The coronavirus pandemic has disrupted just about every area of our lives, and it has caused many people to rethink their priorities. A lot of people have contracted the virus or know someone who has become seriously ill or died from it, and this has forced a good number of individuals to confront their own mortality.
COVID-19 has reminded us that, no matter how old we are, no one is guaranteed another day on this planet. With this in mind, it is important to get our final affairs in order regardless of our age. Otherwise, it may be too late to protect our family in the event of a worst-case scenario.
Important Estate Planning Tools to Protect your Loved Ones
Everyone should have an estate plan. Period. Even if you think you have “no assets” or a “small estate”, there are several documents that are essential to ensuring that your affairs will be in order:
Last Will and Testament
Also known simply as a “will”, a Last Will and Testament is a foundational estate planning document that everyone needs. In the absence of will, your surviving family members could face a long and drawn out probate process that could take several months or longer to complete. Not having a will could also cause bitter legal disputes within families that may drag on for years, causing irreparable damage to valued family relationships.
With a will, all of your final wishes can be spelled out clearly, including who will receive your hard-earned assets and property, as well as who will become guardian over any minor children you may have. Without a will, your property is divided based on Alabama intestate laws, and the courts would be the ones to decide who receives custody of your children. Within your will, you will also have the opportunity to appoint an executor/personal representative, someone you can fully trust to carry out your directions. This helps ensure that your final affairs are predetermined, and that the probate process will go as smoothly as possible.
Advance Health Care Directive
If you were to become terminally ill or injured and were unresponsive or if you were to become permanently unconscious, it is very important to have an advance health care directive (aka “living will”) in place to inform your loved ones and treating medical professionals of which end-of-life treatments you want to have and which ones to forgo. This saves your family members from having to guess what you would want, which could again cause heated disputes as they try to make the correct decision and guess your wishes.
Durable Healthcare Power of Attorney
Along with an advance health care directive, you will want to appoint a healthcare power of attorney to help ensure that your medical treatment wishes are carried out. This should be a trusted family member or close friend who fully understands what your position is on various health procedures and treatments, as well as someone you can count on to follow your wishes regarding your health care.
Durable Financial Power of Attorney
You will also need choose someone to manage your finances for you. Your financial power of attorney designee could be the same person as your healthcare power of attorney, or it could be someone else. The important thing is to appoint someone who you fully trust, and who is capable of making financial decisions and transactions on your behalf.
For those with more complex estate planning needs, there are various types of trusts that could be set up to help address them. One of the most common is a revocable living trust, which creates a separate entity where your assets can be held. These assets would be distributed directly to your designated beneficiaries upon your death, thus bypassing the need for probate. This makes the transfer of wealth a smoother process; and by avoiding probate, the details of your estate do not become part of the public court record.
These are some of the fundamental estate planning tools that most people should consider. There are several advanced tools and strategies, such as specialized trusts, life and long-term care insurance, business succession planning, and gifting strategies that can be combined or used separately to accomplish various estate planning goals.
Each person has a unique set of circumstances, so the right estate planning strategy will always depend on your specific needs. The best place to start is to speak with a skilled and knowledgeable attorney to discuss your situation.
Speak with an Experienced Alabama Estate Planning Attorney
Estate planning is not only for those who are aging and/or those who have significant assets, and COVID-19 has prompted many more of us to focus on the necessity to get our final affairs in order. If you are in Alabama, Davis & Fields is here to help.
Like everyone else, we are taking all the precautions and following all of the social distancing guidelines, and we are able to consult with you remotely via phone or video conference. But rest assured, we are fully operational, and we have the technology and resources to continue providing the strong legal guidance our clients have come to expect during our two decades plus in practice.
Message us online or call our Daphne, AL office today for a personalized consultation with a member of our legal team. We look forward to serving you!