Does your estate plan (or lack thereof) come to mind every time you board a plane or embark on a long drive? That’s because when we travel, many of us are reminded of our own mortality and the remote but real possibility that we might not return due to death or illness.
Before any trip, most of us create a “to-do list” of things we have put off and want to take care of before we leave. Here, then, is a checklist of estate planning things to do before your next trip. Taking care of these will help you travel with peace of mind, knowing that if you don’t return, you have made things much easier for those you love.
1. Have your estate planning done. If you have been procrastinating about your estate planning, use your next trip as your deadline to finally get this done. If you don’t have an attorney, ask friends and acquaintances for referrals. If you aren’t sure about some decisions, your attorney can help you. If money is tight, start with what you can afford (a will, power of attorney, health care documents) and upgrade to a living trust when you can. Be sure to allow adequate time to get your estate plan completed in advance of your trip.
2. Review and update your existing estate plan. Revisions should be made any time there are changes in your family (birth, death, marriage, divorce, remarriage), your finances, tax laws, or if a trustee or executor can no longer serve. Before you travel is a perfect time to do this. Again, be sure to allow enough time to have the changes made.
3. Review titles and beneficiary designations. If you have a living trust and did not finish changing titles and/or beneficiary designations, now is the time to do so. Some assets should not go into your trust, so check with your attorney and make sure those are as they should be. If a beneficiary has died or if you are divorced, change these immediately. Also, if your beneficiary is incapacitated or is a minor, setting up a trust for this person and naming the trust as beneficiary will prevent the court from taking control of the proceeds.
4. Review your plan for minor children. If you haven’t named a guardian who is able and willing to serve and something happens to you, the court will decide who will raise your kids without your input. If you have named a guardian, consider if this person is still the best choice. The person you name when your children are small may not be the best choice as they get older. This person may also change his/her mind, move away, become ill or die, so name at least one back-up in case your first choice cannot serve. Select someone responsible to manage the inheritance.
5. Review and update incapacity documents. Everyone in your family over the age of 18 needs to have these: 1) Durable Power of Attorney for Heath Care, which gives another person legal authority to make health care decisions (including life and death decisions) for you if you are unable to make them for yourself; and 2) HIPPA Authorizations, which give written consent for doctors to discuss your medical situation with others, including family members.
6. Review and update your insurance. Before you travel is an excellent time to do this. Check the amount of your life insurance coverage and see if it still meets your family’s needs. Consider getting long-term care insurance to help pay for the costs of long-term care (and preserve your assets for your family) in the event you and/or your spouse should need it due to illness or injury.
7. Organize your accounts and documents. This is an excellent thing to do before you travel, and it will make things much easier for your trustee/administrator. It used to be that we could just point to a file cabinet and say everything was “in there.” But now so much is done online that there may not even be a paper trail. Make a list of ALL of your accounts, where they are located, and the user names and passwords, then review and update it before each trip. Print a hard copy in case your computer is stolen or crashes and let someone you trust know where to find it. Clean up your computer desktop and put your financial and other important files where someone can easily find them. Make a back-up copy in case your computer is stolen or crashes, and let someone know where to find it. Be sure to include on your master list any passwords that might be needed to access your computer and files.
8. Talk to your children about your plan. You don’t have to show them bank and financial statements, but you can talk in general terms about what you are planning and why, especially when any changes are made. The more they understand your plan, the more likely they are to accept it—and that will help to avoid discord after you are gone. You can also talk to them about your values and the opportunities that money can provide.
Contributed by Morris Hall, PLLC Arrowhead, Phoenix and Scottsdale Estate Planning Attorney and Partner, David T. Eastman.