhelmed when you think about who will step in and make decisions for you if you cannot make decisions for yourself and who will receive your money and property when you die. You may consider your parents or siblings, but depending on whether they are living and the nature of your relationship, they may not be an option. Having an estate plan is important to ensure that your wishes are carried out during your life and after your death.
A time may come when you will need someone to handle financial transactions or make or communicate medical decisions on your behalf. If you have not already chosen someone in a properly executed document, the court will step in and, using state law, choose the person who will make the important decisions for you.
Agent under a Financial Power of Attorney:
The agent in a financial power of attorney is the individual who carries out financial transactions (such as signing checks or opening a bank account) on your behalf. The duration and scope of the agent’s authority are spelled out in the financial power of attorney. If you have no family member or friend whom you trust to manage your financial transactions, you can hire professionals to assist you.
Agent under a Medical Power of Attorney:
If you cannot communicate or make medical decisions, someone else will have to do it for you. By properly naming this person in a medical directive, you retain control over who will make medical decisions on your behalf instead of allowing a judge to select someone to make such decisions.
If you do not have an estate plan prepared, your state’s intestacy statute may determine who receives your money and property, and the amount each legal heir will receive. Intestacy laws vary by state, but generally speaking, money and property go first to a surviving spouse, then to descendants, parents, siblings, and nieces and nephews, in that order, depending on who survives you.
If you have a life insurance policy or qualified retirement plan (such as a 401k or IRA), make sure you have designated the appropriate beneficiary or beneficiaries. Failure to designate a beneficiary will cause the policy or account to be distributed according to the default rules of the agreement, which may require the necessity of going through probate and causing unintended income tax consequences.
Completing your estate plan allows you to take control by providing instructions about what is to happen during your life and at your death. Call me today at (480) 719-7333 to learn more about how I can help ensure that your legacy is protected and that the people and causes you care about are provided for.