Katie Collins, a Practice Integration Advisor with Buckingham Strategic Wealth, helps dentists order their financial lives and reach financial peace of mind so they can better focus on what truly brings them joy.
Planning for death or disability isn’t something most clients eagerly check off their to-do list. My husband and I have been married for almost three years and still have yet to put together our estate plan. Ever hear the saying, “The shoemaker’s children go barefoot”? Your estate plan is an integral part of your overall wealth management plan. You’ve spent time accumulating wealth. You’ve built a small business. Perhaps you have young children. You want to make sure your wealth and family are protected.
We have found that estate planning can be the one element of the overall financial plan that most holds up a family. Just a few of the many questions you must ask yourself are: Who will be the guardians for our children? How do we want our assets divided? What are my health-care wishes should I become incapacitated? What do we do with the dental practice? Who do we trust enough to be our power attorney?
While all of these are daunting topics to think about, let’s spend time talking about the power of attorney. The majority of people are familiar with the general power of attorney. It allows you to designate an individual to exercise control over your finances once you sign documents. A springing power of attorney can be another option you may decide to utilize in your estate plan. A springing power of attorney is a conditional power of attorney and only takes effect if you become incapacitated.
So why might someone choose to utilize a springing power of attorney in their estate plan? The security of only handing off the power that comes with it in the event you are incapacitated may seem comforting. If you take trips to other countries throughout the year, establishing a springing power of attorney might make sense to protect yourself in the event something happens while you are abroad. In addition, it could make sense to identify a specific person who would be responsible for your dental practice in the event of incapacity.
However, there can be some drawbacks to using a springing power of attorney. For example, there could be a delay in establishing incapacity, which could disrupt the handling of your finances or your business. HIPAA privacy issues might pop up in this instance. Your doctors may not be able to share pertinent medical information with your agent because they would be violating HIPAA rules.
Should you incorporate a springing power of attorney into your estate plan? It might be a good topic to bring up with your attorney to determine whether one would benefit you and your family.
In our next post, my colleague, Tom Bodin, will discuss a living will. As always, if there are specific topics you’d like us to tackle in Finance32, please send us an email!