Planning for the unexpected can be a daunting exercise which many of us put off in hope of avoiding the need to do so. The following are three common scenarios which may be avoided by taking the suggested steps.
Health Care Powers
A family with an adult child (18 years of age or older) attending college should be aware that the University Medical Center cannot release an adult child’s medical condition to a parent if the child is sick or injured while at school. As such, parents should have college-aged children sign a Health Care Power of Attorney granting them the right to access their child’s medical information. Such a form can be obtained from an attorney or from the University, as well as other sources.
Durable Power of Attorney
If a spouse, parent or child is unexpectedly rendered incompetent by a health condition or accident, the family may be required to apply to the local court to be appointed as a guardian of that person during the period of incompetence. To avoid this costly and upsetting step, each individual adult should grant a trusted relative or friend the power to deal with his or her assets such as bank accounts, automobile titles, insurance companies and the like. This can be done by signing a Durable Power of Attorney designating one or more persons who may act on behalf of the person, thereby avoiding court involvement during incompetence.
Shares in US Companies Held at Death
Many people throughout the world invest in US Company shares. Any such person, regardless of citizenship or place of residence, upon death, will be subjected to US estate tax on the shares held. Except for those investors whose estates can take advantage of one of the few estate tax treaties with the US, the estate tax at death will apply to the US shares and other US assets which exceed US$60,000 in value on the date of death. The tax rate can be as high as 40% of the value. Therefore, any person investing in shares in US companies should consult with a US tax advisor to determine the exposure with the goal of legally reducing or avoiding the application of this tax.
John Ledyard Campbell is a partner at Kohnen & Patton LLP practicing U.S. and international estate planning and probate law. For more information regarding your estate planning needs, contact him at firstname.lastname@example.org or call (513) 381-0656.