Your Will and Powers of Attorney for Financial and Health Care

Do you have kids, or nieces and nephews?  Do you have a favorite charity?  Do you own a house, an automobile or a retirement account?  Do you own a television set, a favorite pair of skis, or a family heirloom?  Do you have a checking or savings account? 

Yippppeeee….if you answered ‘yes’ (even sort of) to any one of these questions — you need a Will!  Yes, it’s time to create a Will for yourself and others — no matter what age, income status or sex you are!

Why do I need a Will you ask?  ‘I’m not planning to die soon’ — could pop into your head.  In any event, you’ll need a Will, and eighty percent of American’s and Canadians don’t have one. 

It’s an easy thing to put off doing.  And it is important to move it up on your ‘To Do List’ and check it off.  And once you’ve done it, to put it in a safe place.

Will and Powers of Attorney for Financial and Health Care

Photo credit to AARP

A Will protects your assets, your wealth.  It’s basic to getting your financial life in order.  Without it, you are leaving your wishes unheard, and more challenges for others around your assets. 

A Will will specify three things in particular:  (1) where money and assets you own go; (2) a guardian for any kids under the ages of 18; and (3) an ‘Executor’, a person who is responsible for settling and distributing your stuff.  A fancier form of a Will is called a Living Trust.  You graduate from needing a Living Trust when you acquire more money and assets. 

If you go on from this life, you die, and you don’t have a Will, you die in what is called ‘Intestate’ and the courts decide where your money and assets go.  This, obviously, is not an ideal plan.

It is amazing how many people, and famous people, have not handled this properly.  When Leona Helmsley, of the famous hotel family, died, she left $12million to her dog, and then the dog died.  Kids who she did not want to get the money, then got her money.  When Robert Cardasion, of the famous scandalous family, died his diary went to the new wife (not his original wife who would have protected it according to his wishes), and the new wife sold it for mega dollars to the tabloids for scandalous stories.

You get to decide if you do a Will.  Sports teams have been lost, new wives have been left destitute, same-sex partners who thought money was coming to them didn’t get it, and much more when documents to protect the transfer of money and assets have not been done at all or not fully.  The important thing is that a Will is about stating your wishes, in your real life, as you chose!  And you need a Will whether you are single or married.

You also can’t assume that your wishes will be carried out for your children if you don’t have a Will.  In the Will, you specify who will care for your children, and this could be different than a court would direct.  For you, maybe it’s not this aunt or this uncle, maybe it’s a best friend.  That’s up to you with a Will.

You also name an ‘Executor’ in your Will.  This is a person who will pay your bills, do your tax return and settle your assets.  This could be your spouse, or not, it could be a friend and it could be a trusted professional.  If you have children, it could be one or both of your children.  It should be someone with financial skills, and it’s a good idea to name backup Executors.

I have known people who chose someone to be the Executor, and that person didn’t act competently.  This has an impact on the other beneficiaries of your money and assets, the people you are leaving your stuff too.  So, it’s wise to think carefully about who you chose for this task and name in your Will.

In other words, when you are picking a Guardian for your children and an Executor for your Will, it’s better to avoid being ‘politically correct’ (choosing someone because you think you ought to), and pick the ‘right’ person who aligns with your wishes.

In a Will, you can give money and other things to people who you chose.  Sometimes, someone has two kids, one that’s become rich in life and one that is struggling with being poor in life.  And, the dilemma is —which one should I leave money too?  Maybe the rich one could manage money better and hold on to it, or maybe the poor one needs it more. 

Money is just energy.  And when it comes from a Will, it’s love energy.  It’s often better to split it equally between kids because then they all think that you love them equally.  It’s about a gift of love, recognition, and remembrance of them.  You can’t take your money and your things with you, and when you’re gone their importance to you vanishes, so your legacy is about the way that you touch people on earth and their feelings about how you felt about them.  It can be magical and it can be very painful in this wealth transferring process.

And, for you, maybe animal rescue, children’s education, clean water for the whole world, the schools you went to, or the arts are your personal passions, and you want your legacy to be to help those causes.  Many single people have the bulk of assets to send in this fashion because they are not leaving money to a spouse or kids.

There are two common mistakes that people make around their Will and the understanding of its ultimate outcomes.  If you have a retirement account, either with your employer or an IRA or your own company plan, then heads up!  If your Will specifies that you are leaving this money to your wife, but the paperwork that you filled out and signed for the creation of this account says that your beneficiary is your Mother (because you set it up that way a long time ago and forgot to change it when you got married); and your Will kicks into action, your Mother will get the money.

In other words, whatever you specified as part of the set up of your retirement account rules, and even though you made another form of direction in your Will, your Will will not govern.  So, be sure to correct any retirement account information about your beneficiaries to be the same as what you’ve set in your Will.

The same is true for life insurance.  You want to make sure that the beneficiary on your insurance policy is also the same one that you specify in your Will.

Women Discussion on Will and Powers of Attorney for Financial and Health Care

Photo credit to AARP

As a note here, if you are the beneficiary — let’s say that you inherit money, you most likely will inherit it tax-free.  In other words, you can take the money and run.  However, if you have $200,000 that you leave to two children with $100,000 in cash and $100,000 in a retirement account.  And one child gets the cash, and the other child gets the retirement account; one child is likely to be unhappy.  That’s because the one that got the retirement account will have to pay ordinary income tax on the money taken from the retirement account when it is withdrawn.  Therefore, that child will get much less money after-tax than the one that just got the cash. 

So, if you inherit money that’s in a retirement account, you too will be responsible for paying tax on this money when you withdraw it from the rollover retirement account.

A Will can also provide you an opportunity to name a Custodian of Assets, and you would want to do this if you were leaving money to a child under age 18.  This is because this person would be in charge of the funds while your child is underage or till you determine them to have the money.

Now:  Let’s talk about two other related documents to get your life in order. 

The first is called a Durable Power of Attorney for Finances. 

Like a Custodian of Assets, this is a written form of designating someone to take over your money, assets, bills, tax returns (it could be these or more) if you are not capable of doing these for yourself.  This would come into play if you were still on this earth but not in good sound mind.  Then this person has the ability to carry on for you with all of life’s financial considerations.

The person you name is given your power of attorney to act on your behalf, and you specify where they can act on your behalf.  They might collect rents, be able to sign your checks, have access to your financial records, it’s up to you in this document.

And, here’s the catch.  In order for this person to step in on your behalf, it takes a doctor to say that you are in a state of being ‘legally not competent’.  The person can’t just decide one day that they’re going to take over your affairs.  It does require approval and a medical opinion that your state of mind is not functioning for you to handle these tasks.

The second is called a Durable Power of Attorney for Health Care.

This is a written means for you to pick up to three people who can talk to your doctor and make medical directives.  You can decide that with zero quality of life that you want them to pull the plug, for instance.  You get to decide ‘do not use all of my money to keep me alive when I’m not able to participate in life’. 

The people that you chose need to be of a strong mind to take over for you in these circumstances and act out your wishes and not their own which can be different.  With this document, you can refuse excess healthcare treatment and extraordinary survival attempts.  You chose. 

The Will, the Durable Power of Attorney for Finances and the Durable Power of Attorney for Health Care — are your resources for directing your money, assets and yourself into the future.  You get to decide what your legacy will be.  How will you want to touch this world when your feet are no longer on this planet?

With all three of these documents, there are three things to remember. 

The first is, make four copies, and give one to each of your Executors, and keep a copy and the original in a safe place with you.  It’s important that people know that you have a Will and who has it.

The second is, that the latest version of any of these documents is the one that prevails.  So, if you update your Will and date it accordingly, it will invalidate all other Wills that you prepared that are dated before the most recent version.

The third is, it takes two witnesses to your signature on the documents to put the document in good order.  You do not have to have the documents notarized, although as a matter of practice it is a good idea. 

You can go to an attorney to have these documents prepared, or you can find them online by going to a website that offers legal forms.  And then, you can have it reviewed by an estate attorney to see that it’s compatible with the law in your state.  These documents do have to be in written form, and video won’t hold up for your wishes.

Now, you’ve got it!  Time to get all of these in place for yourself!  The best plan is to make your own choices and put them in writing so you create your legacy!  The time to get all of this in place is NOW!

And here’s one more thing — and additional document — that I love and you will too!  This can be fun and so appreciated by those who you leave behind.  It’s called an Ethical Will.  This could be your greatest gift, and more important to others than even your money!

An Ethical Will is a ‘Love Note’.  It can be to your kids, to your spouse, to other family members, to friends.  It’s not a legal document and a really great thing to do. It can be your favorite moments with them, your values, what you want them to know about what you learned about life, what goals you accomplished, what future that you wish for your loved ones and any message that you hold in your heart to tell them. 

Ethical Wills is your way to share your treasured thoughts, blessings, life’s lessons and hopes and dreams with loved ones.  This is maybe the most valuable asset you leave.  This may be one of the most cherished and meaningful gifts you can create for your family and community.  It’s heart to heart.  I hope you’ll do this too and attach it to your Will!

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