Written By: The American Academy of Estate Planning Attorneys
Every year thousands go on vacation. And they’ve likely planned it to a tee – which hotel to stay at, which sights to see, and they’ve maybe even scouted the local restaurants that are a “must-try” on their trip. But, when it comes to planning, one of the most important, often-overlooked items is making sure your “what if’s” are in order. For example, what if something happens to the house while you are gone? What if something happens at work? Or worse, what would happen to the kids if you were in an accident? The last thing you want is to wake up in the middle of the night in your bungalow overlooking the ocean in Tahiti with crippling fears that you didn’t get your affairs in order before frolicking on the beach.
These thoughts have probably entered into your mind at one time or another. And although the risks of dying while traveling are quite low, part of planning is to ease fears as a means of making your trip more enjoyable. You may not be able to get rid of fear, but basic estate planning, even at the last minute, can help ease fears and make things run smoothly if the unthinkable happens.
The basic estate plan includes the following four documents:
- General Durable Power of Attorney
- Health Care Durable Power of Attorney
- Revocable Living Trust
General Durable Power of Attorney
With this, you designate an “agent” who will make financial decisions in the event that you are unable to do so on your own. This person can be a spouse, family member, or friend. Without this document, nobody is authorized to make decisions on your behalf if you become incapacitated or go missing.
Health Care Durable Power of Attorney
This document designates an “agent” to make health care decisions if you are unable to do so on your own. With this, a person whom you trust will have the legal authority to make medical decisions on your behalf.
There are several functions of a Will, including the ability to designate someone to serve as guardian for your minor children. Without a Will, the court has the right to decide who will be the guardian of your children without input from you.
Additionally, your Will distributes assets that are held in your name such as bank accounts and real estate.
Even if you have a Will, any assets owned by you must go through probate (unless covered by beneficiary designations, etc.). This 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 costly and sometimes a major emotional battle.
Revocable Living Trust
If you setup a Revocable Living Trust, it will hold legal title to your assets. Subsequently, the assets do not go through the probate process upon your death, since the Trust owns the property, not you. Here’s a tip: before going on your trip, think about giving temporary medical authorization for health care treatment for your minor children to the person who is watching them.
Even if you wait until the last minute, you may be able to complete many of the basic estate planning steps, leaving the rest until you return from your trip. Consult with a qualified estate planning attorney to put your travel fears to rest. From there, you can sit back, relax, and enjoy the trip you have been dreaming of. Bon voyage!