Estate PlanninG

5 Estate Planning Issues to Address Before You Leave on Vacation

Leaving for vacation? Before you go, here are five things you may want to address to protect yourself and your loved ones in case the worst happens while you're gone.

1. Do you have a foundational estate plan, and has it been reviewed?

An estate plan is a set of instructions memorialized in legal documents that explain to your trusted decision-makers and loved ones your wishes about your care, the care of any dependents, and how to handle your money and property.

Last will and testament

Depending on your unique situation and needs, you may have a last will and testament (also known as a will) as the foundation of your estate plan. This document allows you to name someone to wind up your affairs (i.e., gather your belongings for safekeeping, create a list of everything you own, pay your outstanding bills and taxes, and give the remainder to the individuals and charities you have chosen). You can also name a guardian for your minor children if you have any. Because a will takes effect only at your death, using a will to outline your wishes will likely still require your loved ones to go through the probate process (a court process that can be expensive, time-consuming, and public) to carry them out.

Revocable living trust

On the other hand, you might have a revocable living trust as the basis of your estate plan. A revocable living trust is an entity that owns your accounts and property. For your trust to own your accounts and property, they will either be retitled in the name of your trust (instead of in your sole name), or the trust will be named as the beneficiary that will receive money and property at your death. Your trust instrument provides your chosen decision-maker (trustee) instructions on how to operate the trust. In the beginning, you can serve as the trustee of your trust, which means that you can still control what happens to the accounts and property owned by the trust.

You can also continue to benefit from the accounts and property because you are a trust beneficiary. If you can't manage the trust (i.e., you become incapacitated or die), someone you've chosen ahead of time can step in as trustee and continue managing the trust for your benefit (if you are still living) or for your chosen beneficiaries (at your death), without court involvement. Because the trust will be the owner or beneficiary of almost everything, for probate purposes, you will die owning nothing. If you own nothing in your sole name, there is nothing that has to be transferred through the probate process. A trust becomes effective as soon as you sign the trust agreement.

Review your documents

Because life circumstances often change, it's essential that you periodically review your existing estate planning documents. Do they still reflect your wishes? Have any significant changes in your life that might necessitate another look at your documents?

If you have a revocable living trust as part of your estate plan, it's crucial that any accounts or property that are supposed to be owned by the trust have been appropriately retitled. Also, if there are any accounts or property that should name the trust as a beneficiary, make sure the appropriate paperwork has been completed.

2. Who will manage your financial affairs if you're no longer able to?

If you're out of the country, handling your personal financial matters will likely be more challenging (e.g., writing a check for rent, following up on an insurance claim, etc.). However, just because you cannot do these things does not mean that no one else can do them for you.

A durable financial power of attorney enables you to name a trusted decision-maker to handle your financial matters. When crafting a financial power of attorney, your estate planning attorney will discuss when you want the document to be effective. In some states, you can choose to give your trusted decision-maker the authority to act on your behalf immediately or only upon the occurrence of an event (which is usually a determination that you are no longer able to manage your own affairs). In the case of international travel, consider giving the power immediately so that your chosen decision-maker can respond as soon as there is an issue, regardless of whether you can decide for yourself. In addition, you can tailor how much authority you give your chosen decision maker in the financial power of attorney. You may want to limit the person's authority to actions related to a specific transaction, such as a real estate closing, or you may want to allow that person to carry out almost anything you could do for yourself. This is a personal decision based on your unique circumstances.

3. How will you take care of your health when you're away?

Even the healthiest person can develop a health issue while traveling. This is why you must choose a trusted decision-maker to make medical decisions. A standard estate plan typically includes a medical power of attorney that appoints a person to make medical decisions, a living will or advance directive document that gives instructions for your end-of-life wishes, and a HIPAA authorization form that grants named individuals the right to obtain your private healthcare information. These forms can be state-specific and may not be accepted in another country, so if you're traveling internationally and will be staying in a particular country for an extended period, it may be beneficial to look into how to name a medical decision-maker under your vacationing country's laws.

Also, consider whether your health insurance will be accepted overseas because sometimes health insurance is only accepted in the United States. If this is the case, you'll want to look for a short-term policy that will cover you while traveling.

4. Do you have travel and life insurance?

In addition to health insurance, two other types of insurance may be necessary for protecting yourself while traveling. First is travel insurance. International travel can be more complicated than domestic travel, and having additional insurance can help you navigate the curve balls life can sometimes throw at you. Depending on the cost of your trip and the items you are taking, getting travel insurance may save you money in an emergency.

Life insurance is also vital to have and review. Make sure to fill out your beneficiary designations correctly so your loved ones will receive what you want in the way you want. It is also important to review the policy terms to see whether any activities you wish to engage in while on vacation will void your coverage. Sometimes insurance companies will only pay out if the insured has been involved in extreme activities like bungee jumping, skydiving, and scuba diving. If you're in an accident while engaged in one of these activities, your loved ones may receive nothing.

5. What arrangements have you made for your children?

If your minor children travel with you, they will likely require a passport. Remember that a passport for a child needs to be renewed more frequently than a passport for an adult. Also, some countries may require proof that you are the children's parent or legal guardian. With the threat of international kidnappings and human trafficking, customs officers want to ensure that children remain safe when traveling internationally.

If your minor children stay with someone while you're traveling, you must have the proper documentation so the chosen adult can fully care for your children. Many states have a document that will allow you to designate someone to temporarily make medical and other decisions on your minor children's behalf. The document's name and effective duration can vary by state, but having this document can ensure that whomever you leave your child with will be able to fully care for your children in your absence.

Additionally, whether you are traveling or not, you must have a last will and testament that designates someone to care for your minor children if you and their other legal parent die or cannot care for them. Some states allow you to name someone to care for your minor children if you die or are otherwise unable to care for them in a document other than a last will and testament, such as a durable power of attorney or nomination of guardian. Although these documents will not avoid court involvement, they will help ensure your wishes are honored.

We know that preparing for international travel has a lot of moving parts. We offer assistance to ensure that you protect yourself and those you love during your trip. Give us a call to schedule an appointment before you go. Call Santaella Legal Group, serving all of California, at (925) 831-4840.