Many physicians are taking inventory of their life and finances and setting goals with the intention of making this year better than the last. One particular area that many should consider reflecting upon is estate planning. This is the process of deciding for yourself, ahead of time, what you want to happen in the event of an untimely death, disability or health emergency.
Regardless of financial planning status, completing an estate plan should be near the top of the list. In the absence of clearly-stated wishes, assets will be dispersed according to the laws of the state of residence — these may not always line up with one’s most earnest intentions. It is important to create a meaningful legacy rather than inadvertently naming the IRS or creditors as your primary beneficiary because of a lack of planning.
While the nuances of estate planning are beyond the scope of a single article, an estate plan should contain, at minimum, these three integral documents: a will, power of attorney and healthcare directives.
A will can outlines where property is to go and, most importantly, nominate guardians of minor children in the event of death. However, simple wills cannot outline how, when or for what purposes money should be given to beneficiaries — the distributions will be outright. A will must go through the probate process before distributions can be made.
Powers of Attorney
A durable power of attorney allows a spouse or trusted individual to sign your name for you in the event that you are not able to under your own power. This empowers them to handle finances such as taxes, bills, bank accounts and real estate sales while the grantor of the power is incapacitated. In many states, powers of attorney can be “springing” i.e. take effect only in the event of an incapacitation or they can be effective immediately. Some institutions may ask clients to sign internal power of attorney forms for fear of liability
Advanced directive and Healthcare Powers of Attorney documents outline how healthcare decisions should be addressed in the event of incapacity. A part of the health care directives is the HIPPA authorization, allowing the release of protected health information to those serving as healthcare powers of attorney. Advanced directives or living wills also provide direction regarding end-of-life decisions so loved ones serving as healthcare power of attorney are aware of wishes and are not left to make this difficult choice alone.
It is highly recommended that you consult with an experienced estate planning attorney with knowledge of your family’s individual circumstances when establishing an estate plan. Make an effort to be prepared and decisive when meeting with an estate planning attorney. Before your first meeting, ask your attorney what documents and information you need to bring to your meeting. The less time your attorney needs to spend gathering information, the less money you’ll ultimately end up spending.
This article has been provided for informational purposes only and is not intended to be, nor should it be considered legal advice. Consult an appropriate legal professional regarding current laws and application to your particular situation. You should not make any decisions about any legal matter without first consulting with an attorney. This article is not intended to create, and receipt does not constitute an attorney-client relationship.