Because the future of the estate tax rates, the estate tax exemption amount, and the ‘step up’ basis is currently up in the air, the only planning that can be done now should be based on current rates and regulations. But that doesn’t mean to stop planning or maintaining your estate plan altogether – there are many important reasons you should take a closer look at your current estate plan now.

Over the next two weeks, I would like to cover the most common issues inside an existing estate plan that need to be addressed. I strongly encourage you to review your legal documents and discuss these issues with your Life Planner and attorney.

1. As you may have read in one of our past articles: “legal documents are not just for dying.” Some of the most essential documents are designed to protect you in the event that you become incapacitated: If incapacity were to occur, your designated medical power of attorney could make medical decisions for you, a successor trustee could manage the assets inside your living trust and a general or durable power of attorney could handle those assets outside your trust. By the way…did you know that your spouse cannot even obtain any right of power over any assets that are not in her/his name without a power of attorney or court order – which could take weeks or even months?

But what I want you to consider today is: according to your legal documents, how easy is it to determine whether or not you are incapacitated? In the past, many legal documents required written certifications from two licensed physicians to determine incapacity. A little known fact is that this can be very difficult to obtain and time consuming, when time may be crucial. One idea is to have your documents state that incapacity be determined by the attending physician and a loved one, or perhaps by an attending physician alone if you feel that your loved ones would be unable to make this type of decision.

2. On August 21, 1996, President Bill Clinton signed the Health Insurance Portability Accountability Act (HIPAA) into law. This act protects the medical privacy of any patient, which means that without an actual HIPAA authorization your designated medical power of attorney cannot obtain the medical information they may need to make informed medical decisions on your behalf.

3. As stated before, there are many pieces of legislation concerning estate planning that are still up in the air for upcoming years, making awareness of this next issue may be more critical than ever before: If you become incapacitated and your estate exceeds the applicable exclusion amount triggering federal estate tax, do your legal documents allow for someone to act on your behalf in order to implement the necessary planning tools and steps to reposition or reduce the size of your estate?

4. If you haven’t already, I encourage you to visit our online learning center at www.kennedy-financial.com and read “What Will the Holidays Be Like After You Are Gone?” It has been somewhat traditional to name a loved one or loved ones to act as trustees or successor trustees, and powers of attorney to handle financial matters. Yet the duties that must be performed by these appointments often take place while dealing with medical emergencies or complications, or they involve decisions beyond the appointee’s experience or abilities. I encourage you to speak with your Life Planner about utilizing an unrelated entity or individual that can either fill this role or share this role with a love one to ease the potential angst.

5. It is not uncommon to think your assets are protected if they are positioned in a living trust-but this simply isn’t true. The issue of asset protection is especially critical to business owners who are susceptible to lawsuits, but it should be addressed by anyone who has a substantial amount of assets. For example: if you or someone in your family is in a multi-car accident and becomes disabled or has killed another individual. After their family’s attorney performed a fact find; what could they sue you for? What assets do you have that they could get to? Think your insurance will cover that? Think again. Planning in order to address asset protection is unique to almost every situation so don’t overlook this one… and get help.

Estate planning is extremely complicated and it is impossible to touch on every related issue in just a few articles, much less go into enough detail for each family’s unique situation. Next week, we’ll focus on the most common issues that need to be addressed inside existing trust plans. If you question any part of your estate plan or have not had your estate plan reviewed by an attorney in the last 3 to 5 years, I strongly recommend you consult with your Life Planner and attorney.

VSR does not provide legal services.