How to Get Your Estate Planning in Order Before International Travel
When most people plan a trip overseas, whether, for work or pleasure, their checklist usually involves packing the proper clothing and necessities and making sure they pick up the dry cleaning before heading to the airport.
What most people don't realize, however, is that aside from creating the perfect travel itinerary and choosing the best hotels, it's also essential to ensure your affairs are in order before taking off.
In this article, we will talk about the importance of estate planning before travel and how to get it done so you can enjoy your vacation with peace of mind.
Keep reading to learn more.
The Importance of Estate Planning Before International Travel
There are plenty of misconceptions about estate planning out there. It's typically thought of as something that only the wealthy or elderly have to do or that it's all about reducing any potential tax burdens. Therefore, creating wills or trusts never really comes to mind before making international travel plans.
The truth is, estate planning is about planning for your and your family's future, not just for what happens after you pass on from natural causes one day.
To give you some perspective on the importance of having your affairs in order, it should be noted that if you were to pass on without an estate plan in place, all of your assets would become a matter of the state. Therefore, they would have to pass through the Alabama Intestate Succession laws. This means your heirs — as in your spouse and children — could lose out on essential assets and shoulder the financial burden of sorting out your estate.
Additionally, if you become mentally incapacitated without an estate plan or at least a power of attorney, your medical decisions and other affairs will be left up to someone else to manage. Depending on the situation, this person usually ends up being a spouse, business partner, or someone appointed by the state. Unfortunately, people don't always have your best interests in mind. Or, they simply don't understand your vision or future plans — which is why it's so important to make sure all your bases are covered.
Why You Need a Power of Attorney Before International Travel
The most crucial component of your estate planning for a future that you're still a part of is having a designated durable power of attorney (POA).
A durable power of attorney is essentially a document that authorizes someone of your choosing to handle your financial and business affairs for you if you become ill or mentally incapacitated and are unable to do so yourself. Their power and decision-making are limited to what you allow, provided in the document. You can have multiple POAs for different aspects of your life.
This is actually something that your Huntsville attorney would strongly advise — especially when it comes to having someone manage your business versus working on your medical decisions. Remember that whoever you choose to manage your affairs or make your medical decisions should be someone you can trust to do so with your best interests in mind.
Of course, suppose you've already created an estate plan with designated POAs for various affairs. In that case, you may be wondering how these documents will come into play should something happen during your travels.
In this case, you can create a new power of attorney known as a "special power of attorney" to appoint someone to manage your affairs in case of an unexpected emergency in your absence. For example, suppose there's an accident while you're thousands of miles away or overseas. In that case, an extraordinary power of attorney can take care of any affairs involving your property, file a report with your insurance company on your behalf, and deal with any financial or personal affairs that would typically require you to handle them in person.
You can also authorize an extraordinary power of attorney to make business-related decisions on your behalf and handle important transactions while you're away.
Here are a few other things you should know about an extraordinary power of attorney before appointing one before international travel:
They're only used for a limited amount of time
One of the benefits of appointing an extraordinary power of attorney is that they're only used for a limited time, such as the duration of your international travel plans.
Technically speaking, you aren't required to specify an end date for your unique power of attorney. However, suppose you don't select an end date. In that case, the document will be considered adequate until your death — which can end up causing a dispute if it overlaps with another power of attorney should you become mentally incapacitated.
Therefore, when creating an extraordinary power of attorney, you'll want to ensure that you limit the duration of its power. For example, suppose you're using a remarkable power of attorney for international travel. In that case, you'll want to use them for at least during your trip. It also makes sense to extend the end date until several days or even several weeks after your expected return date. This will ensure that your appointed agent will have uninterrupted authority should you get unexpectedly delayed coming home.
You'll also want to consider making your extraordinary power of attorney "durable." If you become incapacitated during your travels or upon arriving home, your special power of attorney will continue to have authority until the proposed end date if included. All non-durable powers of attorney typically lose control in the event of incapacitation.
They're no longer effective if you die
Any authority granted to a special power of attorney ceases when you pass away. This holds true even for a durable special power of attorney, as they're only permitted to continue managing your affairs in the event of incapacitation, not death.
Your estate and the affairs that would need to be managed after your death would have to be left to the executor of your will and the trustees of any trusts you create.
A special power of attorney's authority can be revoked internationally
You may decide that you want to revoke your special power of attorney agent's authority while still overseas. This can be done simply by formally revoking the document in writing.
This is known as a Revocation of Power of Attorney document. It should specify that you want to revoke your agent's authority. It must also be signed by both parties and sent to any financial institutions or other organizations to which your special power of attorney has been granted access.
In Alabama, you do not need to have your revocation document notarized. You should, however, legally destroy the original special power of attorney document to prove your intentions of revocation.
Should you need to revoke your special power of attorney or any POA, you'll want to consult with your Huntsville attorney first to ensure you take the proper steps to make the revocation official.
How to Get Your Estate in Order Before International Travel
Even if you already have an estate plan in place, your upcoming travel plans can serve as a great reminder to review your current plans and update them where necessary. Of course, it may seem tedious or excessive to do before a trip. Still, it's imperative if you've recently acquired new assets, have lost loved ones, parted ways with a business partner, or have children.
Consider this your pre-travel estate planning checklist:
1. Talk to your attorney
The first thing you'll want to do is make plans to review or prepare your estate plan with your Huntsville attorney. Your attorney can help you keep the process quick and simple by guiding you in the right direction when creating a will, trusts, directives, and answering all of your questions.
They'll also ensure that your documents are officially updated and that copies are sent to the appropriate parties to make any changes.
When reviewing an existing estate plan, you'll want to include essential revisions such as births, deaths, marriages, divorces, remarriage, etc. This is especially important if you want to exclude an ex-spouse from your last will or if any appointees for your will, trusts, directives, etc., can no longer serve.
2. Review or create plans for any minor children
If you have any minor children to care for and have not yet named a willing and able guardian for them, now is the time to do so. Otherwise, guardianship will be appointed by your home county's probate court, which means your children could end up in the foster care system if the court cannot find a suitable family member to take care of them.
Suppose you already have a guardian named in your will. In that case, you'll want to review your relationship with them while also considering appointing a secondary guardian should something unexpected happen to the first.
Lastly, you'll want to set up trusts to protect your children financially to ensure they have everything they need for their future.
3. Review or create your directives
Directives are documents that name your healthcare power of attorney, durable power of attorney, special power of attorney, Health Insurance Portability and Accountability Act (HIPAA) authorization, your last will, and any living trusts.
These documents are crucial as they designate the following, respectively:
Who will have the legal authority to make healthcare decisions if you cannot make them yourself? (Of course, they will also be under your doctors and medical team).
Who will have the legal authority to make financial decisions, business decisions, and any other decisions regarding your affairs, depending on how much authority you give them, should you become mentally incapacitated and unable to make these decisions.
Who will have the legal authority to temporarily carry out certain business decisions, financial decisions, etc., for a limited time?
The written consent for healthcare providers to discuss your healthcare information with others, including your family members.
Your last wishes regarding life support treatment and duration, your funeral arrangements, and how you want the rest of your estate handled outside of any trusts.
Who will receive what assets and when?
4. Review and update your insurance policies
Review your life insurance policy to ensure that the coverage within your policy is still adequate for your family's current and future needs.
You may want to also consider getting long-term care insurance to help pay for any potential costs of long-term care. In addition, long-term care insurance can help protect your assets and family if care is needed by your spouse or children while you're incapacitated or after you've passed.
5. Organize your accounts, files, and other documents
Whether you have a traditional filing cabinet or everything saved on your computer — or both — you'll want to take the time to ensure everything is in order. That means organizing your accounts, files, and documents and creating a list of the usernames and passwords of your accounts and the locations of all your important documents.
Be sure to print a hard copy and keep it somewhere safe with your last will so that your executor and trustees can easily find it.
6. Talk to any critical parties about your plans
Before leaving, you'll want to ensure that the right people know you've updated your estate plans, what they are, and where they can access the important documents if necessary. You can choose to leave your estate planning documents with your Huntsville attorney or in a safe in your home.
You'll also want to talk to your children about your estate plans to ensure that they know the general terms of what you have planned. This will help them avoid extra stress about their future should something go wrong. It's also a good idea to talk to them about managing their own affairs to guarantee the best future possible if you're not there to help them as they grow up.
Keep in mind that estate planning is an ongoing process, not a one-and-done type of event. Life and circumstances can change at any moment. Therefore, your upcoming travel plans should serve as a reminder to be prepared.
We can help give you peace of mind before your next vacation regarding estate planning in Huntsville, AL. Get in touch with us today to schedule a meeting with Sarah S. Shepard or another experienced Huntsville attorney to review your plans.