09/30/2024 | Press release | Distributed by Public on 09/30/2024 21:56
There are many types of estate plans, both complex and simple, revocable and irrevocable. However, all estate plans should accomplish four basic goals.
However, consider who and what doctors are most afraid of - lawyers and lawsuits. Doctors are always concerned about potential liability. More important, federal law governs and provides standards for the privacy of medical information. This federal law is known as HIPAA (Health Insurance Portability and Accountability Act of 1996). Not to be outdone, many states enact their own privacy laws. For example, California has its own privacy act known as the California Consumer Privacy Act (CCPA).
Federal and state law may prohibit your doctor from releasing medical information about you, including confirming that you lack the capacity to handle your affairs without an existing authorization to do so. If no written authorization is available, you may need to go to court to obtain the authorization to do so. This results in unnecessary delays and expenses. Your estate plan should include a written HIPAA authorization that is also compliant with your state's privacy laws to ensure that the person you designate is actually able to act regarding financial matters without going to court.
Your estate plan should also include an advance health care directive to ensure that the designated person or people are able to make medical decisions for you if you are unable to do so. An advance health care directive form typically provides very little guidance other than whether you would like your life artificially prolonged by extreme measures.
Consider also writing a personal directions letter with more specific guidance and discussion of your wishes. For example, do you wish to be at home? Do you want to know all the specifics regarding your medical condition? What should your condition be before treatment is stopped? Is the ability to communicate with your loved one important?
The personal directions letter is important for two reasons:
2. A good estate plan ensures your assets go to the right people.
When you die, your assets should go to your desired beneficiaries or family members. In my case, my assets would primarily go to my children. You need to detail your desired beneficiaries in a legally enforceable manner in your trust. If you don't, then your actual heirs may be established under the probate code of your state of residence, which may not reflect your wishes.Today's families include unmarried partners, domestic partners, adopted children, children from prior relationships, children going through a divorce and other relationships. Your trust or estate plan should ensure that your assets and legacy go to the right people that you designate.
Timing is particularly important if you have any of the following types of beneficiaries:
4. A good estate plan denies access to the wrong people.
If your assets are going to your children or other named beneficiaries, then you want to be sure those assets are not lost if your child gets divorced, files for bankruptcy or faces lawsuits or other creditor claims. You want to be sure the assets are not lost to the government due to a second estate tax or for the recovery of government benefits received. You don't want your beneficiaries to pay estate tax or incur loss due to court costs and probate fees.Finally, many people believe trusts are just for "rich people." However, you may own an array of assets, including your home and retirement accounts, such as 401(k)s or IRAs. You may also have investment accounts. All assets and accounts are typically liquidated and distributed to your beneficiaries.
You worked a lifetime to create a legacy for your loved ones, and careful planning is needed to ensure that your legacy goes to the right people at the right times and keeps the wrong people out.
This article was written by John Goralka fromKiplingerand was legally licensed through theDiveMarketplaceby Industry Dive. Please direct all licensing questions to[email protected].