MDNews - Greater Boston

Many people do not think twice about visiting their primary care physician for an annual checkup. However, many people neglect to visit their advisor to perform an annual checkup on their financial plan. A financial plan provides a road map for a client to make his or her financial goals a reality. One of the key areas that should be addressed within a financial plan is estate planning. Estate planning is one of the most important steps any person can take to make sure property is managed and distributed appropriately, healthcare wishes are honored, and loved ones are provided for. The following is a brief overview of the basic estate planning documents you should have regardless of your age, health or wealth. DURABLE POWER OF ATTORNEY FOR FINANCIAL MATTERS A durable power of attorney for financial matters allows you to appoint a spouse, trusted friend or family member to make financial and legal decisions on your behalf. The individual granted this power is known as your attorney-in-fact. It is important to name a primary attorney-in-fact and at least one alternate. The alternate attorney-in-fact will assume the role if the primary attorney-in-fact is not able to serve. If a durable power of attorney for financial matters is not in place or is outdated, individuals would not be able to access financial assets or make legal decisions on your behalf should you become incapacitated. If this occurs, an individual would need to petition the probate court to handle financial and legal matters on your behalf. ADVANCE MEDICAL DIRECTIVE Advance medical directives contain two sections. The first section is referred to as the power of attorney for hea lth care. This document allows you to appoint a spouse, trusted friend or family member to make medical decisions on your beha lf when you are no longer able to do so. The individua l granted this power is called your health care agent. Similar to the durable power of attorney for financia l matters, it is important to name a primary hea lth care agent and at least one a lternate. The second section is known as the declaration, or living will. This section a llows you to communicate your wishes regarding medically administered nutrition, hydration and life-sustaining treatment. LAST WILL AND TESTAMENT A last will and testament, or will, is of ten said to be the cornerstone of an estate plan. The main purpose of a will is to disburse property to heirs after your passing. If you haven't executed a will, your probate property will be disbursed according to state law, which might not be what you want. There are two other equally important aspects of a will. You can nominate an executor, which is the person or financial institution that will be responsible for administering your estate according to your wishes. If you do not nominate an executor, the probate court will appoint someone to serve in this role. Under your will, you can also nominate a legal guardian to care for minor children or dependents with special needs. If you do not nominate a guardian, the probate court will do so and the person appointed may not have been your first choice. REVOCABLE LIVING TRUST A revocable living trust is a separate legal entity you create to own property, such as your home or investments. The trust is ca lled a living trust because it's meant to function while you're alive. You control the property in the trust and, whenever you wish, you can change the trust terms, transfer property in and out of the trust, or end the trust a ltogether. Not ever yone needs a revocable living trust, but it can be used to accomplish va rious purposes. The prima r y function is t y pica lly to avoid probate. This is possible because property owned by a revocable living trust is not included in the probate estate. Family members are often grateful when revocable living trusts have been used for this purpose. Unfortunately, the probate process can be time-consuming and expensive. It is a lso public, meaning anyone can access the estate file and see what you owned, how much you were worth and who is getting what. Revocable living trusts a re a lso va luable documents when minor children are involved. The revocable living trust can be designed to hold and administer assets and investments for the benefit of minor children when you are no longer able to do so. IN CONCLUSION This article addresses the estate planning documents you should have in place. Depending on your personal financial goals and wealth transfer wishes, additional techniques may be appropriate. At Baystate MD, we can work in conjunction with your estate planning attorney to make sure your estate plan is seamlessly integrated with your financia l plan. Jennifer N. Shea, JD, MBA, is Agency Director – Financial Planning and Advanced Markets, Baystate MD. O'ces can be found throughout New England. Visit baystatefinancial.com for more information. ■ Estate Planning 101 BY JENNIFER N. SHEA, JD, MBA M D N E W S .C O M /// M D N E W S N O R T H O F B O S T O N ■ 2 017 0 9 F I N A N C E ❰❰❰❰❰ 0 9

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