Today’s topic is a bit outside the realm of what I typically post but it is so important! Over the course of the past year, we’ve had numerous dealings with ill/injured family members and friends. The level of estate planning varied; however, navigating emotionally difficult times was a bit easier for those with thorough and valid estate plans.
Anywhere from 50-70% of Americans die without a will or proper estate planning documents in place.
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We know we’re supposed to do it, but it’s easy to put off. Until this year, I personally hadn’t updated my estate plan in over a decade! Circumstances and relationships change over time and by both creating and periodically monitoring the plan you have in place, you have a unique and vital opportunity to express your wishes pertaining to things like:
- disposition of assets
- protection of underage or disabled children, pets, etc.
- use of life-sustaining measures if you’re in an accident or have a terminal illness
Estate Planning Documents You Need to Have
- Living Will. This is a written statement detailing your desires regarding medical treatment in circumstances in which you are no longer able to express informed consent. Includes DNR (do not resuscitate) orders if you are in a terminal/unrecoverable state. NOTE: No one can “pull the plug” on you. You must be in a terminal state before DNR orders can be enacted.
- Healthcare POA. Is a legal document that lets you designate an agent to make healthcare decisions for you when you’re unable to. Deals more with day-to-day issues as opposed to end-of-life issues.
- Named Beneficiaries. By designating beneficiaries on your liquid accounts or using POD (payable on death) or TOD (transfer on death) designations on assets, you avoid probate.
- Will. A will expresses your wishes regarding the care of your children, as well as the distribution of your assets after your death.
- Trust. Trusts provide a legal framework into which property and assets can be placed. Assets in the trust avoid probate and are distributed according to the trust’s terms (which you detail) upon your death.
- Financial POA. Allows someone you designate to make your financial, business, and real estate choices when you can’t. Needless to say, this should be someone you really, really trust!
IMPORTANT: Getting these documents in place is the first step. The next most important thing is to tell people where they are! Be sure to share with your family or friends the fact that you have estate planning documents, where they are stored, and who the attorney of record is. Update whenever you have any major life or situational changes.
Why You Want/Need These Documents
Some people find contemplating mortality depressing and it stops them from completing documents like those listed above. But this can make things much more difficult for your family. With these documents:
- YOU get to make and express your own healthcare decisions and can leave a clear record of how you feel about life-sustaining measures in terminal situations, etc.
- You maintain your privacy. Wills and assets that go through probate are accessible by the public. Trusts are not.
- Distribute your assets to the individuals or organizations that you choose. If you die intestate (without a trust, will or direct beneficiaries, etc.) state law will dictate who receives your assets. This is not always who you might think, particularly in the case of blended/step-families or the childless.
- Your estate may be able to avoid probate, a process that can take years. Probate is required for real estate holdings and other assets that don’t have either direct beneficiaries or are held in a trust. Your family members won’t be able to sell any assets until after probate which could cause prolonged stress as well as financial strain.
What to Do if You are an Executor or Trustee
You might be overwhelmed if you find yourself appointed as executor of someone’s will or trustee of their trust. Here are some resources to help you get started if you find yourself in that role.
- Checklist for Executors
- Checklist for Trustees
- This document outlines some important considerations for those designated as Healthcare or Durable/Financial POAs.
I’d love to hear from you! Do you have a current estate plan in place? Does your family know about it? How often do you update it?
I’m off next week for the July 4th weekend but will be back soon. Have a great holiday! 🎆
