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00:00 Speaker A
So, how do other documents like a will or living trust or beneficiaries, healthcare proxies, how do these play into this and how do they work together uh so that people don’t get tripped up?
00:23 Speaker B
That’s an important question. I think this is what causes part of the confusion is what document does what and do you need all of them?
00:35 Speaker B
Um, so let me clarify one point here. Emergency documents is not just for in the event of death. That that is absolutely important to consider, but an emergency is also, I’ve become disabled at work.
00:51 Speaker B
I had someone recently lose their vision. Now what? Are you prepared to have your documents in order and know who to call? Um, do you have insurances in place that you can go and collect on? So, not necessarily, um, death and disability.
01:03 Speaker B
Not necessarily something bad. It could just be that you’re traveling and you got delayed, um, abroad somewhere for an extended period of time, right?
01:13 Speaker B
So, it it’s not all death and disability. Sometimes it’s just because um you can’t access information yourself. Somebody else needs to know.
01:21 Speaker B
Uh with that in mind, some of the documents that cause confusion, your traditional legal documents, what we refer to as a state planning documents, the ones you’re going to go do with your attorney, that’s your will, that’s your power of attorney, healthcare proxy, sometimes there’s a trust.
01:43 Speaker B
The thing to take away from this is that each of those documents have a different job. So one doesn’t take place of another. You you can’t just have a will and call it a day, which I see this happen a lot.
01:58 Speaker B
Um, a power of attorney is more to give permission for someone to do financial decisions for you.
02:04 Speaker B
A healthcare proxy is related to someone providing uh health information. So it allows medical professionals to give someone information about you with permission in advance, but it’s just health-related on that one.
02:16 Speaker B
um where power of attorney is just financial. A will is sort of a catch all thing. If I don’t otherwise give instructions, a will is comes into play and it’s like, okay, nothing else had instructions, it goes here.
02:32 Speaker B
Um, one thing people don’t understand is that wills are a catch all, but they have to go in front of a judge to probate.
02:40 Speaker B
Many times that’s public information. So, if we can avoid using a will, that’s the best thing. But we can’t well, we shouldn’t avoid having a will.
02:51 Speaker B
It’s just we don’t want it to be our go-to, which a lot of people think, I have a will, I’m set. No. Um, beneficiaries, completely other thing. It’s not technically a document, it’s technically a designation on other accounts that you might have.
03:07 Speaker B
So we’re where most familiar with it, 401Ks, IRAs, um other investment accounts if you’re self-employed, a Sep IRA.
03:15 Speaker B
Anything like that that’s a retirement account almost always has an area to designate a beneficiary. So it’s important to do that and have a will, not one or the other. And it’s important to understand
03:26 Speaker B
if you have a beneficiary designation, that takes precedence. That’s going to be first. So,
03:35 Speaker B
one mistake I see all the time, I’ve changed my will, but they didn’t change the beneficiaries. Guess what?
03:45 Speaker B
Beneficiaries take the lead. So if you forgot to remove your ex-spouse from your beneficiaries and you’re now remarried,
03:54 Speaker B
Oh well, right? That money is going to go to the wrong person. So, remember, you have to do all of it.
03:58 Speaker B
Um, one important thing to remember too that I think causes some confusion. There are accounts that have a beneficiary equivalent that we can talk a little bit more in detail later if you’d like, but um it’s just not for retirement accounts.