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We all know we “should” do some planning for our future, but how many of us follow through with it. I’m talking about planning for someone to help you manage your financial assets and your health care decisions if you are unable to do it yourself. If you’ve been diagnosed with cancer or another disease, you usually have the ability/time to do some planning. However, if you have a sudden medical issue or severe accident, your ability to plan can be lost. Many people think planning is just for the wealthy or something their family can figure out on their own. Planning is for EVERYONE. When should you plan? NOW.
If you do not do any planning and you lose your ability to communicate your decisions, a court may need to appoint someone to manage your financial assets (conservatorship) or to make health care decisions (guardianship) for you. Both of these scenarios require a costly court proceeding and the appointment of someone (you may or may not have chosen) to handle these decisions. If your family cannot agree on who should step in to help, the court may appoint a neutral party, someone you don’t even know.
A simple way to help avoid the need to have a court step in and appoint people to act on your behalf is for you to appoint those people yourself in two key documents. The first is a durable power of attorney (“POA”). This document is a tool that gives you the ability to name a trusted individual(s) to access your financial accounts and step into your shoes to manage your assets when you are unable or unavailable. If you are ever incapacitated, this document can be used and should avoid the need to set up a conservatorship. By setting up a POA, you get to choose who you want to be in charge of your assets.
To help avoid the need for a guardianship, you should complete a health care directive. This document is a tool that gives you the ability to name a trusted individual(s) to make health care decisions on your behalf when you are unable. By setting up a HCD, you get to choose who you want to be in charge of your healthcare and how you want your healthcare wishes carried out.
Finally, one of the greatest gifts, you can give your family or friends, is to put together a notebook for key information. Get a book put together that contains: a list of your assets, where are they located, what financial organizations/advisors should they contact. How do you access those accounts (e.g. if online, what is the website, username and password). A list of personal information – your address, phone numbers, birthdates, social security number. Who is your doctor, how can they be contacted, medical insurance information. The location of keys to the house, car, safe deposit box, storage shed, etc., including titles for vehicles. Include your estate planning documents or provide a location to find your estate planning documents.
Once you’ve put together this notebook, where do you keep it safe? Storing all the information in a safe deposit box at the bank can create some challenges. Only those individuals that are listed with the bank on that box can access the box. Even if you give your child or close friend a key, if they are not listed on the box, they cannot use the key to open the box. Some clients will divide the information so that less personal information is easily accessible and the more sensitive information can be kept separately. Some clients have used a flash drive to store information and given it to a trusted family member or friend. Other clients have chosen to keep their notebook in filing cabinets at home or in a home safe. You will need to determine what is the best way to safeguard the information but yet make it accessible for your situation. A little planning can go a long way.
Please send me an email at rene@breenandperson.com with any topic suggestions or requests you may have. Although we cannot give you legal advice through the column, we can provide some general information that may be helpful for you to know. Our purpose is to educate and we hope that you can take something new away from this column each time you read it.