Wealth & Estate Planning / 07.18.2019

Traveling This Summer? Make Sure Your Estate Plan Is in Order First

By Kevin Lenhard

Wealth & Estate PlanningVacation season is upon us, and in addition to picking out the ideal summer getaway for you and your family, booking flights and hotel rooms and buying that new swimsuit, it’s a good time to make sure your estate plan is in order before you hit the road. As you know, summer travel, whether at home or abroad, can come with risks you unfortunately can’t control – stormy seas, faulty aircraft and distracted drivers, to name a few. You can, however, attain some peace of mind for you and your family in the event of an untimely death or incapacitation by ensuring your affairs are in order and your estate plan is on track. Here are some pre-departure tips to help you get organized:

  1. Create/Update Estate Plan. First, if you don’t already have an estate plan, it’s time to see your attorney and get it done! If you do have an existing estate plan, you should sit down and review it to make sure it’s up to date and reflects your current goals regarding how your assets should be distributed and managed for the benefit of your family. This should be done four to six weeks before your travel departure date to allow enough time to implement any changes. The plan can be updated for any recent changes in the tax laws or changes in your personal circumstances, such as marriage, divorce or the birth of children. Discuss your estate plan with your spouse and children (as appropriate) to make sure they understand your wishes and are provided with appropriate contact information for your attorney, insurance agent, financial advisor, etc.
  2. Update Beneficiary Designations. Assets such as life insurance policies and retirement accounts do not normally transfer by will or a trust, but rather by a beneficiary designation form. Make sure the proper person is designated as the primary beneficiary. Additionally, it’s a good idea to name an alternate beneficiary, such as a trust, in the event the beneficiaries are minors. Incorporate changes to the beneficiary designations for major life events, such as marriage, a name change or deaths of beneficiaries.
  3. Powers of Attorney. Unforeseen illnesses or injury can leave you incapacitated and unable to make critical decisions about your own well-being. There are two important documents to address this situation. First, you should have a Health Care Power of Attorney (HCPOA) in place. A HCPOA gives the person you select the authority to make health care decisions for you in the event you are unable to do so due to injury or incapacity. Along this line, you may also want to complete a HIPAA authorization form to allow a trusted person to access your medical records in the event your medical chart is needed to make future health care decisions. Second, a Financial Power of Attorney gives authority to the person you grant as power of attorney to handle your financial affairs (e.g., banking, check writing, filing taxes and property management) in the event you are incapacitated.
  4. Name Guardians for Minor Children. If you have minor children, the highest planning priority is to legally designate guardians to care for your young children and manage your assets on their behalf in the event of your death or incapacity. You should designate people you trust to care for and potentially raise your young children to adulthood. It’s also a good idea to identify an alternate guardian for your minor children in the event the initial guardian dies, becomes ill or otherwise is unable to fulfill the role of guardian.
  5. Confirm Insurance Coverage. Review your life insurance policies and disability policies to make sure all the premiums are up to date and the amount of the death or disability benefit is at the correct level. We often acquire these policies when we are young, unmarried or have no children. You may need to increase the level of coverage if your family situation changed over the years through marriage or the birth of children.
  6. Organize Digital Assets. In the age of technology, many of our assets are digital assets, as opposed to physical assets such as cars, boats and baseball card collections. Digital assets include email accounts, music libraries, frequent flyer accounts, social media, websites and cloud storage. If these assets are not summarized and inventoried, they could be inaccessible or lost in the ether. Many attorneys suggest writing down a list of the digital asset accounts along with the password and ensuring someone you trust knows what to do with these assets in the event of your death or incapacity.
  7. Title Designations. If a living trust is part of your estate plan, make sure the assets you intend to be included in the living trust are properly titled in the name of the trust. Your attorney can assist with this process.
  8. Other Advance Directives. Additional advance directives you should consider completing before you travel are a Living Will and an Organ Donation Form. A Living Will is an advance directive regarding your preferences for medical care if you are terminally ill and unable to make decisions for yourself. By planning ahead with a Living Will, you can get the medical care you want, avoid unnecessary suffering and relieve family members of decision-making burdens during moments of crisis. A Living Will reduces confusion or disagreement about the choices you would want family members to make on your behalf. Advance directives aren’t just for the elderly. Unexpected end-of-life situations can happen at any age, so it’s important for all adults to prepare these documents. If you are inclined to donate your organs upon your death, you can register to become an Organ Donor as well.

Lastly, take the time to organize your documents and contact lists in advance of your travel, and put them in a spot where they are easily accessible in the event they need to be located quickly. These are just a few estate planning tips to consider before you hit the road for your summer vacation. If you have any questions or would like to discuss further, please reach out to me at kjl@kjk.com or 216.736.7226, or contact any of our Wealth & Estate Planning professionals. Safe travels!

 

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