Before you commit to making an estate plan, you may need clarification about what it is and achieves. Although it is entirely understandable to assume this, some envision it as a single document that gets signed when you meet with your attorney. Additionally, people falsely believe that people pursue an estate plan because they only want to protect their assets.
Anyone who has begun estate planning understands this is not a genuine reflection of the process. An estate plan is a series of documents that an attorney pieces together to achieve your specific estate planning goals. Whereas an estate plan can protect your assets, it achieves more than that. Regardless of how much wealth you have accumulated or how basic you believe your estate to be, everyone has to deal with the possibility of incapacitation. Even if you lease your car and rent an apartment, an estate planning attorney can draft durable powers of attorney, advanced directives, and medical powers of attorney.
For example, suppose you suffer a severe injury and cannot speak on your behalf. In that case, doctors cannot divulge your medical history to your family because of the Health Insurance Portability and Accountability Act (HIPAA). (You can ask your attorney about including a HIPAA Authorization in your estate plan to overcome this hurdle.) All these exist to ensure your family has what they need to support you.
Avoiding Shiny Objects
To continue with the issues surrounding incapacity planning, there is also a concern that your family cannot access your bank accounts without your permission. If you are ever incapacitated, you still want someone to pay your mortgage and handle your bills to avoid long-term issues. Before we explain the shortcut some people take, we want to be upfront and state that this is not a valid reason not to meet with an estate planning attorney.
Think of someone who is single, owns a home, and has a modest savings account. Instead of creating a revocable trust and appointing a trustee to enable someone else to manage their finances even when incapacitated, they see a shortcut. They realize that married couples share bank accounts, so they know they can add someone else to the account. After completing the paperwork, which will likely be free, someone else can get those funds if you cannot. However, this person also just gave up ownership of their assets.
Although this person should have other key estate planning documents, a revocable trust, for instance, not only grants access but doesn’t relinquish ownership. Granted, the trust legally owns the assets, but because it is revocable, you can add or remove assets—or close the trust entirely. Never forget that you can be protected without giving up ownership of your assets.
Begin the Process with Luis E. Barreto & Associates
Luis E. Barreto & Associates will craft an estate based on your needs at this particular time in your life. Because your life will change, commit to forming a relationship with an estate planning attorney who will assist and guide you through developing and modifying a plan. For more information about how our office can protect you and your assets with an estate plan, contact us to schedule a consultation.
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