Last week, I shared the first part of a series on the importance of estate planning for those without children. If you haven’t read it yet, you can do so here. In part two, I’ll discuss additional risks involved for those who forego estate planning.
Someone will have power over your health care
Estate planning isn’t just about passing on your assets when you die. In fact, some of the most critical parts of planning have nothing to do with your money at all, but are aimed at protecting you while you’re still very much alive.
Advance planning allows you to name the person you want to make healthcare decisions for you if you’re incapacitated and unable to make decisions yourself.
For example, if you’re temporarily unconscious following a car accident and unable to give doctors permission to perform a potentially risky medical treatment, it’s not always clear who’ll be asked to make that decision for you.
In that event the courts will be called in to appoint someone to make those critical decisions. And that person may not be whom you would have chosen, and/or they may make decisions contrary to what you would want.
So even if you don’t have kids, you need to do estate planning in order to name health care decisions-makers for yourself and provide instructions on how you want decisions made.
Someone will get power over your finances
As with health-care decisions, if you become incapacitated and haven’t legally named someone to handle your finances while you’re unable to do so, the court will pick someone for you. The way to avoid this is by naming someone you trust to hold power of attorney for you in the event of your incapacity.
Durable power of attorney is an estate planning tool that gives the person you choose immediate authority to manage your financial matters if you’re incapacitated. This agent will have a broad range of powers to handle things like paying your bills and taxes, running your business, collecting your Social Security benefits, selling your home, as well as managing your banking and investment accounts.
Without a signed durable power of attorney, your family and friends will have to go to court to get access to your finances, which not only takes time, but it could lead to mismanagement and even the loss of your assets should the court grant this authority to the wrong person.
Furthermore, the person you name doesn’t have to be a lawyer or financial professional—it can be anybody you choose, including both family and friends. The most important aspect of your choice is selecting someone who’s imminently trustworthy, since they will have nearly complete control over your estate.
Given all of these potential risks, it would be foolhardy – whether you have children or not – to ignore or put off these basic estate-planning strategies. Identifying the right planning tools is easy to do, and begins with a Family Estate Planning Session, where we can consider everything you own and everyone you love, and guide you to make informed, educated, empowered choices for yourself and your loved ones.
Dedicated to empowering your family, building your wealth and defining your legacy,