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If years were given themes, 2022 would be the year of how to mitigate risk. After all, the past year has brought more successive crises than most of us have ever experienced (and that’s saying something after living through 2021). Since January 2022, Covid-19 has surged, inflation has continued to balloon, gas prices have gone stratospheric, and the world is closer to nuclear war than perhaps ever before. Times are tough and so it is no surprise that crisis management is a hot topic.
How to best manage a crisis is a complex matter. Simply shifting into crisis mode is not enough. Before a problem can be solved, it needs to be understood. This means assessing key risk indicators and constructing a plan. Here’s how you do that.
3 Tips for How to Mitigate Risk Amidst Crisis
The multiple crises we are all facing in 2022 challenge us on an existential level. Our financial and physical well-being is under threat. For some, the danger is immediate, for others it is speculative but close enough to raise alarm. In such a situation, the best way to mitigate risk is to return to basics. All of us need to ask: Is my life’s work protected? Are my health and finances secure should anything happen to me? Have I done everything to ensure my family’s well-being? Am I prepared for the worst?
An estate plan answers all of these questions. Accordingly, the following tips revolve around putting such a plan in place.
1. Shield Yourself from Incapacitating Injury
A durable financial power of attorney and healthcare directive are two essential estate planning documents that shelter you from risk by protecting your finances and physical well-being. Signing these documents ensures a trusted loved one or advisor is empowered to step in on your behalf should you suffer incapacitating injury and lose the ability to self-advocate.
2. Secure Your Family’s Well-Being
Key risk indicators in times of crisis are either of a financial or personal nature. Both types come into play where family is concerned and both are addressed by executing a will.
When you write a will you designate guardians for any minor dependents, announce your final wishes, and dictate how your assets will be distributed when you pass. Attending to these tasks ensures your loved ones’ future is not decided according to state probate legislation but by your own considered judgment.
3. Lock Down Your Finances
You can’t manage a crisis without resources which is why now, more than ever, may be the time to establish a trust. By placing assets in a trust, you lower the value of your estate, minimize your tax liability, and protect yourself from creditors. A trust also ensures inheritances pass seamlessly to beneficiaries by removing the need for the probate court’s seal of approval.
No single trust accomplishes all of the above which is why it is important to speak to an experienced estate planning attorney when investigating the subject.
To learn more about the key role estate planning plays in crisis mitigation, do not hesitate to reach out to the Law Firm of Christopher W. Dumm either by calling 417-623-2062 or using the contact form on our website.
Contact the Estate Planning Attorneys at the Law Firm of Christopher W. Dumm