Questions First Responders Must Consider to Best Protect Their Loved Ones

Thank you for all that you do for us. We understand that being the first one on the scene can come with many different risks. We are dedicated to protecting you and your loved ones from the different types of emergencies that may pop up during your life. The following are some important questions for you to consider that can help you prevent your own family emergency.

What Happens if I Am Injured or Unable to Make My Own Decisions?

Being unable to work or make decisions for yourself can seem like an unimaginable scenario. You spend your time coming to other people’s rescue, so it may be difficult for you to imagine a time when you might need help or rescue. However, such things happen to people every day. To best protect yourself and your loved ones there are a few things you should consider.

Disability Insurance

Disability insurance allows you to supplement some of or all your income (depending on your level of coverage) while you cannot work. With the proper coverage in place, you know that, should you be injured, you and your loved ones will still have money coming in to support you. If you have no disability insurance or are concerned that its coverage is insufficient, consider reaching out to an insurance agent to expertly review your current situation and your future needs.

Financial Power of Attorney

With a financial power of attorney, you choose a trusted person (an agent) to handle your financial matters (sign checks, open a bank account, etc.) when you cannot. You can specify what the agent can do and when the agent can act based on your state’s law. Without this document, a court will have to appoint someone if you need help handling financial matters. Depending on your situation, the person the court selects may not be the one you would have chosen.

Revocable Living Trust

If you are looking for maximum protection for your loved ones with minimum court involvement, a revocable living trust can be useful if you should need someone else to manage your money and property for you. A revocable living trust allows you and your loved ones to avoid the probate process as long as you transfer all of your money and property to the trust during your lifetime. If you want the terms of the trust agreement to control after your death, for assets such as retirement accounts you may need to name the revocable living trust as the beneficiary instead of changing ownership. In most cases, you (and possibly your spouse if you are married) are the initial trustee and continue to manage the money and property. In addition, you can continue to enjoy the use of the money and property during your lifetime. If you become unable to manage your financial affairs, a backup trustee that you previously selected can step in without court involvement and manage the trust for your benefit and your spouse’s if you are married. You can also designate what will happen to the trust’s money and property at your death.

Medical Power of Attorney

A medical power of attorney allows you to appoint a trusted person as your medical decision maker to communicate or make healthcare decisions on your behalf if you cannot do so. Absent this designation, the court may have to name someone to make such decisions for you. As with your financial matters, the person selected by the court according to the state’s default statute may or may not be the person you would have entrusted with making medical decisions on your behalf.

Advance Directive or Living Will

Known by either name depending on your state’s law, an advance directive, or living will, allows you to convey your wishes regarding end-of-life decisions. This document can make carrying out your wishes easier and can reduce tensions among your loved ones brought on by uncertainty.

HIPAA authorization form.

A Health Insurance Portability and Accountability Act (HIPAA) form allows you to grant specific individuals access to your medical information (e.g., to get a status update on your condition or receive test results) without giving those individuals the authority to make decisions on your behalf. Although these individuals cannot make any decisions, sometimes providing loved ones with information can help prevent conflict between your chosen medical decision maker and the rest of your loved ones because no one is left in the dark.

How Can I Provide for My Loved Ones after I Have Passed Away?

No one wants to think about what will happen after they die, but if you do not think about it, you cannot plan for it.

Life insurance is one of the first things most people think about when planning for death. Do you have enough life insurance to support and provide for those you care about at your passing? If you are unsure, it is a good idea to consult with your insurance agent and financial advisor to make sure your insurance policy sufficiently covers your loved ones’ support needs.

In addition to making sure that you have enough life insurance, you should make sure that your beneficiary designation form is properly completed. Often, people simply name somebody when asked to designate primary and backup (contingent) beneficiaries. Although completing the form is better than nothing, this type of designation may lead to unintended consequences. When you have named an individual, the death benefit will be paid to them in a lump sum at your death. This situation can be disastrous if the person has problems managing their money or has creditor issues. It can also cause problems if the named person is a minor. In that case, a court-appointed guardian will have to manage the money until the beneficiary reaches the age of majority, at which time they will receive the money in a lump sum.

How Can I Protect My Hard-Earned Money and Property from a Lawsuit?

Because of the nature of your profession, you may be concerned that you could be sued. While the situations in which a first responder can be sued vary from state to state, consider meeting with an insurance agent to assess whether you could benefit from additional professional liability or other insurance as an extra layer of protection.

The way you own your property can also offer a level of creditor protection. For example, some states allow married couples to jointly own certain property as tenants by the entirety. Property owned in this way is protected from creditors to the extent a creditor has a claim against only one of the spouses. However, the extent of the coverage can vary by state and may be subject to certain exceptions for the federal government.

It is important to remember that, if you know of a potential lawsuit or are in the middle of one, you should not sell, gift, or retitle any of your accounts or property in an attempt to shield them from the lawsuit.

How Do I Keep My Affairs Private?

You do not have to be a celebrity to want privacy. You may be concerned about someone being able to find out where you live because of your job. This is where proper estate planning can be useful. By purchasing your home in the name of a joint revocable living trust with your spouse and naming the non-first responder spouse as the trustee, the property’s owner is the trust. If a person’s name must be listed, it will be the trustee’s name, not the first responder’s. It is important to remember that the first-responder spouse not being the trustee does not mean they cannot be a beneficiary. They would still maintain a level of control and would benefit from the trust as a trust maker and beneficiary but would not be the public owner of the accounts and property. However, it is important to note that placing the house in a joint revocable living trust provides no asset protection. As mentioned earlier, some states offer additional protections for homes by using tenancy by the entirety. If your state permits tenancy-by-the-entirety trusts, you may need to weigh the asset protection benefits that tenancy by the entirety provides against the privacy that a joint revocable living trust provides.

An added benefit of a revocable living trust is that all trust management occurs without court involvement. You can specify in the trust document how the money and property are to be used during your lifetime, any periods of incapacity, and at your death and the death of your surviving spouse.

Once again, thank you for all that you do. You do so much to protect everyone else, and we want to take this opportunity to protect you. If you would like to discuss these questions further or if you have additional questions, please contact us. We are available for in-person or virtual consultations, whichever is most convenient for you.