Thursday, February 26, 2015

Planning for Vacation

Today’s blog takes a break from the complex gifting and tax issues we addressed in the past few posts to talk about aspects of estate planning that arise while preparing for a vacation. We will return to our discussion of gift issues next week. 

     With the unrelentingly cold weather and impending “Spring Break” weeks for many school districts, our thoughts turn to vacation, many of which involve trips to warmer climates. However, upcoming trips should prompt people to think about their current estate plans and some of the possible changes they have been putting off.
Here are a few tips to think about before setting off on vacation:
  • Do you have a Grandparent/Caregiver Power Of Attorney? If you are vacationing but leaving your minor children home with a grandparent or caregiver, do you have a written document giving the caregiver authority to make medical or other decisions in your absence. This document can be crucial in the event of an accident, and can provide you comfort knowing that caregivers can handle emergencies even while you are relaxing and enjoying your trip.
  • Do you have a list of assets, passwords, and important contacts? Many people manage most or all of their financial assets online and it is important to have a record of your accounts and passwords so that those you have named to act on your behalf for the benefit of your family can easily locate this information. This information should be part of the list of assets and advisor contact information you keep with your important estate planning documents. While this may require some time on your part, it can save your family significant time and money if misfortune should befall you. 
  • Are your disability documents current and available to those you have named? In Michigan a Durable Power of Attorney, for financial decisions, and a Patient Advocate Designation, for medical decisions, are essential to allowing another to act on your behalf in the event you become incapacitated. Before vacationing, you should be sure the documents are up-to-date and that those designated know where to locate these documents. You may even want to discuss your wishes with your designated agents.
  • Are your beneficiary designations are up-to-date? With proper designations, assets such as retirement accounts brokerage accounts and life insurance can pass directly to designated beneficiaries and avoid probate. If you have a Trust, these assets can be designated the beneficiary and allowed distributions pursuant to the provisions you have set forth in your Trust.
  • Are there any changes you have been contemplating making in your Will and Trust? While we usually suggest you review and update your estate planning documents every 3 to 5 years, while planning for a big trip you also may want to review your documents to make sure that provisions for your family, and those you have designated to fulfill those provisions, are still as you want them.
     Time spent on these issues will allow you to relax and enjoy your vacation knowing that your estate planning is in good order.

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