Year 2020 brought with it uncertainty by showing us, through COVID-19, how unpredictable our life can be, and consequently, and that we should prepare for our future in advance.
Let’s start 2021 right, by preparing ahead. Here are some ideas:
- Enduring Power of Attorney (EPA): The EPA is a legal document with which we can plan our future for a time when we will not be capable of making decisions independently because we have lost our mental capacity to do so. This will enable us to continue to live as independently as possible according to our own choices, desires, and preferences, which we determine in advance. With an Enduring Power of Attorney, we can appoint someone who will carry out our wishes in the future, when we are considered, by law, to no longer have full cognitive control. It is important to understand that the Enduring Power of Attorney only becomes relevant when our mental health takes a turn for the worse, and we are considered to have lost mental capacity. Up until that point the EPA does not come into effect.
- A Medical Directive: When a person receives a medical assessment that he only has up to 6 months to live, the law permits him to request prevention of life-prolonging treatments, but he cannot refrain from certain medical care such as such as artificial feeding (tube), medication and treating additional diseases. If you sign on a form, as mentioned above, and submit it to the Ministry of Health, the doctor’s will act as per your submitted instructions, when you have lost your mental capacity and only have 6 months to live.
- Preparing a Will: A will is one of the most important estate planning documents you can have. It details to whom you would like to bequeath your assets after your death. You are entitled to bequeath your estate to anyone you want in a will. In the absence of one, your assets will be distributed according to the inheritance laws in Israel rather than according to your personal wishes. Although it is possible to write a will by yourself, it is advisable to seek legal advice in order to ensure that you are following all the legal formalities needed for your will to be valid and that it is written in a clear enough way in order to avoid family disputes in the future.
- Update your beneficiaries in your Kupot Gemel, Life insurance and pension plans: These accounts are outside of your Estate and are transferred according to their beneficiary designations. You last Will does not include them.
- Dual citizens (Israel and US) may want to consider getting advice regarding their estate planning, since the Biden’s taxation policy is looking to reduce the current US estate tax exemption threshold and to increase the rate of estate tax from its current level of 40%.
The beginning of the year is the perfect time to get your affairs in order. With a bit of preparation, you can put your mind at ease now and save your loved ones a lot of trouble later.
Goodbye 2020, and Hello 2021!