A Will Alone Won’t Cut It

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Only four in 10 Americans have a will, according to figures from AARP. And oftentimes people who have a will call their estate planning efforts good enough.

In addition to having to review their estate planning documents in light of the Tax Cuts and Jobs Act, clients must have other documents and plans in place to call their estate planning efforts complete.

CNBC reported in the article, “12 Financial Planning Documents to Handle Health, End-of-Life Care,” that your clients might need more. Clients should have the following documents in place and updated:

Healthcare proxy. Have your clients pick a person who can make medical decisions for them and then a back-up person in case their primary choice is unable to do it for some reason. Encourage clients to choose people who have the same ideas about quality of life, CNBC reported.

Living will. Ensure clients have a document that establishes what type of care they’d want in case of incapacitation, and make sure they put it in an easy-to-access spot for their family members. Should they get sick and they have their living will in a safe-deposit box, it won’t be easily accessible for family members in that time of stress.

Durable power of attorney. Have clients pick somebody who can pay bills and take care of other financial matters in case of incapacitation. The CNBC article reminds us that banks might have separate forms that need to be updated regularly.

Diminishing capacity letters. Bringing the topic of diminished capacity up to clients now, before their capacity starts to diminish, and creating a plan of action can help curb any confusion about what to do in the future. Ask clients to sign documentation of the plan so you have a specific course of action on who to contact and work with should this happen to them.

Pet trusts and letter of final wishes. Perhaps your client is the last living spouse and the dog or cat would be left all alone upon his or her death. Your client can establish a pet trust to provide for his or her pet’s needs and a letter of final wishes that determines who gets custody of the pet and the pet trust, Forbes reported in an article, “Estate Planning: Include Your Pets.”

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Ana Trujillo Limón is associate editor of the Journal of Financial Planning and the editor of the FPA Practice Management Blog. Email her at alimon@onefpa.org. Follow her on Twitter at @AnaT_Edits.

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