You and your spouse have dreamt of this vacation for months. You have saved for it. And now, finally, the sand and surf beckon for a second honeymoon. You have gone over your checklist several times. You packed your favorite swimsuit and your good walking shoes. You even made sure to hide that Hawaiian shirt you would rather your spouse not bring. You made sure the kids are ready to go to your parents’ house – or as ready as possible. Is the thermostat set? Who’s taking care of the mail? You know the routine; we have all done this many times before. But, as we prepare for a long vacation, inevitably we wonder “what if”. What if something happens at the house; I better have someone check on it and water the plants. What if something happens at the office; I better give them my cell phone number. What would happen to the kids if we were in an accident?
These thoughts probably have entered every parent’s mind at some point. Our fears of dying while traveling have been heightened due to the 9/11 tragedy. However, the risk of dying while traveling is quite low.
While the risks are low, part of planning is to ease fears to make the trip more enjoyable. Some fears cannot be eliminated, but others can. Basic estate planning, even at the last minute, can help ease fears and help make things smoother if the unthinkable happens. The basic estate plan includes four documents: General Durable Power of Attorney, Health Care Durable Power of Attorney, Will, and Revocable Trust.
- Through a General Durable Power of Attorney you designate an “Agent” who will make financial decisions for you when you are unable to do so. You can name your spouse, a parent, or a trusted friend. Without this document, nobody is authorized to act for you if you are missing or incapacitated.
- A Health Care Durable Power of Attorney designates an “Agent” to make health care decisions for you if you are unable to make them yourself. With this document in place, you know that the person you trust will have legal authority to make medical decisions for you.
- A Will has several functions. First, and most importantly, under the laws of most states it is the only way you can designate whom you wish to serve as guardian for your minor children. Without a Will, a judge who has barely met your children will decide who will be guardian, regardless of your wishes. Second, the Will distributes any assets that are held in your name. Without a Will, the assets are distributed according to “intestate succession,” the default beneficiaries under state law. Unfortunately, this fixed intestate succession does not take your specific circumstances into account and assets often do not go to the desired person or in the desired manner. The assets can “pourover” into a Revocable Living Trust, to be distributed by its terms.
- Even with a Will, any assets owned by you must go through “probate” at your death in order to be distributed as desired by you. Probate is the process of transferring legal title from the person who died to the person who has the right to receive the property. This process can be expensive, time consuming, and emotionally draining for those left behind. If you set up a Revocable Living Trust during your lifetime, it holds legal title to your assets. As a result, the assets do not go through probate at death because the trust owns them and the trust did not die. If you become incapacitated, the person you selected as your successor “Trustee” will manage the assets for you. The Trust can be very flexible. For example, the Trust can be used to ensure that your children do not squander the money on sports cars but use it for college instead.
Specifically for your trip, you also may wish to consider giving a temporary medical authorization for health care treatment for your minor children to whomever you leave them with.
If you wait until the last minute, you still may be able to accomplish much of the basic planning, while deferring a part until your return. See a qualified estate planning attorney to allay your travel fears. Then, relax and enjoy your well-deserved time in the sun.
Mr. Ronald “Chip” Morrison, Jr. is a Board-Certified Specialist in Estate Planning and Administration by Louisiana Board of Legal Specialization and a member of the American Academy of Estate Planning Attorneys. He has been engaged in Louisiana trusts and estate law for the last 15 years. Our firm serves clients throughout southern Louisiana. For more information or to attend an upcoming seminar, please call our office at (504) 831-2348 or contact us through our website.