Before a Death | Legal Steps to Take
In most cases, estate planning is done well in advance of a significant health event or death. This is, of course, the preferable timing. But what happens when it is suspected that death may be imminent? Below are a few action items to address immediately.
Create a Plan
This may be obvious, but if no planning has been done at all, getting at least the basics in place – including a will, power of attorney, and healthcare documents – will have a large impact on what comes next. For example, the appointment of a power of attorney can put someone in position to get your financial affairs in order, including simple tasks like keeping current with bills, along with more notable items such as getting your accounts tidied up with beneficiaries.
While your power of attorney often has the power to sign certain legal documents, they are not able to execute a last will and testament on your behalf. Do not underestimate this time-tested tool. A verbal assurance to your son from your deathbed stating that he is going to get the house and not his stepmother (your wife) will not ultimately hold true if that is not stated in your will, or at the very least, on the deed to the property. Not a great result for him especially when he helped you finance the property during your lifetime!
Update Appointed Persons and Beneficiaries
Review your current selections for fiduciary roles such as trustee of any trusts or executor of your estate to be sure these individuals are still well suited for the work coming their way. This is probably a good time to replace 95-year-old grandpa Joe with one of your responsible children or even a professional trustee.
Concerning beneficiaries, qualified retirement accounts like IRAs are easily passed on at death as long as beneficiaries are on file with the institution. Having no beneficiary named at all or even naming a minor or disabled child can create unnecessary complications that could have been avoided. A trust is often the top choice when thinking about proper beneficiaries for accounts.
Fund Your Trust
If you were wise enough to establish a trust previously, now is the time to ensure it will work as intended. This means that the trust must own or be the beneficiary of all of your assets (i.e., funded into the trust). Your power of attorney (above) can help you identify any funding gaps on the balance sheet and work furiously to move those unfunded assets into the trust. This step will provide a smooth transition of accounts to those who are left behind without the need of court oversight and in some cases minimize or eliminate certain taxes. Not to mention the peace of mind it can afford you by knowing that your specific wishes will be carried out.
Specific Bequests
The above steps to take before a death are mostly handled by your estate planning attorney but do not neglect the other members of your team – your financial planner and accountant. Bring these professionals together to review strategies and to introduce them to other family members since they will be working together in the coming months to execute your plan. Just like Marvel’s Avengers, when this group is united and collaborating with each other, it significantly increases the chances of your plan’s success.
Plan now or plan later, but plan nonetheless. Unfortunately, there isn’t always the guarantee of a “later,” so we declare: Prepare and Plan Now!
If you are a client, please reach out to your attorney to make us aware of your situation. If you don’t already have a relationship with an estate planning attorney, schedule a complimentary meeting with a paralegal who can connect you with an attorney who’ll make this transition smoother.
