Column: Estate planning steps to take when rejoining the workforce
Local attorney Teresa J. Rhyne.
By Teresa J. Rhyne, Esq.
Have your legal documents kept up with your life changes?
– A general rule for how often you should review your will, trust, powers of attorney, and health care directive, is every three to five years. But that’s not the only time. Your estate planning documents should reflect your life circumstances. Thus, when your circumstances change, it’s time to look at those documents again.
If you’ve been out of the workforce and are now returning, it’s time to review your estate planning documents and consider a few other items as well.
Beneficiary Designations
If your new employer offers a retirement plan and/or life insurance, you’ll be asked to complete forms to designate a beneficiary. Make sure you coordinate this decision with your estate plan. If you have minor children, you may need to discuss with your advisors whether you want to name a trust as the beneficiary so that a trustee can manage the assets for your children. If you have a spouse who is not the parent of your children, you will need to discuss with your advisor how best to handle the beneficiary designation so that you take care of the parties you mean to be providing for.
Health care directive for minors
If your children will be in daycare or you have a friend or family member watching them while you’re at work, you’ll want to be certain you have a health care directive for minor children in place. As the parent, you’ve been making health care decisions for your minor child all along. You make appointments, have discussions with health care providers, decide on vaccines, and approve (or disapprove) medical procedures. But what if you’re not available? If you’re incapacitated, whether temporarily or permanently, or unreachable, someone else will need to be the health care agent for your children. You can name that person—or better yet persons—in a health care directive for minor children. It also helps to list the names and contact information for their health care providers. Perhaps you have such a document, but did you name the person who will now be the caregiver for your child as you return to work? Check those documents.
Your own power of attorney and health care directive
Whether working or not, every adult should have a power of attorney document in place that designates a party to act on your behalf if you should lose capacity. In addition, you should have a Health Care Directive designating a party to make health care decisions for you if you are not able. Make sure these documents are current and reflect the choices you’d make today. Your risk of becoming incapacitated isn’t necessarily higher because you’ve returned to work (well, depending on your job), but since you’re starting fresh and making changes in your life, be sure to include this review and update as well.
Your will and trust
Is your new job going to increase your net worth? Will you have a new savings or checking account, perhaps a new retirement plan? These are all reasons to once again review your will and trust. You may have made decisions about your assets and beneficiaries at a time when your assets were quite different than they are now or will be in the future. Likewise, your beneficiaries—whether that’s your children, your spouse, or perhaps friends or charities—may have changed. You may see things differently. And certainly, if you’re returning to work due to the death of a spouse or a divorce, you’ll want to be sure your will and trust is updated to suit your current circumstances.
Social security
There are many issues to consider with respect to social security and how rejoining the workforce might affect benefits. How can you increase the monthly benefit you will eventually be entitled to? What portion will be taxable when you do begin receiving benefits? What effect will your new paycheck have on your current benefits? When would be the best time to begin receiving Social Security? Be sure to discuss these options with your advisor and be sure you’re implementing the best plan for your new circumstances.
Employment agreement
If you’re given an employment agreement as part of your new job, please consider having an attorney review the agreement for you. California laws are generally favorable to employees, and you don’t want to be waiving rights you might otherwise have.
Conclusion. Congrats on that new job! But there’s a little more work to do at home, too.
Teresa J. Rhyne is an attorney practicing in estate planning and trust administration in Riverside and Paso Robles, CA. She is also the #1 New York Times bestselling author of “The Dog Lived (and So Will I)” and “Poppy in The Wild.” You can reach her at Teresa@trlawgroup.net.
Note: This is not legal advice to you individually, and you should rely on your own family law and estate planning attorneys to advise you.
Teresa J. Rhyne is an attorney practicing in estate planning and trust administration in Riverside and Paso Robles. She is also the #1 New York Times bestselling author of “The Dog Lived (and So Will I)” and “Poppy in The Wild.” You can reach her at Teresa@trlawgroup.net.
