If you’ve done any estate planning, or even if you’re just familiar with it, you probably know the basics — that is, a comprehensive estate plan can help you pass on assets to your family while also achieving other goals, such as designating someone to take care of your affairs if you become unable to do so. But you may not know about some other estate-planning issues that could prove important in your life:
• Power of attorney for students – Children heading off to college may be considered legal adults in many states. Consequently, you, as a parent, may not have any control over medical treatment if your child faces a sudden, serious illness or is involved in an accident. Instead, a doctor who doesn’t know your child or your family may decide on a course of action of which you might not approve. To help prevent this, you may want to have your college student sign a medical power of attorney form, which will allow you to make decisions on your child’s behalf if doctors don’t think your child can make those choices. You might also want to combine the medical power of attorney with an advance health care directive or living will, which lets you specify actions you do or don’t want to happen. In any case, consult with your legal advisor before taking any of these steps.
• Community property versus common law – Not all states treat married couples’ possessions equally. If you live in a community property state, the property you acquire during your marriage is generally considered to be owned in equal halves by each spouse, with some exceptions. But if you live in a common law state, the property you obtain while you’re married is not automatically owned by both spouses. In these states, if you buy some property, you own it, unless you decide to put it in the name of yourself and your spouse.
This doesn’t necessarily mean, however, that your spouse has no rights, because common law states typically have rules that guard surviving spouses from being disinherited. But here’s the key point: If you move from a community property state to a common law state, or vice versa, you might not want to assume that your and your spouse’s property ownership situations will remain the same. Consequently, if you do move, you may want to consult an estate-planning attorney in your new state to determine where you stand.
• Pet trusts – You always strive to take good care of your pets. But what might happen to them if you become incapacitated in some way? Unless you have a close family member or friend who’s willing to take over care for your pet, you might want to consider setting up a pet trust, which can take effect either during your lifetime or after you pass away. A trustee typically will make payments to the caregiver you’ve designated for your pet, with payments continuing for the pet’s lifetime or a set number of years. Again, an estate-planning attorney can help you with this arrangement.
Estate planning certainly involves the big-picture issue of leaving a legacy to the next generation. But the issues we’ve discussed can also be meaningful to you, so you’ll want to address them properly.
