With the New Year upon us, it is a perfect time to gauge your legal health by considering the following legal checklist:
- Do you have a Will? If so, have you reviewed your Will lately to be certain that its terms are current?
- Do you have a Living Will and Medical Directive so that your loved ones are aware of your intentions with respect to medical treatment and end of life decisions?
- Do you have a financial Power of Attorney document which will allow your financial affairs to be conducted if you are temporarily or permanently incapacitated?
- If you have minor children, does your Will indicate who is to receive custody of your children if you die? Also, does your Will control how money is to pass to your children so that they don’t foolishly waste their inheritance?
- Have you prepaid your funeral? This is especially important if your net worth is less than $500,000, as a nursing home stay may otherwise deplete your assets leaving your funeral unpaid. If this occurs, your loved ones will be burdened with paying for your funeral.
- Have you recently reviewed the beneficiary designations on any life insurance policies you possess?
- Have you recently reviewed the beneficiary designations on any retirement plans you possess?
- If a spouse is likely to enter a nursing home, have you taken appropriate steps to protect spousal assets so that they are not entirely consumed by nursing home costs?
- Have you included a letter of instruction with your other important documents so that your loved ones can understand your affairs in the event of your death or incapacity? This letter of instruction educates your loved ones as to the identity of your current financial accounts, life insurance policies, retirement accounts, funeral plans, etc.
- If you have selected limited tort coverage on your auto insurance policy, strongly consider switching to full tort coverage. If you are hurt in an auto accident due to the fault of someone else, limited tort coverage could prohibit you from receiving thousands of dollars of compensation.
- Do you have adequate levels of liability coverage on your auto and homeowners insurance policies? If you accidentally cause injury to someone else, these coverages should be high enough to fully compensate the injured person. This will protect against an injured person wanting to pursue your personal assets.
- Do you have adequate auto uninsured and underinsured coverages? If you are injured in an auto accident through the fault of another individual, these coverages will pay you for your uninsured or underinsured losses. It is advisable to have least $100,000 of these types of coverage.
- If you have worsening medical issues, and are not yet at Social Security retirement age, are you educating yourself regarding what you must demonstrate to be found eligible for Social Security disability benefits?
- Lastly, with the unfortunate frequency of divorce, if you are considering marriage, have you considered a prenuptial agreement? A prenuptial agreement greatly simplifies a divorce if your marriage fails, and can thereby save you thousands of dollars.
With this legal checklist in mind, I wish everyone an enjoyable New Year.
Edward J. Coyle is an attorney with the Buzgon Davis Law Offices. His column appears the first Tuesday of each month.