When an individual believes that he or she is close to death, it may be a good idea to give his or her estate plan one final review. It may also be time to transfer assets or fund any trusts that may have been setup in such a plan. Most importantly, it may be worthwhile to make sure that someone has the power of attorney to act on an individual’s behalf if he or she becomes incapacitated.
When a person has the power of attorney to act on behalf of someone who is ill, it may be easier to make decisions without obtaining a letter from a doctor or going through other legal steps. In addition to funding a revocable trust, individuals may want to make sure that all beneficiary designations are correct and that they reflect his or her wishes.
One overlooked aspect of estate planning is income in respect of a decedent (IRD). For instance, if an individual earns wages after passing on or receives distributions for a retirement account, that money could be subject to income and estate taxes. To prevent double taxation, it may be a good idea to transfer assets to a spouse. In some cases, beneficiaries may be allowed to stretch benefits over their lifetimes.
To decrease the odds of legal battles and infighting among family members and others, it may be a good idea to engage in advance estate planning. An attorney may be able to help an individual create a will or trust to give him or her more control over where his or her assets go after death. Legal counsel may also be able to review existing documents or help create durable powers of attorney to preserve assets while alive.