Peace of Mind in a Crisis: Essential Steps for Taking Care of Yourself and Your Family


Amid the uncertainties of the coronavirus crisis, an easy step you can take to provide yourself with a degree of peace of mind around your financial affairs is to ensure you have these six essential estate planning documents in place and up to date. It is also important to let the right people know where to find them.

1. Power of Attorney Designations

Naming your spouse, adult child or other trusted individual as your agent under a durable power of attorney (“durable” means it is still effective even if you lose capacity) allows that person to take care of general financial matters for you if you are unable to do so yourself. This might include paying bills, filing tax returns, signing legal documents or applying for benefits. Power of attorney appointments become essential when we need others to act for us, for whatever reason. It can also be important for young adults whose parents can no longer make decisions for them as they could when they were minors.

2. Health Care Proxy Assignments

Naming a health care proxy (another name for your agent under a durable power of attorney for health care) allows someone to make health care decisions for you if you are not able to make them for yourself. In addition to talking with your doctors and other health care professionals, your health care proxy may be the only person who is authorized to obtain information about your medical condition—information that privacy laws might otherwise prevent a doctor from sharing with your family members.  

3. Revocable or Living Trust

The foundation of most estate plans is a revocable or “living” trust, which can protect your heirs from the hassle and expense of a probate court proceeding to settle your estate when you die and streamline the process of managing the trust assets if you become incapacitated. You are the beneficiary and trustee of the revocable trust during your lifetime, and you name a successor trustee to take control of the trust’s assets upon your death or if you lose capacity. Typically, you transfer title to your assets to the trust during your lifetime and the trust provides for the distribution of your property after you die.

4. Will

Although revocable trusts have taken over many of the responsibilities formerly assumed by a will, it is still the legal document in which people typically name guardians for their minor children and exercise any powers they have to distribute property held in an irrevocable trust. Individuals who have a revocable trust usually create a “pour-over” will, which directs any assets that were not transferred into the trust during their lifetime to be transferred to the trust upon their death.

In your will, you also name an executor who is in charge of administering any assets held in your individual name and is typically the same person or organization as the successor trustee of your revocable trust. At Fiduciary Trust, we regularly serve as both executor and trustee, as well as agent for individuals named in those capacities.

5. Title Documents

If you create a revocable trust, it is essential that your assets (other than those that pass according to a beneficiary designation, such as retirement accounts and life insurance) be titled in the name of your revocable trust (e.g., Jane Smith as trustee of the Smith Family Trust). Assets held in your individual name (e.g., Jane Smith) will pass according to your will, and a court proceeding may be required before the assets can be transferred to your revocable trust and distributed according to the trust terms.

6. Beneficiary Designations

The disposition of your retirement accounts and proceeds of life insurance policies are not controlled by the terms of your revocable trust or will. Instead, they are controlled by your beneficiary designations for each account or policy. With retirement accounts and insurance policies, you are generally required to name beneficiaries as part of the initial paperwork. But it is important to remember you generally can change those beneficiary designations at any time and should always make sure your designations are up to date and aligned with the other terms of your estate plan.

Written By Christine Brown
Trust Counsel

This communication is intended solely to provide general information. The information and opinions stated may change without notice. The information and opinions do not represent a complete analysis of every material fact. Statements of fact have been obtained from sources deemed reliable, but no representation is made as to their completeness or accuracy. The opinions expressed are not intended as individual investment, tax or estate planning advice or as a recommendation of any particular security, strategy or investment product. Please consult your personal advisor to determine whether this information may be appropriate for you. This information is provided solely for insight into our general management philosophy and process. Historical performance does not guarantee future results and results may differ over future time periods.

IRS Circular 230 Notice: Pursuant to relevant U.S. Treasury regulations, we inform you that any tax advice contained in this communication is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. You should seek advice based on your particular circumstances from your tax advisor.

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