Haims: Family hardships ensue from lack of estate planning
While I have shared this information before, there remain many people both young and old who are unaware of the consequences of not addressing Estate Planning.
Over the past couple of months, I have been made aware of two families who had been managing the fallout from their parent’s estates not being properly managed. Just this past Friday, I was informed of a third occurrence — the difference in this circumstance is that the family affected is someone I know personally and the surviving spouse is only 56 years old.
Earlier this summer, the husband suddenly passed away. The wife, a friend of mine for many years, had to leave her job in order to jump in and take over her husband’s business. Although she had shared with me some of the challenges she has faced attempting to run his business, being a single parent, managing her grief and that of her two children, she recently found out that some of the business’s creditors could ask for her to reapply for credit in her own name.
It seems that her husband started the business when they were engaged and while he had her added as a signer on a number of business accounts, he had never had her name placed on business documents such as loans and operation documents. Now, she is inundated with paperwork of all kinds and finding out that should she have to apply for business credit in her name, loan rates may likely be substantially higher.
Oh, I forgot to mention another challenge she is still attempting to overcome — online passwords. Yep, there was a SBA loan, bank loan, and business operation expenses like utilities that were paid online. Without access to passwords, she has found many formidable and time-consuming challenges lay ahead.
The aforementioned are only a few of the daunting challenges someone may face when an unexpected passing occurs. Young or old, single or married, or widowed, once personal assets have been acquired, save your surviving loved ones from the possible heartache and trauma of managing your affairs after you pass.
Be proactive — Being reactive can be costly and overwhelming
Rich or poor, or somewhere in between, we all have ideas of what we’d like to see our future look like. More than likely, most people may not want to envision a time spent in court, arguing with sibling and other family members, or fighting with financial institutions and health providers to uphold end-of-life wishes and the management of personal assets.
Unfortunately, for people who have not taken the time to get educated about planning for end-of-life legal, financial, and medical matters, heartache, turmoil, along with family and sibling quarrelling may be inevitable.
Estate planning DOES NOT only apply to wealthy individuals. If you, your spouse, or your aging loved one’s, own property or other assets like stocks and bonds, it is important that you educate yourself about the importance of documents such as a will, advance directives, powers of attorney (both financial and health matters), and various types of trusts.
Avoid the potential of formidable challenges by taking the time to understand how these documents may affect you and your aging loved ones.
Regrettably, there are few educational courses that teach people how to prepare for medical or financial emergencies in addition to the intricacies of the distribution of an estate. Depending upon the research source, most Americans do not have a will that defines how they would want their assets managed after their death. A recent Gallup polling found that slightly less than half of U.S. adults, have such a document in place. Earlier this year, LegalZoom posted an article stating, “By most estimates, anywhere from 50–60% of Americans don’t have a will.”
When it comes managing your, or your loved one’s healthcare and financial wishes upon death, laws are quite specific about who can participate in healthcare and financial related conversations and decisions. It’s important to understand that laws frequently vary from state to state. So, if you have recently moved to Colorado, it may be a good idea to have a Colorado attorney look over your documents.
The following are some of the documents one may need to have when developing an estate plan:
- General, Limited, and Durable Power(s) of Attorney.
- Business related documents
- Springing Power of Attorney
- Disability Trusts (children of passing parents)
- Irrevocable/ Revocable Living Trusts
- Living Will
- Advance care directive
- HIPAA consent form
Proper and timely estate planning can really help during a time of family crisis. Preplanning will greatly assist family members and loved ones to know what medical and financial efforts you or your family member(s) would want. Further, having the proper documents in order will provide you and your family member(s) the legal means to carry out the wishes of the departed family member.
At the end of the day, having legal documents in one place will not solve all problems or assist in the process of grieving the loss of a loved one. The best approach to developing a well-conceived “plan” will start with a conversation that occurs well before an unexpected issue arises. Speak with your partner, family, and sibling(s), about what your wishes are.
Without proper legal documents, at best, assets may go to probate and tax implications may eat away at your wealth/inheritance. At worst, family and loved ones may see the worst in each other.
Judson Haims is the owner of Visiting Angels Home Care in Eagle County. He is an advocate for our elderly and available to answer questions. His contact information is VisitingAngels.com/comtns and 970-328-5526.