Year-end is the perfect time to review and evaluate the important things in your life, including your personal legal affairs. A few hours invested in your future financial and health-related security is worth the time and effort. Here are some indispensable components of every family’s legal security plan. Make sure you review them now so they aren’t forgotten during the holiday festivities and you can start the New Year worry free.
Review your estate plan. Many times having joint title on your accounts isn’t enough. Depending on your circumstances you may need a trust to avoid leaving your family the burden of probate. The living trust allows you to transfer the assets to the trust but you keep the control and are able to manage or revoke the trust. The trust allows you to choose a successor trustee and decide who will receive the assets at your death. Upon your death the court does not need to get involved and probate isn’t required. A trust can help you if you are ever disabled by accident or illness because the successor trustee can manage the trust property without a lengthy court proceeding.
Establish your “living will” or health-care directive. An “advance health-care directive” allows you to choose the most appropriate person to handle decisions about your healthcare (including life-sustaining treatments) in the case you become disabled. The Federal Health Insurance Portability and Accountability Act (HIPAA) created strict regulations concerning privacy and the release of personal medical information. Consequently, it is important that you include specific language in your directive that identifies your personal agent as your “personal representative” with the power to obtain your medical information for HIPAA purposes.
Determine how your property is titled.How you title your property will affect your overall estate plan. There are 4 basic forms of property ownership:
- Sole ownershipwill give you exclusive control over the property, but its disadvantages include lack of heavier tax burdens and probate when the owner dies. Most single owners use this title method because they are not aware of a better alternative.
- Joint tenants with rights of survivorshipwill automatically pass to the surviving owner at death and not through your will or trust. However, the surviving owner is not required to share the property with any other family members.
- Tenants in commonwill allow each owner to own a specific, unequal share. Your share of the property will pass under the terms of your will. Again, this will involve probate.
- Tenancy by the entireyis real property held by a Husband and Wife in which each owns the undivided whole of the property, coupled with the right of survivorship, so at the death of one, the survivor is entitled to the decedent’s share.