By Tim Barkley. October 2016.
Last month’s offering to our readers considered the effect of the Inheritance Tax on folks without spouse, siblings or children as estate beneficiaries. This month’s article offers practical steps to ease the task of your surviving nieces, nephews, friends or other loved ones as they try to sort out your affairs.
First, and most basically, be sure your estate planning documents are up-to-date, and that someone knows where to find them. An out-of-date will that leaves assets you no longer own to persons who are no longer living can be an invitation to expensive and time-consuming litigation. Changes in terminology, technology and social norms can make a decades-old medical directive worse than useless.
This writer often has the painful duty of explaining to surviving loved ones that if they can’t find your will or power of attorney, effectively you don’t have one. While the law does provide for a procedure to probate a copy of your will (if they can find that), it is fraught with costs and difficulties that can easily be avoided. The law also allows for the appointment of a guardian if your family can’t find your powers of attorney, but again, that process is lengthy and expensive. Make sure they can find originals when the time comes.
Second, make a list of your assets and their custodians, and your professional advisors – lawyers (of course!), accountants, brokers, benefits department, insurance (life, health and property/casualty, and liability if you are in business), bankers, etc. Include company name, contact name and phone number, account number and any other necessary identifying information. Make sure your filing system is up-to-date.
Include on that list the location and access controls for important documents, valuables and legal instruments. Calling all the banks in a 20-mile radius of everywhere you lived in the past 20 years to find a safe deposit box is a frustration for your agent or personal representative that you can easily avoid. Remember that anything you put in a secret place will be difficult for your agent or personal representative to find, too, unless you tell him or her where to look for things like combinations to safes, safety deposit box keys and the like.
The person you have chosen to care for you and your affairs – your fiduciary – should be able to find ready information about your assets, your obligations and your intentions. Don’t make him or her rummage through the house and wait for the mail to find out what he or she is supposed to do. Keep the list up-to-date, periodically reviewing it.
Third, make sure your fiduciary can get into your house without having to break in. The last thing anyone needs is for your neighbors to call the police on your nephew when he is trying to help you.
Fourth, be sure your asset custodians and professional advisors know who they will be hearing from if something happens to you. Your power of attorney should be filed with your banker, broker, benefits department, insurance agent and others who have custody of your assets. They probably have their own form, and if they do, they will want you to sign their document. Use it, but first review it to be sure it does not conflict with (or affirmatively revoke) your other powers of attorney.
Your medical directive should be filed with your doctor. Usually they will scan it and give it back. If they want to keep the original, consult with your planning professional to arrange to execute another “original.” If you are concerned about end-of-life issues, consider the MOLST (Maryland Medical Order for Life-Sustaining Treatment, marylandmolst.org) to detail your intentions regarding your care at that time. Prepare it with your medical care professional to include it in your medical chart, or prepare it on your own and keep it with your papers to demonstrate your intentions to your medical agent providing for your care.
Fifth, if your fiduciary is not local, travels frequently or works long hours, be sure a friend or neighbor knows who to call in the event of an emergency or other situation where you might need help. If your newspapers are piling up on the driveway and you don’t answer your phone, your niece in Tampa might not notice for weeks, but your neighbor will notice immediately.
Finally, be sure you review your plans regularly with your accountant, financial advisor and attorney. As conditions change, be sure your planning changes to meet new challenges and opportunities. The recent economic uncertainty has undercut the assumptions of many and forced a re-evaluation of the means to reach goals and the time necessary to accomplish those means. Families change, and your needs change. Be sure your preparations are dynamic and realistic.
Attorney Tim Barkley
The Tim Barkley Law Offices
One Park Avenue
P.O. Box 1136
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