A Will is One Good Piece of an Estate Plan, But You Need More . . .

The importance of a will is commonly accepted.  In a will you can give your possessions to who you want and name a person to do that.  However, will-based estates are required to be probated, which is a cumbersome, public, and costly court procedure. 

More important, a will only operates after you die. Yet, there are countless situations when you and your family need planning or protection during your life.   Examples include: protecting assets in the event of divorce, providing for family members with special needs, and assuring choices will be respected in the event of an incapacity, just to name a few.  A good estate plan works both before and after you die, is efficient and privately administered.

What is a good estate plan?

A good estate plan is at minimum, a will, trust, durable power of attorney for finances and power of attorney for health care,  prepared in a manner that together, embody your instructions and choices for how you want your money and property managed, and what decisions you want followed if you are incapacitated.

Think of a trust as a bucket that holds assets you put into it and appoints a trustee to manage them.  To properly manage the trust, the trustee follows the instructions in the trust document that reflect your goals and choices. The trust avoids probate, and allows the assets to be managed privately, according to your instructions.

The durable power of attorney appoints an agent (usually the same as the trustee) to manage money not in the trust bucket, typically retirement accounts, insurance, and pensions, and handle tasks such as filing personal tax returns or dealing with social security.

The will appoints an executor and typically directs any left-over (or remainder) assets go into the trust bucket so that the trustee can distribute them according to instructions in the trust.

The power of attorney for health care names an agent to make health care decisions for you if you become incapacitated.

People tend to think: “I don’t have a large estate, so why do I need more than a will?”  Here’s why:

You risk having the court appoint someone to make choices for you if you become incapacitated, and that is not something you want to have happen.  If you don’t have documents validly appointing a legal representative for you in the event of an incapacity, then the court has to appoint someone for you.  It is called a conservator.  To get a conservator appointed is a very costly, lengthy, and public proceeding that requires notice to all family members to the second degree.  So if you don’t want that, you need an estate plan. 

You can protect your portion of your estate in the event of divorce, or early death.  If you are married, your estate plan can protect your share of assets and preserve your choice of who you want them distributed to when you die, if your surviving spouse remarries.  It is also important because medical science has become much more efficient at preserving our physical bodies than our minds.  Consequently, it has become is all too common for scammers or ill-intended family or caregivers to prey upon vulnerable older folks to get their money.  If your intentions are memorialized in your estate plan, it is easier to defend them from ill-intended persons.

You can provide for family members with special needs.  Concerned individuals commonly wish to protect or provide for a child with developmental disabilities, a family member who suffers from mental illness later in life, or someone who encounters a tragic accident leaving them dependent on others for care and financial management.  A trust can provide for these special needs by directing the trustee set up a special needs trust to supplement any public benefits received by that beneficiary and provide for that family member during their life.

How do I start? 

Your estate planning attorney can provide a questionnaire, and can be a resource for talking to family about your goals and choices.  Your estate planning attorney can then prepare your plan in a way that reflects your goals and choices, and provide the foundation for taking care of you, your money, property, and family, during your life and after you die. Taking these easy steps now can protect you and your family’s legal and financial future and grant you peace of mind to enjoy the present moment to the fullest.