As you move through the estate planning process, you may start to wonder who of your loved ones should know about your estate planning documents or how much to tell them. There is no perfect answer because everybody is different, and a family may have different dynamics. However, there are some people you should tell in order to prepare them for potential responsibilities they may have when the time comes.
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Discussing end-of-life scenarios with family members and friends can be difficult, but you will want these people to know who’s in charge to avoid any conflict and give peace of mind.
Who Needs To Know About My Estate Planning Documents?
There are certain situations in which you want people to know about your estate planning documents.
Agent Under a Financial Power of Attorney
First, your agent under your financial power of attorney should know about your estate planning documents and advise them that you have named them to serve in the position. This is especially important if you create a durable power of attorney because they act for you if you become incapacitated. You should know your state laws regarding incapacity and advise your power of attorney (POA) when they may have to step into the position.
Your power of attorney becomes a fiduciary, meaning they will be able to access your bank accounts and be in charge of your finances when you cannot do so. In an emergency, your agent should know they will have these responsibilities to ensure your financial affairs are handled, and your family members do not need to go to court to get a guardian or conservator for you.
At this time, you should also inform your agent about your financial situation and give them information or where to look if they have to make financial decisions and transactions on your behalf. For example, you may want them to know about your social security benefits, retirement plans or pensions, IRAs or other retirement accounts, life insurance policies, annuities, etc.
Agent Under a Health Care Directive
Second, your health care proxy or health care power of attorney whom you named with your health care directive, should know they will have to make medical decisions if you become incapacitated. Like the durable power of attorney, this document can come into effect in the event of an accident and have to make health care decisions for you, meaning your family will not have time to process what has happened to you. By informing your agent of their responsibilities, you can ensure that you have someone you trust following the medical care directions you gave in your advance health care directives and living will. Your health care agent and financial power of attorney agent will likely need to work together to determine the best course of action if you need long-term care.
Personal Representative
Upon your death, your financial and medical powers of attorney will no longer be in effect. The handling of your estate is now up to the person you named as your personal representative in your last will and testament. The personal representative guides your estate through the probate process and works with the probate court to settle any outstanding debts, distribute personal property or real estate according to the beneficiary designations you made, and inform your beneficiaries how the probate process is advancing.
Your personal representative is among the most important people in your estate plan. They are the ones you’ve entrusted to care for things when you are gone. Not only will they be grieving, but they also have additional responsibilities that other loved ones will not. As a result, letting your personal representative know ahead of your death that they have this responsibility can prepare them for when it happens. And your other loved ones will know who to consult about your estate.
When talking to your personal representative you may want to give them a list of your assets and liabilities. It will help them with your estate administration if they know where to locate your accounts, safe deposit box, or cryptocurrency assets.
Guardians
If you have minor children, or adult children with special needs, you should inform the person(s) you have named as their guardian that you have chosen them to take care of your children. Taking on additional children can be financially and emotionally challenging. Giving the potential guardians a warning will help ease the transition and prepare them in case something happens to you.
Trustees
If you have done advanced financial planning and created either a revocable or irrevocable trust, you should advise your named successor trustees of their responsibilities. Like an agent under a financial power of attorney and personal representative, being a trustee comes with fiduciary responsibilities. Depending on how you have structured your trust, your trustee may be managing your estate finances for an extended period. By letting your successor trustees know they will eventually take over for you upon your passing, they will be able to prepare accordingly.
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Every Situation Is Different
Ultimately, everybody has a different dynamic that they and their family operate under. When dealing with legal documents, some people may need to be more emotionally or mentally prepared to take on the responsibilities you entrust them with. By communicating with your named representatives, you can ensure that they are ready to take on these responsibilities.
If you have not created an estate plan or need to make adjustments to your estate plan following a conversation with your representatives, you can use FindLaw’s do-it-yourself estate planning forms to get started. If you need additional assistance, you should reach out to a local estate planning attorney to help you.
