When Martha Brown’s father died in December 2002 after a series of illnesses and hospitalizations, she and her sister began the complicated process of settling his estate.
Although her father had a will and had kept his daughters informed about his financial matters, there was a lot of work to be done, said Brown, a member of Beulah Baptist Church in Muscadine.
“Daddy had everything so in order,” Brown said. “He kept up with his financial matters very well, and he let us know exactly what he had, but there were several steps that had to be completed in order to settle the estate.” The process was emotionally difficult as well as time-consuming.
“We were grieving our father’s death, but at the same time, there was a lot of legal and financial work that needed to be taken care of immediately,” said Brown.
Preparing lessens pain
Each year, many Alabama Baptists find themselves facing similarly difficult situations. Many senior adults face worsening health and must make important decisions regarding health care and living arrangements. Adult children find themselves navigating the precarious terrain of allowing their ailing parents some autonomy while working to meet their many needs.
Considering these issues before they actually arise, however, can save both parents and their children a lot of worry and can ensure that personal desires concerning health care and estate settlement are carried out.
Barry Bledsoe, president of Baptist Foundation of Alabama, said having our legal and financial affairs in order is something everyone needs to do, regardless of age.
“Whether we’re 20 or 80, we all need to think out a plan for what will happen to our assets when we die or are unable to manage them ourselves,” Bledsoe said. “For elderly people with assets, Medicaid eligibility and planning is a huge issue. But everyone needs to have a plan for these situations.”
Bledsoe said there are three documents every adult should have: a durable power of attorney, an advanced health care directive and a will. These documents make an individual’s wishes known concerning the management and distribution of property, savings and other assets when the individual dies or becomes incapacitated.
A durable power of attorney and an advanced health care directive both outline an individual’s wishes in situations where the individual cannot make decisions.
“A durable power of attorney is a document that allows someone to act on your behalf when you are unable to act for yourself,” Bledsoe said, “and all husbands and wives of any age should have this document.”
Ideally, Bledsoe said, the person you name in this document should be someone you trust completely and who can exercise reasonably sound judgment in crisis situations because the durable power of attorney allows this individual to take care of business, financial and legal matters.
The advanced health care directive outlines a person’s desires for life-supporting intervention when all medical solutions have been exhausted and the chance for recovery is slim. “An advanced health care directive speaks for you when you cannot,” Bledsoe said.
Bledsoe advises people to give a copy of this document to their attending physician and to keep one at home. It is also a good idea to let close family members know your wishes as well, Bledsoe said.
While the power of attorney and the advanced health care directive provide protection and direction for the living, a will speaks for a person after his or her death. It is the final statement about how a person’s possessions and assets, or estate, should be distributed, Bledsoe said.
The term “estate” refers to everything a person owns, including property, retirement accounts, insurance policies and anything else that has monetary value. “Probate estate” refers to those things controlled by a will, which may or may not include the items mentioned above.
“When we die, everything we own goes to other people in one of three ways — by right of survivorship, by contract or by will,” Bledsoe said.
The right of survivorship means that anything owned jointly goes to the person named as joint owner, which is usually a spouse or a child. Houses and bank accounts are often passed in this way.
Retirement accounts and life insurance policies pass by contract because these accounts require that the owner specify a beneficiary. The beneficiary can be the account holder’s estate but only if it is in writing.
A will is a person’s last opportunity to distribute assets to family, friends or organizations. However, very few assets actually pass by will, Bledsoe said, because many assets are either jointly held or have a designated beneficiary.
“For example, if you co-own a home with your spouse, but you state in your will that the home should go to your children, your will is ineffective,” Bledsoe said. “Likewise, if you write in your will that you want an IRA to go to the Alabama Baptist Children’s Homes, but you have your son named as the beneficiary, by law the son gets the IRA.
“A will is the only opportunity we have to make charitable gifts if we choose to do that,” Bledsoe said, “but it has to be done correctly. The starting point of estate planning is knowing what your assets are and how they’re going to pass.”
Although all of the paperwork regarding estate planning can be done personally, lawyers, accountants and even bank officers can be very helpful in putting together a solid plan that will be easily enacted after a person’s death.
Alabama Baptists who are committed to leaving 10 percent of their estate to Alabama Baptist causes can get help from Baptist Foundation of Alabama as well. “We have a staff member who specifically works with senior adults to help them think out their plans,” Bledsoe said.
Facing our own mortality can be difficult, but careful planning can ensure that the assets God has given us stewardship over continue to work for Him long after we are gone.
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