Undoubtedly, this is a scary time in our lives, as we are in the midst of the global COVID-19 Coronavirus pandemic. Given the severity and magnitude of this health crisis, there are three essential estate-planning documents that you should have in place: a Durable Power of Attorney, a Health Care Directive, and a Last Will and Testament. These documents are important to have in place, not only during this time, but at all times, as you never know when a significant life event may occur.
First, a Durable Power of Attorney allows you to designate someone to serve as your Power of Attorney to assist you with financial matters, such as paying your bills, making investment decisions on your behalf, etc. Assuming that you are over 18 years of age, unless you have a Durable Power of Attorney, no one has the legal authority to handle your financial matters, not even a spouse or parent.
Second, a Health Care Directive (also sometimes referred to as a Living Will or an Advanced Directive) allows you to designate someone to serve as your medical representative to make medical decisions for you in the event you are unable to make them on your own. This document allows you to express your wishes as to the life-sustaining treatment that you do or do not wish to receive in the event that you are unable to communicate your medical wishes and are suffering from a terminal condition, or are in a permanent vegetative state. A Health Care Directive also allows you to express your wishes as to organ donation.
In the absence of a Durable Power of Attorney or a Health Care Directive, if you were to become incapacitated, a Legal Guardian to assist with your financial and medical needs would need to be appointed by a court. However, guardianship proceedings can be timely and expensive. There is also the possibility that you may not like the result, as the court may appoint a person to serve as your Legal Guardian whom you very well may not have chosen. By preparing a Durable Power of Attorney and a Health Care Directive, you choose your legal representative, not the court.
Finally, a Last Will and Testament is a key document to have in place. Death is an inevitable part of life, and it is important to have a Will so that you can ensure that your loved-ones are provided for and that your final wishes are honored. Among many things, a Will allows you to control disposition of your assets (i.e. who they go to and in what proportions), the manner in which the assets should be distributed (i.e. outright or in trust), and permits you to appoint a Guardian if you have minor children.
As part of the Will preparation process, you should also review your beneficiary designations for any life insurance policy, 401(k) plan, IRA, or any other asset that you own that has a beneficiary designation. New change of beneficiary forms may need to be completed to update your beneficiary designations (particularly if any primary or contingent beneficiary is now deceased) and to coordinate your beneficiary designations with the provisions of your Will.
At the end of the day, global pandemic or not, making sure your estate planning documents and beneficiary designations are in order is a vital way to provide yourself with peace-of-mind, ensure that your wishes will be honored, and to provide your loved-ones with much-needed clarity as to the decisions that you want made. For assistance with your estate planning needs, please call Jaime Golin Friedman, Esquire, at (856) 428-8334.