Written by Gary Foreman
From his column Life Stewardship
As believers we all want to leave a good legacy to those who follow us. Inheritances are a prominent part of Scripture—whether it’s Jacob, Abraham, or even Jesus—what we leave behind is important.
Naturally, we want to leave a lasting spiritual legacy, but our physical legacy is also critical. Failure to plan for our death or disability can create a legal mess for our loved ones—a mess that might affect how we are remembered.
As believers, we want and expect our word to be good enough. Unfortunately that isn’t sufficient in a world filled with banks, insurance companies, and lawyers. More often, a legal document is required. “Render unto Caesar...” That’s why it’s important to take care of legal matters in advance.
Here are the most common items that should be considered when caring for our legal, financial legacy to others.
Wills
The first document most people think of is the will, or as it’s often known “last will and testament.” “Testament” in Greek is diatheke, meaning a disposition, contract, or covenant. The practice of stating who will receive our personal assets after death goes back to biblical times, and so do contested wills. Too bad Isaac didn’t have a written will. It might have saved Jacob and Esau from a lot of grief.
A properly drawn will can prevent disagreements among heirs and make disposing of property much easier. It can also include who we want to serve as a guardian to any minor children.
Trusts
A trust is a legal arrangement that transfers property to a “trustee” for management that will benefit certain beneficiaries. In simple terms, it is a document that grants another person the right to act on our behalf regarding specific property.
Trusts are divided into two types: revocable, that can be terminated, and irrevocable, which cannot. The most common is a revocable living trust.
Trusts serve various purposes. They can protect assets from taxes or creditors, provide for disabled heirs, avoid probate, provide for asset management, and serve other purposes. Not everyone needs a trust, but don’t be misled, trusts aren’t just for the wealthy.
Power of Attorney (POA)
A power of attorney is a document that grants another person the right to act on our behalf. It can be for financial or medical purposes, for a specific time or event, or it can be open-ended.
A POA is often used when we want to put someone of our choosing in a position to make decisions for us if we should be unavailable or incapable of doing so. If we don’t have a POA and someone else has to make decisions in our behalf, a legal process is required. This can be time consuming and unnecessarily expensive.
Healthcare Directives
A health care proxy or health care power of attorney is a document which allows us to appoint one or more individuals to make health care decisions for us if we are unable to make our wishes known due to disability. It covers any and all decisions about health care and medical decision-making from routine matters to end of life choices.
Get Professional Help
Often, we can save money by doing it ourselves. This is not one of those times. There’s a reason they call it a “Last will and testament.” Once we’re dead or incapacitated, we cannot amend or revoke it. Unfortunately, an error won’t be discovered until the document is needed. At that point, correcting any problems may be impossible or expensive and time consuming to fix.
Each state has specific requirements for these documents. Find an attorney who specializes in estate planning in your state.
Other Key Steps
There are other non-legal steps that every adult should take. Most will prevent survivors from scratching their heads wondering what we would do or where to find something important. Here are important lists to create and maintain:
- Accounts: banks, crypto, investments, IRA, 401k, 403(b), pension, life insurance, and health insurance
- Important contacts: lawyer, doctors, financial advisor, pastor, relatives, and close friends
- Passwords and access codes for electronic accounts: Facebook, email, etc.
- Important ID numbers: Social Security, military, etc.
- Plans for your memorial service and interment
Also, it is very important to make sure our spouse or other relative, power of attorney, lawyer, executor, or some other trusted person knows where we keep the items mentioned above.
As believers we know death is not the end, but we should not ignore it. One of the worst things we can do is to put our loved ones in a position of needing to take action for us or our estate without the knowledge of what we want and the legal means to do so, especially at a time when they are already dealing with sorrow and loss. Taking deliberate actions in advance will help to assure our legacy is a good one.
Gary Foreman is an assistant pastor, author, former financial planner, and founder of TheDollarStretcher.com and after50finances.com.