The Difference Between an Heir and a Beneficiary

October 15, 2024

When it comes to estate planning, it’s essential to understand the difference between an heir and a beneficiary. While these terms are often used interchangeably, they have distinct meanings that can affect who receives your assets after you pass away. According to Nerd Wallet, knowing how heirs and beneficiaries work is key to ensuring that your estate plan reflects your wishes and protects your loved ones.

An heir legally inherits property from a person who dies without a will, a situation called dying intestate. When someone dies intestate, the state’s probate court follows local laws to determine who the heirs are and how the property should be distributed.

The closest relatives are usually given priority. For example, a spouse or children are often the first to inherit, followed by parents and other family members like siblings, nieces and nephews. The specifics depend on your state’s inheritance laws, so it’s always wise to understand how this works in your area.

If you have a will or trust, heirs are not automatically guaranteed to inherit your property, unless they are named beneficiaries.

A beneficiary is a person or entity specifically named in a will, trust, or other legal document to inherit assets. Unlike heirs, beneficiaries can include family members, friends, charitable organizations or even pets.

Beneficiaries are designated through estate planning tools such as wills, trusts, or life insurance policies. You can name specific people to receive certain assets and include instructions on what should happen if one of your beneficiaries cannot inherit. This flexibility allows you to customize your estate plan according to your specific wishes.

If you pass away without a will, the court will decide who your heirs are based on state law. On the other hand, if you have a will or trust, you get to choose your beneficiaries. Doing this prevents you from leaving the decision to the court, ensuring that your assets are distributed the way you want.

For example, if you want your spouse to inherit most of your assets but also wish to leave a portion to a close friend or charity, you can name them as beneficiaries in your estate plan. This way, you control who inherits your estate instead of relying on default state laws.

If you don’t have a will or don’t name beneficiaries on key assets, such as life insurance policies or retirement accounts, your loved ones may have to go through the probate court process. The court will use intestacy laws to determine your heirs and distribute your assets, which might not align with your wishes.

In some cases, if no heirs can be found or named, your estate could go to the state through a process called escheat. This situation can leave your family without the inheritance you intended for them. Create a clear, legally binding estate plan that outlines who your beneficiaries are to avoid these outcomes.

Naming beneficiaries in your estate plan is straightforward but requires careful thought and organization. Here’s how you can start:

Take inventory of your assets – Make a list of everything you own, including property, investments and sentimental items.
Decide who will benefit from your estate – Consider who would benefit the most from your assets. You can choose close family members, friends, or even charitable organizations.
Name beneficiaries in a will or trust – Work with an estate planning attorney or use an online service to create a will or trust that clearly outlines your beneficiaries.
Update your beneficiary designations—Name beneficiaries directly on assets like life insurance policies or retirement accounts. This ensures that the assets pass directly to them, avoiding probate.

By understanding the difference between an heir and a beneficiary, you can use estate law to control the legacy you leave behind. If you would like to learn more about heirs and beneficiaries, please visit our previous posts.

Reference: NerdWallet (Nov. 13, 2023) “What Is an Heir? Meaning and Types”

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Important Steps to take After the Passing of a Spouse

October 9, 2024

The passing of a spouse is one of life’s most stressful events, topping the list of most mental health checklists for anxiety-creating experiences. There are important steps to take after the passing of a spouse. It’s important to build in answers to “what if’s” into an estate plan, advises a recent article from The Penny Hoarder, “How to Change Your Estate Plan After Your Spouse Dies.”

It’s easy to procrastinate estate planning. However, even if you have a will, as 1.3 million Americans do, you’re not finished. Regular updates of your estate plan to reflect new circumstances are necessary, especially upon the death of a spouse. It’s complicated to do this when grief is fresh. However, it becomes manageable by taking this task one step at a time.

Married couples typically create their estate plans together, with the understanding of one spouse outliving the other. Being realistic about who is likely to die first sounds a bit morbid. However, it should be taken into consideration. Males tend to have shorter lifespans, while people who live with chronic conditions, like diabetes, heart disease, or cancer, should keep the impact of their conditions in mind when making plans for the distant or not-so-distant future.

Powers of Attorney should be updated every few years. This is the person chosen to handle financial and legal affairs in case of incapacity. In most cases, this is assigned to a spouse, so it should be updated soon after the spouse passes. The power of attorney does not have to be an adult child but should be trusted, organized, and financially savvy.

Another document to be updated is the Healthcare Proxy, sometimes called a Medical Power of Attorney. An adult child living nearby, a trusted friend, or another relative needs to be named and the document executed in case you should become incapacitated. This way, someone can act on your behalf without going to court to obtain guardianship.

Wills and trusts need to be updated. With your spouse’s passing, your estate may now be vulnerable to estate taxes on the state and federal levels. Who do you want to inherit your property from, and what’s the best way to pass assets on to the next generation? An experienced estate planning attorney will be needed to make this happen most efficiently and expeditiously.

After a spouse passes, you’ll also want to review beneficiaries on life insurance, retirement accounts and any accounts with a named beneficiary. If these documents have contingency beneficiaries who receive the assets, you’ll be in good shape if the primary beneficiary has died. However, do you know for sure the accounts are structured this way? Reviewing all these accounts is surely a good idea.

It may be time for the estate to include a trust. The most significant change occurring when a spouse dies is the surviving spouse is now legally considered single. All states have laws about how much assets may be owned to qualify for Medicaid. This number is dramatically lower for a single person than for a married couple. The surviving spouse may need to put their assets into a trust to exempt some assets that would otherwise need to be spent down before qualifying for Medicaid.

This is also the time to review end-of-life documents, including a Living Will and other medical directives.

There’s no way to make the loss of a spouse easy. However, these important steps to take after the passing of a spouse will provide some peace of mind. If you would like to learn more about planning for surviving spouses, please visit our previous posts.

Reference: The Penny Hoarder (Sep. 5, 2024) “How to Change Your Estate Plan After Your Spouse Dies”

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Unique Challenges to Estate Planning for Non-Citizens with U.S. Assets

October 2, 2024

There are unique challenges to estate planning for non-citizens with U.S. assets. Non-citizens’ estate planning isn’t something that all estate lawyers are ready to handle. However, avoiding an excess tax burden is important. However, the right help can drastically reduce your tax burden and increase what you leave behind to loved ones.

One of the most important factors to consider regarding estate planning for non-citizens is residency status. The U.S. estate tax laws apply differently to residents and non-residents. Guardian Life shares that U.S. citizens and residents are entitled to a significant estate tax exemption—currently set at $13,610,000 for 2024.

However, non-residents with U.S. assets face a much smaller exemption of just $60,000. This stark difference means that non-citizens may be subject to high estate taxes, potentially up to 40% on assets exceeding the $60,000 threshold.

Residency status is a critical element in determining estate tax obligations. The Internal Revenue Service (IRS) uses the concept of “domicile” to decide who qualifies for the higher exemption. A person is considered domiciled in the U.S. if they live there and intend to remain permanently. Non-citizens who do not meet these criteria are considered non-residents and are subject to the lower exemption.

For example, someone living in the U.S. on a non-resident visa might still be considered domiciled for estate tax purposes. This contrasts with income tax rules, which would still treat them as a non-resident.

There are several strategies that non-citizens can employ to minimize their U.S. estate tax obligations:

Gifting Assets During Lifetime: One effective way to reduce estate taxes is by gifting assets while the donor is still alive. The IRS allows an annual exclusion for gifts up to $17,000 per recipient without any tax implications. This strategy can help decrease the value of the estate subject to tax upon death.
Leveraging Estate Tax Treaties: The U.S. has estate tax treaties with several countries, providing more favorable exemptions for residents of those countries. These treaties can significantly reduce estate tax obligations for non-citizens, making it crucial to understand which countries have such agreements with the U.S.
Utilizing Life Insurance: Life insurance can be a powerful tool in estate planning for non-citizens. Life insurance payouts are generally exempt from U.S. estate taxes, making them an attractive option for providing liquidity to cover any potential estate taxes without selling off other assets.

Given the complexities of U.S. estate taxes for non-citizens, seeking advice from experienced estate planning professionals who understand U.S. tax law and international estate planning is crucial. This includes not only tax attorneys but also financial advisors who are familiar with cross-border tax issues. A well-crafted estate plan can ensure that your assets are protected, and your family’s financial future is secure.

There are unique challenges to estate planning for non-citizens with U.S. assets. If you’re a non-citizen with U.S. assets, the tax implications can be significant. However, with the right planning, they don’t have to be. If you would like to learn more about planning for non-citizens with US assets, please visit our previous posts.

Reference: Guardian Life (Aug. 28, 2024) “US estate tax strategies for noncitizens and nonresidents with US assets”

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Safeguarding Wealth is an Essential Strategy for Senior Women

September 30, 2024

Women are living longer and facing unique financial challenges. With life expectancy for women being higher than men, senior women need their retirement savings to stretch further. According to JP Morgan, they often find themselves with less saved due to career breaks for caregiving and the persistent gender pay gap. Safeguarding wealth is an essential strategy for senior women to ensure financial security in their later years.

Retirement planning for women should consider their longer life expectancy and potential career interruptions. A well-crafted financial plan, designed with the help of knowledgeable advisors, can help address these concerns.

Women should actively participate in creating a plan that aligns with their lifestyle needs and future goals, factoring in anticipated and unplanned career breaks. It is also essential to regularly assess savings and investments to ensure that they are on track for a comfortable retirement.

Many women find themselves in the role of caregiver for aging parents. This responsibility often comes with both emotional and financial burdens. Women are more likely than men to leave their jobs to take care of aging parents, impacting their own retirement savings.

Beyond financial concerns, women should also consider the time and energy required for caregiving. Planning with family discussions about responsibilities can help ensure that these roles are agreed upon and manageable.

The American College of Trust and Estate Counsel Foundation highlighted the importance of women’s estate planning with the story of Huguette Clark, a wealthy woman who became isolated in her later years. Despite her wealth, Clark spent the last 20 years of her life alone in a hospital room, away from her multiple luxurious homes. She was fearful that everyone was after her money and chose to remain secluded.

Clark’s relatives challenged her will, claiming she was not of a sound mind when it was created. The case was settled. However, it illustrates how vital it is for senior women to protect their wealth and ensure that their wishes are respected.

Women should actively engage in estate planning to protect their wealth and ensure their financial security. This includes creating a will, setting up trusts and naming trusted individuals to manage their estate in case of incapacity. Understanding and participating in these decisions are crucial for senior women to prevent potential disputes and ensure that their assets are distributed according to their wishes.

Estate administration is another critical aspect of wealth planning for women. When a loved one passes, the burden of administering their estate often falls on women. This role includes locating assets, paying off debts and distributing inheritances, which can be a complex and time-consuming process. By planning ahead and discussing estate administration with family members, women can ensure that they are prepared to take on this role or appoint someone else who is better suited.

Safeguarding wealth is an essential strategy for senior women. If you are looking to secure their financial future, assembling a team of trusted advisors is a crucial first step. This team should include a financial advisor, an estate planning attorney and a tax professional who understand women’s unique challenges.

These advisors can help develop a comprehensive plan that aligns with a woman’s financial goals, family responsibilities and long-term needs. Regular communication with this team ensures that the plan adapts to changing circumstances, providing peace of mind and financial security. If you would like to learn more about planning for women, please visit our previous posts.

References: J.P. Morgan (Mar. 20, 2024) “Wealth Planning Is a Women’s Issue” and The American College of Trust and Estate Counsel (ACTEC) Foundation (Mar. 20, 2024) “Balancing Independence and Vulnerability of Older Adults: What if Granny Wants to Gamble?”

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Estate Planning Essentials for LGBTQIA+ Couples

September 25, 2024

Estate planning essentials are crucial for everyone, but can be especially vital for LGBTQIA+ couples. Even though marriage equality laws have leveled the playing field in many ways, there are still unique challenges and opportunities that LGBTQIA+ couples should consider. Creating and updating your estate plan to reflect your changing life situation is key to protecting your assets and loved ones.

Like any other couple, LGBTQIA+ couples must have certain essential documents in place to protect their rights and wishes. These include:

Living Will: Outlines your wishes for end-of-life care if you cannot communicate them yourself.
Health Care Power of Attorney: Designates someone to make medical decisions on your behalf if you’re incapacitated.
Durable Financial Power of Attorney: Allows someone to manage your financial affairs if you cannot.
HIPAA Privacy Authorization: Ensures that your designated person can access your health information when necessary.

These documents are critical for ensuring that your wishes are respected, especially when one partner might not be recognized as a legal spouse due to outdated or incorrect paperwork.

One of the unique challenges for LGBTQIA+ couples, particularly those with children, is the legal recognition of both parents. In many cases, only one partner is the biological parent, which can create complications if the biological parent passes away or if the couple separates.

By adopting their partner’s child, non-biological parents can establish a legal relationship with the child and obtain parental rights. This can prevent disputes over custody with extended family members and protect the child’s inheritance rights.

LGBTQIA+ individuals must ensure that the beneficiary forms for their insurance plans, retirement accounts and other financial assets are current. These forms override what is written in a will. Therefore, if you forget to replace an ex-partner or family member as a beneficiary, that person will inherit those assets.

This is especially important for LGBTQIA+ couples who may have previously named someone other than their spouse as a beneficiary before their marriage was legally recognized. Regularly reviewing and updating these forms, especially after major life events, ensures that your assets go to the person you intend.

Before same-sex marriage became legal, many LGBTQIA+ individuals entered into domestic partnerships, civil unions, or other legal arrangements to protect their relationships. However, some states automatically upgraded these partnerships to marriages when the law changed, sometimes without the couple’s knowledge.

This can create a “tangled web” of legal relationships that could lead to complications with your estate. For instance, if you didn’t formally dissolve a previous partnership, your former partner might have a claim to your estate. It’s important to resolve any past legal unions to prevent future disputes.

In a story shared in the MassMutual blog, Joan Burda, an attorney in Lakewood, Ohio, shares the cautionary tale of LGBTQIA+ couples who entered domestic partnerships or civil unions before legalizing same-sex marriage. These partnerships were sometimes automatically upgraded to marriages without the couple’s knowledge when laws changed, leading to unexpected complications.

For instance, couples who thought they had dissolved their previous legal relationships might find that their former partners still have legal claims on their estate. This underscores the importance of reviewing and resolving all prior legal unions to prevent future disputes and ensure the full protection of their current relationships.

Estate planning is not a one-time event. Laws change, relationships evolve and your plan needs to reflect those changes. LGBTQIA+ couples should take time for a review of their estate planning essentials, resolve any past legal relationships and ensure that their beneficiary forms are up to date.

Your relationship and family deserve the strongest legal protections available. Don’t leave your future to chance—ensure that your estate plan reflects the unique needs of LGBTQIA+ couples. If you would like to learn more about planning topics for same sex couples, please visit our previous posts.

Reference: MassMutual (June 06, 2024) “Estate Planning for LGBTQIA+ Couples”

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Women should Plan for a Second Retirement

September 23, 2024

Many spouses design their retirement finances and estate plans with their spouses. However, planning for the second phase of retirement and estate plans also needs to be done. Women should plan for a second retirement. When the first spouse dies, the surviving spouse would be well served by a plan for the “second retirement,” as explored in a recent article from Nasdaq, “I’m a Financial Expert: 7 Ways Ever Woman Can Prepare for a ‘Second Retirement.’”

In 2021, data from the U.S. Census Bureau shows that 30% of all older women were widows. There were also more than three times as many widows as widowers.

How do you plan? It depends on your age and financial situation. For instance, becoming a widow in your 60s is very different from becoming widowed in your 80s. If your network of friends and family was through your spouse, this may also change dramatically after their death.

The most important question is what the household income will be upon losing the first spouse. This must be considered if the decedent had a pension, annuity, or other income source that stopped upon their death. A surviving spouse can’t claim a deceased spouse’s Social Security benefits in addition to their own. You can only receive one of two benefits—either your retirement or survivor benefit.

Some pensions end upon the account owner’s death, while some allow for survivor benefits. These are usually a percentage of the original amount, or they may offer a lump sum payment.

Living costs will change when the first spouse dies. The surviving spouse may be able to move to a smaller home or sell a second car. However, certain costs will go away. Meanwhile, other costs may occur, like one-time taxes on inherited IRAs and taxes on the sale of property and vehicles. Losing the spouse might mean some services, like home maintenance, will need to be paid for.

The death of a spouse will incur certain legal and administrative costs. If there was no will, probate is expensive and will be necessary. An estate planning attorney may be needed to help settle an estate if there was no will, while costs will be less if a will and trusts were created before the spouse died.

Major changes in circumstances like the death of a spouse can throw even the highest functioning people into a difficult emotional state. Women should plan for a second retirement that will help make the transition into their new life easier, or at least as easy as possible.

Speak frankly with an estate planning attorney about revising your estate planning documents and preparing for the second retirement. There will be more than enough to deal with at the time; it will be better if planning can be done in advance. If you would like to learn more about retirement planning for women, please visit our previous posts.

Reference: Nasdaq (August 17, 2024) “I’m a Financial Expert: 7 Ways Ever Woman Can Prepare for a ‘Second Retirement’”

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Understanding Primary and Contingent Beneficiaries is essential for Estate Planning

September 3, 2024

Creating an estate plan is the most important way to ensure that your wishes will go into effect after you pass away. During estate planning, you’ll have to designate beneficiaries. Understanding the difference between primary and contingent beneficiaries is essential for estate planning. Knowing this distinction can make your estate plan more comprehensive and effective, giving you peace of mind that your loved ones will be okay when you’re gone.

A primary beneficiary is the person or entity you choose to receive your assets first when you pass away. This could be a spouse, a child, a friend, or even a charity. When you set up a will, trust, or other financial accounts, like life insurance or retirement, you’ll be asked to name one or more primary beneficiaries.

You might name your spouse as the primary beneficiary if you have a life insurance policy. If you pass away, your spouse will receive the payout directly.

Choosing a primary beneficiary ensures that your assets go to the person or organization you want them to benefit. It can also help avoid conflicts among family members and ensure a smooth transfer of assets. You minimize the chances of disputes and legal challenges by clearly designating who should receive your assets.

Life is unpredictable, and there might be situations where your primary beneficiary cannot receive your assets. They might predecease you, be unable to be located, or simply refuse the inheritance. This is where a contingent beneficiary comes into play.

A contingent beneficiary, or secondary beneficiary, is essentially a backup beneficiary. The contingent beneficiary is next in line if the primary beneficiary cannot receive the assets. For instance, if your spouse is the primary beneficiary and they pass away before you, your contingent beneficiary will receive the assets instead.

According to ElderLawAnswers, naming a contingent beneficiary is essential in estate planning. A contingent beneficiary is designated to receive your assets if your primary beneficiary cannot do so.

This additional layer of planning provides security and peace of mind, guaranteeing that your assets are passed on as you intended, regardless of any unexpected events involving your primary beneficiary. Your wishes will remain clear even in unforeseen circumstances, and your estate plan will carry them out.

Yes, you can designate multiple primary and contingent beneficiaries. This is particularly useful if you have a large estate or multiple heirs. For example, you might want to divide your estate equally among your children. In this case, you can name all your children as primary beneficiaries, each receiving a specified percentage of your assets.

When you have multiple primary beneficiaries, your assets are divided according to the percentages you specify. If one of the primary beneficiaries cannot receive their share, their portion can be reallocated to the remaining primary beneficiaries or passed on to the contingent beneficiaries.

You can similarly have multiple contingent beneficiaries. For example, you might name your spouse as the primary beneficiary and your two children as contingent beneficiaries. If your spouse cannot receive the assets, your children would then receive the assets consistent with your instructions.

While beneficiaries are individuals you choose to receive your assets, heirs-at-law are entitled to inherit from you under state law if you don’t have a will. Without an estate plan, state intestacy laws will distribute your assets. This usually goes to your closest relatives, such as your spouse and children. Designating primary and contingent beneficiaries allows you to control who receives your assets rather than leaving it to state law.

Life circumstances change, and so should your estate plan. Major life events such as marriage, divorce, the birth of a child, or the death of a beneficiary may require updates to your beneficiaries. Regularly reviewing and updating your estate plan ensures that it remains aligned with your current wishes and life situation.

Understanding the roles of primary and contingent beneficiaries is essential for robust estate planning. It ensures that your assets are distributed according to your wishes, even in unexpected circumstances.

An experienced estate planning attorney can help you designate beneficiaries, create a comprehensive estate plan and provide peace of mind for you and your loved ones. If you would like to learn more about beneficiaries and their role in estate planning, please visit our previous posts.

Reference: ElderLawAnswers (May 20, 2024) “What Is a Contingent Beneficiary?”

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Ensure your Child’s Future is Protected with Estate Planning

August 26, 2024

Becoming a parent is an exciting journey filled with dreams and plans for the future. Amidst the joy and anticipation, you also need to consider your child’s future security. While no one wants to think of it, the worst could happen to you, and you could become unable to care for your child. Without an estate plan, your assets could go through a lengthy probate process, and the court would decide on guardianship for your children. Ensure your child’s future is protected with estate planning.

Estate planning involves organizing your financial affairs to ensure that your assets are managed and distributed according to your wishes after you pass away. It includes creating a will, assigning power of attorney and considering trusts. According to Experian, planning ahead can avoid potential legal complications and ensure that your loved ones are taken care of. Estate planning can also help minimize taxes and protect your assets from creditors.

Without a will, state laws determine the distribution of your assets and the guardianship of your children. This could mean that your child ends up with a relative you haven’t spoken to in years or foster care. An estate plan allows you to choose guardians and ensure that your child’s future is secure.

A will is the foundation of your estate plan. It should:

Name a guardian for your children.
Name an executor to manage your estate.
Specify who inherits your assets.

Power of attorney allows someone to make financial and health care decisions on your behalf, if you become incapacitated. This includes:

Financial Power of Attorney: Give someone the power to manage your finances and property.
Health Care Power of Attorney: Empower someone you trust to make medical decisions for you.

The best time to start estate planning is now. Waiting until your baby arrives can lead to delays and potential financial hardships. Building an emergency fund, contributing to a health savings account and setting up automatic savings transfers are great first steps. Proactively managing your finances can help reduce stress and ensure a smoother transition into parenthood. Starting early also allows you to make informed decisions and adjust your plan.

When Joyce Marter, a financial therapist and author, was expecting her first daughter, she found herself living paycheck to paycheck with substantial student loans. In an article by the NY Post, she reflects and explains how she realized the immense value of having a solid financial plan before transitioning into parenthood. Marter recalls a conversation with her pregnant supervisor, who advised her that no one is ever truly ready for a baby: “None of us are really ever truly ready — you just take the plunge and figure it out as you go.”

Years later, as Marter prepared for her own child, she understood the importance of proactive financial planning. She began by building an emergency fund, contributing to a health savings account and avoiding unnecessary baby registry items. These steps provided a financial safety net and helped reduce stress during her pregnancy.

Don’t wait until it’s too late. Ensure that your child’s future is protected and your wishes are honored with proper estate planning. If you would like to learn more about planning for minor children, please visit our previous posts.

References: NY Post (Oct. 18, 2023) “Savvy expecting parents need to start financial planning now” and Experian (Oct. 13, 2020) “How to Plan Your Estate as a New Parent – Experian”

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Disability Insurance is a vital Component of Estate Planning

August 22, 2024

Disability insurance is a vital component of comprehensive estate planning. It ensures that you and your family can maintain financial stability in the event of a disabling condition. According to the American Medical Association (AMA), understanding the essential aspects of disability insurance is vital to choosing the best policy for your needs.

Disability insurance provides income replacement if you’re unable to work due to illness or injury. It is a safety net that ensures that you can continue to meet financial obligations, even when you are not earning a regular salary.

Imagine being the primary breadwinner for your family. One day, you suffer a severe injury that prevents you from working. Without disability insurance, the loss of income could lead to significant financial hardship. Disability insurance provides stability by covering these losses while you get back on your feet.

Selecting the right disability insurance policy requires understanding various factors and terms. For one, you need to understand the kind of liabilities you have to choose from to find the most suitable coverage. Combine this with Riders that match your needs to get customized, affordable disability coverage.

Own-Occupation: This type provides benefits if you cannot perform the duties of your specific occupation. It’s ideal for professionals, like doctors or lawyers, who have specialized skills.
Any Occupation: This type only provides benefits if you cannot work in any occupation suited to your experience and education. It’s less expensive but offers broader coverage.
Modified Own-Occupation: You receive benefits if you cannot perform your job and are not working in another job. This is a middle-ground option that balances cost and coverage.

What Riders are Available for Disability Insurance?

Residual Disability Rider: Provides partial benefits if you can work part-time but not full-time.
Cost of Living Adjustment (COLA) Rider: Adjusts benefits according to inflation, maintaining your purchasing power.
Future Increase Option Rider: You can increase coverage as your income grows without additional medical exams.

The cost of disability insurance varies based on several factors:

Age and Gender: Younger individuals and women typically pay higher premiums.
Occupation: High-risk jobs attract higher premiums.
Health: Pre-existing conditions can increase the cost.
Coverage Amount and Duration: Higher benefits and longer durations cost more.
Policy Riders: Additional features, like cost-of-living adjustments, can raise premiums.

Disability insurance is a vital component of comprehensive estate planning. Protecting your future requires careful planning. Once you’re injured, it’s too late to begin planning. That’s why you should contact an experienced attorney and start planning today. If you would like to learn more about disability insurance, please visit our previous posts.

Reference: American Medical Association (AMA) (May 21, 2024) “Evaluating a disability policy | American Medical Association”

Ensure your College-Bound Student has Documents in Order

August 5, 2024

Sending your child to college is a major milestone but comes with important legal considerations. Now that they live independently, handling a medical emergency could be much more complicated. The Wall Street Journal makes the case that, as parents, you must ensure your college-bound student has their documents in order. This way, you can help them if they need it in any situation.

When your child turns 18, you lose access to their medical, financial, or academic records. You could face significant hurdles in helping them during emergencies without the proper legal documents. There are four essential legal documents.

A HIPAA waiver allows your child to grant you access to their medical records. Without this form, healthcare providers cannot share any medical information with you due to privacy laws. This waiver ensures that you stay informed about your child’s health and can make informed decisions in a medical emergency.

A medical power of attorney designates someone to make medical decisions on your child’s behalf if they cannot. If your child becomes incapacitated due to illness or injury, you’ll need this document to manage their care. Families without a medical power of attorney will have to delegate important healthcare decisions to people they don’t know.

With a durable power of attorney, you can manage your child’s financial affairs if they cannot do so. This can include paying bills, handling bank accounts, and managing investments. This document is particularly important if your child is studying abroad or becomes incapacitated.

The Family Educational Rights and Privacy Act (FERPA) protects the privacy of student education records. A FERPA waiver allows your child to grant you access to their academic records. This can be important if you need to stay informed about their academic progress or assist in managing their education.

Without these legal documents, you could face significant challenges in assisting your child. For instance, you could be unable to learn about your child’s condition if they become hospitalized. You would also be unable to make decisions on their behalf to manage their care or finances.

Most of these documents can be obtained online for free or through your attorney. Ensuring that the forms meet your state’s legal requirements is essential. Some documents may require notarization. Here’s a brief guide on how to obtain each:

HIPAA Waiver: Available online or from your child’s healthcare provider.
Medical Power of Attorney: Available online, but ensure it complies with state-specific laws.
Durable Power of Attorney: Obtained from an attorney to ensure it meets state legal standards.
FERPA Waiver: Available through your child’s college or university.

The requirements for legal documents for college students can vary by state. If your child is attending college out of state, you may need to prepare valid documents for your home state and the state where your child studies. Consulting with an attorney helps properly prepare and execute all documents.

A durable power of attorney becomes even more critical if your child studies abroad. This document ensures you can manage their financial matters and make decisions on their behalf if they encounter issues while overseas.

Preparing these essential legal documents ensures your college-bound student has their documents in order and gives you peace of mind. Don’t wait until an emergency arises; take action now. If you would like to learn more about planning for college age children, please visit our previous posts.

Reference: WSJ (Aug. 14, 2023) “Before Your Child Goes to College, Complete These 6 Important Documents – WSJ”

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Category: Assets

The Difference Between an Heir and a Beneficiary

Important Steps to take After the Passing of a Spouse

Unique Challenges to Estate Planning for Non-Citizens with U.S. Assets

Safeguarding Wealth is an Essential Strategy for Senior Women

Estate Planning Essentials for LGBTQIA+ Couples

Women should Plan for a Second Retirement

Understanding Primary and Contingent Beneficiaries is essential for Estate Planning

Ensure your Child’s Future is Protected with Estate Planning

Disability Insurance is a vital Component of Estate Planning

Ensure your College-Bound Student has Documents in Order

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