“IF YOU WANT TO BE GENUINELY KIND, YOU HAVE TO BE OF ACTUAL BENEFIT – NOBODY WANTS TO BE THE RECIPIENT OF “HELP” THAT ISN’T REALLY HELPFUL – AND YOU HAVE TO PROVIDE THAT BENEFIT IN A WAY THAT SHOWS RESPECT AND EMPATHY FOR THE OTHER PERSON’S NEEDS.”
“I need to write my will. I just have been putting it off. Maybe next year.”
Estate Planning may sound forbidding, a bit boring or at least depressing. But what is involved in estate planning—thinking about yourself and your family, your business, your health, your finances—is not only important stuff that you ought to be thinking about, it’s also an opportunity to think through some big family issues and to talk to your loved ones about them. You think through how you care for yourself and your loved ones, how you conduct business and how you manage your property and assets. And you can save your family much of the heartache of making end of life decisions for you, by providing clear direction and priorities.
My job is to be your advisor and guide through this process and the architect of the plan that captures what you want in clear, effective and legally binding ways.
These are the tools we discuss:
Wills: Everyone has heard of a Will, sometimes called a Last Will and Testament. It says who gets what and who is responsible for getting the what to whom. It is a road map for what you want to have happen to your stuff when you die. It is very useful, and often the basis of someone’s estate plan, but it is not complete. If you have anything in your name that needs to be given to someone else, your name needs to be removed and that other person’s name put on it. Therefore someone representing you (called your personal representative or executor) will need to go to court and get the authority to do that. That person will also have to make an inventory of what you have, make sure your creditors are notified of your death, get debts paid and only then can distribute your stuff the way you say it should be done. (This is the process called probate.)
When properly drafted, your will can take care of those who will inherit your estate by including, among other things, planning for taxes, guardianship of minor or disabled children, limiting accessibility to inheritances because of an heir’s special needs, characteristics or other challenges. But it has no effect while you are alive and must be part of a public court process. That’s the role of your incapacity plan (see below).
Trusts: If you want to have more control and flexibility about how your property is handled while you’re alive as well as after death, have real estate in more than one state, have the desire to have your after-death distributions not known to anyone who goes to the court house and looks up will filings, or just want to have everything inventoried and in one place, we will talk about a Revocable Living Trust, the other common tool in estate planning. Since you are the trustee, you still control everything and there is no income tax effect. But when you die, your property can continue titled in the name of the trust or can be distributed and title changed through a person you’ve named as your successor trustee. That person does not have to go to court to get authority.
Incapacity Documents (Powers of Attorney): Regardless of what method you use that controls the disposition of your stuff after you die, the other critical part of estate planning concerns who can take actions on your behalf or speak for you if you no longer can do so. You choose someone to do this (an agent) and give them a document called a Power of Attorney. There are two kinds: one for business and financial decisions and one for health care decision-making. Additionally, people often want advance directives for end of life decisions, authorizations to receive health care information (even if not a decision maker), as well as authorizations to make decisions regarding your child or children, special documents relating to mental health treatments, and dementia directives.
The reason to have an attorney draft these documents for you, is that together you can make sure that they cover all the situations you want covered. The challenge is that the test of a Power of Attorney is only after you are no longer able to fix it. It is prudent to be safe, rather than leaving those who care about you unable to do what they know you would want them to do.