Tag: wealth advisors

I live life by the mantra “every day is a holiday,” as I focus on living life to the fullest. This includes celebrating the lives of loved ones, those still with us and those who have passed on.

When discussing ways to ensure my loved ones and those of my clients are cared for, I often bring up estate planning. Many find this important topic to be morbid; however, I always reinforce the fact that estate planning, when done correctly, can be a very positive experience and not the stereotypical doom and gloom. It is not a focus on death, but rather a continuation of care and benevolence for those whom you love and provide for.

When you think about what makes life so great — and the reason why you have worked so hard — I have found, for most, that answer often is family and community. Both seem to be a sort of inspiration to those who strive to make a difference in the world and within their families for generations to come.

In taking proactive steps, you can enable family to continue living a lifestyle to which you have grown them accustomed. And, at same time, you can help reduce family conflict in the event you become ill or die.

In short, when the unthinkable does take place, you need to have your ducks in a row. Since this is one area of your life you can control, estate planning can help you focus on areas of your life that are controllable. Proper estate planning can be viewed as a selfless act, making all your health and financial wishes known, and potentially eliminating familial conflict.

If I had a dollar for every time I heard someone say they are “all set” in regard to estate planning, retirement would have happened for me at 25 years old.

A scary but very real fact is if you do not direct where your assets will go upon your death, the state will be more than happy to do that for you. Estate planning, by design (vs. default), makes life much easier for you and loved ones. Without having your affairs in order, it’s not uncommon to see families divided or even torn apart after a loved one has become ill or passes away.

Four planning tools

There are four items to consider from a wealth-management perspective to be proactive vs. reactive in estate planning:

1. Power of Attorney
2. Healthcare Proxy
3. Will
4. Living Will

It is difficult to say which one of these estate-planning items is most important (heck, if you have four kids, you don’t want to say you have a favorite, right?), but you can tackle them one at a time, so as to not get overwhelmed. A good estate planning attorney can help coordinate and execute all four planning tools.

Since this column is the first of two. I will focus here on power of attorney and health care proxy. In October’s column I will focus on the will and living will.

The importance of planning

When I was 21 years old, my mother was diagnosed with breast cancer and chose me to be her power of attorney and healthcare proxy. Sure, I was working in the financial field, but had only just begun my career.

I had to put my new skills into action fast — learning out of the gate what it was like to plan during a time of crisis.

For that reason, I recommend you not wait until a time of crisis to navigate the waters of estate planning. You can surely get things started yourself, using online templates. However, at some point, you should engage with a legal advisor for formalizing all documents.

So, when you look at your network of family and loved ones, WHO should you choose to be your power of attorney and your health care proxy?

First off, keep in mind these could be TWO different people and could be a family member or a friend.

Power of attorney

I joke with my clients that this person is more inclined to be “left brained.” In choosing a power of attorney (POA), make sure it is someone you trust, who understands money, budgeting, how to pay bills, and maybe even has a great credit score because, in doing this, you are giving someone the power to conduct financial affairs on your behalf.

Do not just pick a child or parent simply because they are family; make sure this person could pull their weight if they had to act on your behalf. This POA title is very important and should be taken very seriously by whomever you select.

When I was appointed as my mother’s durable power of attorney, I immediately obtained the powers and rights to conduct all her financial affairs, as though my signature was as good as hers.

Executing a proper power of attorney is step one; step two involves making sure the institutions with which your loved one conducts business knows who you have been elected as POA and the document exists. In my mother’s case, these businesses included her place of employment, credit union, banks, mortgage company, car company, and more.

Health care proxy

I also joke with my clients that your health care proxy is more “right brained.” Choose someone you trust and with whom you can connect emotionally — someone who “gets you,” can feel for you, yet still carry out your wishes.

For instance, my mother did not want to be resuscitated if she became unresponsive or died. Being only 21 years old at the time, I questioned her decision, but soon realized that it was selfish of me to not respect her wishes should it come to that decision needing to be made.

I needed to put myself in her shoes, simply shut up, and accept what she wanted. Doing this allowed me to focus on and appreciate the time I had left with her. As her health care proxy, it was my responsibility to help her live her remaining months to the fullest, with dignity an according to her wishes.

In summary, it is important to make these decisions, and have conversations with the people you’ve appointed as your power of attorney or health care proxy soon after. Sometimes those appointed are learning of it for the first time when a crisis arises. So, make your elections wisely and be sure to inform those you appoint.

Peace of mind for you is knowing that you have appointed the “right” people to assist you during your time of need. Peace of mind for your family is their knowing you planned this out by design rather than by default. Be proactive!

Jarrett Felton is founder and managing director of Rochester-based Invessent Wealth Management.