As difficult and foreign a topic as this can be, especially for those who are younger, estate planning can ensure your wishes are carried out according to your intentions in the case of a premature worst-case scenario. Your state of residence has laws which will make those decisions for you, however they may not align with your own choices. One part of this is managing both your financial and medical affairs in the event you require assistance due to being incapacitated and unable to make decisions for yourself. The other aspect is carrying out arrangements after your death including your funeral/burial as well as how your assets will be distributed to reflect your values and those individuals important to you. The documents listed below are instrumental in the estate planning process. A financial advisor can work with you to help identify your wishes in these various areas and can assist you with finding legal representation to execute them in the proper manner. There are other options beyond this list, such as a trust agreement, which may be appropriate for certain individuals and an attorney can provide those recommendations in consultation with you.
Will
Your Will decides who receives your assets after death that are subject to probate, which include those that do not pass by beneficiary designation (like retirement accounts and insurance policies) or survivorship. These assets would likely include any taxable investments, bank accounts, real property, and personal property. Probate is the legal process of proving that the will is valid and assigning an executor to carry out the provisions. The trusted executor who you select will administer the estate and ensure that your heirs receive the assets you select in the proper proportions.
Durable Power of Attorney
Your Durable Power of Attorney gives the agent or co-agents of your choice the ability to manage your financial affairs. This power can be limited in scope to certain types of transactions or wide ranging including the ability to make gifts on your behalf. This power can be effective immediately or springing upon your incapacity as determined by your physician. If your primary agent is unable to act, successor agents you name in order will take their place.
Medical Power of Attorney
Your Medical Durable Power of Attorney gives the agent of your choice the ability to make decisions regarding your medical care upon your incapacity. Your agent would be able to act on your behalf until you regain your own ability. You can place limitations if desired upon your agent’s authority. It is important to consider who would best be able to handle emotionally the considerable responsibility.
Advance Directives
Advance Directives or a “Living Will” allow you to make certain wishes known ahead of time regarding your healthcare choices in the event you are incapacitated. These decisions usually occur in the event you have a chronic and irreversible or terminal condition. You may only want to be made comfortable or you may want life-sustaining methods to be used. These are not easy decisions but planning ahead will help give guidance to your family.
HIPAA Authorization
HIPAA Authorization allows those of your choosing to have access to your medical records to the extent you wish. Your acting agent of your health care power of attorney should already have this ability, but you may want others to be able to access this information as well. This can help your family stay informed about your care directly versus always having to go through the power of attorney route. This authorization is typically effective immediately until it is withdrawn, or a specified period has elapsed.
Appointment of Guardianship
If you have minor children and both parents were to predecease them or become incapacitated, you will want to have in place who would be best suited to care for them in your stead. Those guardians should have the willingness and capacity to take on this major responsibility, and ideally they will also share similar beliefs as you regarding parenting. Also important to consider is leaving resources, either through existing assets or life insurance policies, to help provide for your children’s expenses.
If you have questions regarding finding an estate planning professional, or about any other financial topic, Powercat Financial is here to help. We offer free and confidential appointments in-person and via zoom. Appointment requests can be made online at www.ksu.edu/powercatfinancial.
K-State Student Legal Services is also a resource on campus which may be able to provide some estate document preparation and consultation services. You may find out more info at www.k-state.edu/legal/.
Michael Pumphrey, AFC®
Peer Counselor I
Powercat Financial
www.k-state.edu/powercatfinancial
