Estate planning doesn't have to be complex or confusing. You can save time, stay organized, and simplify the process. If you're not sure where to start, this resource will walk you through what to think about before you gather documents or talk to an attorney. Ideally, you'll consider everything from preparing for incapacity to potential long-term care needs. Not just for seniors, it's for any adult at any stage of life.
Preparing Powers of Attorney to Let Loved Ones Act for You
You may legally assign certain people to make medical, legal, and financial decisions for you if you can't. They're known as agents under power of attorney.
Choose a health-care agent for an advance health-care directive: Someone you know well, with sound judgment, and whom you trust, such as a close family member, can make health-care decisions for you. You may also name alternates if your first choice can't serve for you.
Signature requirements:: You sign as the principal in front of two witnesses.
Select an agent for a Durable Power of Attorney (POA): As with an advance directive, you can name a trustworthy loved one to act in your best interest for you when you can't. They may also serve as your health-care agent; to relieve the burden of both duties, however, you may want to choose someone else.
In Maine, unless stated otherwise, all powers of attorney are considered durable. You may state which powers you grant your agent in the POA, such as the ability to handle bank transactions and manage investments or a retirement plan. Under a durable power of attorney, the person you legally authorize to act as your agent will retain that authority if you become incapacitated.
Signature requirements: Sign the form as the principal in front of a notary public, who also signs and notarizes it (some states, such as Florida, also require the signatures of two witnesses, like for a will).
Estate Transfer Documents: Ensuring a Smooth Transition
Depending on your situation, you may need to create a will or a trust to authorize people to manage your estate and care for any of your dependents. The following tasks will help you prepare.
1. List any personal or business assets - These can range from savings or other financial accounts to a home, insurance proceeds, or other valuable property.
2. Calculate your net worth - Add up the approximate value of your assets.
3. Review beneficiaries - Who should benefit from your estate? Friends, relatives, caretakers, or charities? You can add beneficiaries' names to the following outside of a will or a trust:
- Bank or investment accounts
- Insurance policies
- Retirement accounts/pension plans
4. List any debts - Often, these include a mortgage or a car loan; you may also have medical debt and credit card debt.
5. Review organizations in which you have membership - Trade unions and certain nonprofit organizations, such as the American Legion, may offer death benefits.
6. Locate personal and/or business tax records. Consider potential tax liabilities and any property you own in other states.
7. List any income sources - They can include Social Security and any military benefits.
Planning for Dependents and the Right Administrators
List dependents: minor children, adults with special needs, or pets. Consider who can handle the responsibility of serving as a guardian or a conservator for them in case you pass away or become incapable.
Choose administrators: Decide who is trustworthy and responsible enough to manage your estate and your final wishes as a Personal Representative (formerly known as an executor) in a will or as a trustee under a trust. Business owners may also choose who they would want to serve as their successors under a succession plan.
Executing Estate Transfer Documents Properly
Not every estate requires a trust. If you have dependents or own assets, you may need a will. A will gives instructions on how to divide your property and who will receive it. Depending on the structure of your estate, a will might have to go through probate to determine the asset distribution. The State of Maine requires that the testator (the will-maker), or a proxy sign it (in the testator's presence) in front of at least two witnesses.
Separate from a will, a letter of instruction can include instructions for your burial plans, a draft of your obituary, personal data, such as passwords and your Social Security number, and a list of financial accounts. For dependents, you may include notes regarding their care, including names of medical professionals. Essentially, you can add any information you wouldn't otherwise include in your legal documents.
Storing Your Estate Plan Documents Safely
A fireproof safe or lockbox is among the most secure means for document storage; the contents of safe deposit boxes could fall into the wrong hands. Also, safe deposit boxes are closed upon the owner's death and opened once the probate process has been started.
You may want to give copies of your estate planning documents, together with any property titles, to your estate administrators and beneficiaries. Ensure they know the location of the originals, along with keys or security codes.
Considering Potential Long-Term Care Needs to Secure Your Future
As part of deciding whether you need long-term care, it's often advised that you get regular health check-ups. Your overall health is a major factor; on the other hand, an unforeseen event, such as an accident, could happen at any time. Thinking about where you will live in case you can't perform daily activities in the long term, your care options, and financial resources can prepare you if that time comes.
No two estate plans are alike; everyone's circumstances are different. Also, laws change and vary from state to state.
Before you create an estate plan, talk to your loved ones. Tax and financial advisors can also help. In the end, getting organized may relieve any anxiety surrounding estate planning and ease the process for you and those you love.
If you need help with your estate plan, our experienced attorneys would be happy to answer your questions. Contact us online or call us today: (207) 377-6966.