How to Help Your Family Even After You've Gone
Without fail, my estate planning clients tell me that their primary goals are to simplify their planning and make things as easy as possible on their loved ones if they become disabled and when they die. If that's also your goal, here are 2 DOs and 1 BIG DON'T.
DO avoid as many court-controlled processes as possible.The two primary court-controlled processes we discuss in estate planning are Guardianship and Probate. Both of these are easily avoidable, IF you have a plan. Sadly, many people do not. A Guardianship is necessary during disability or incapacity, when someone has to manage your personal assets if you cannot manage them yourself. A Probate is necessary after death, when all you have is a Will or if you did no planning at all (referred to as "dying intestate"). Without a doubt, Guardianship and Probate take more time and cost more money than you would like.
A guardianship can be avoided by making sure you have a valid, up-to-date Power of Attorney. A Power of Attorney names one or more people to serve as your "Agent," and they can be worded in such a way that they are limited to particular types of assets and only become effective upon your incapacity. They are inexpensive and quick to create, especially compared to a Guardianship proceeding.
A Probate can be avoided by owning your assets in Trust. There are other ways to avoid probate, but they each present significant risks. A Trust keeps your assets in your control until you become disabled, and then ensures your assets are being managed and administered according to your wishes. When you die, your Trust contains all of the necessary provisions for administering and distributing your assets without court intervention. Additionally, Trusts can be used to protect your assets from estate taxes, the costs of long-term care, future remarriages, and can even protect assets once they have passed to your beneficiaries, making sure that what you want to provide to your loved ones is outside the reach of problems such as divorce, lawsuits, bankruptcy, or financial predators. What's more, with few exceptions, Trusts are quicker, easier, and less expensive than Probate.
DO think about your medical needs along with your financial needs.Many people make the mistake of believing that a Power of Attorney, a Will, or a Trust contain the necessary permissions for someone to make medical decisions for you if you become disabled or incapacitated. This is not correct. Along with planning for your financial and personal assets through a Trust and Power of Attorney, you need an Advance Directive (i.e., medical power of attorney) and HIPAA Waivers.
An Advance Directive does three very important things. It makes your wishes and guidelines clear regarding: 1) WHO should make medical decisions for you when you cannot; 2) WHAT TYPE of decisions should they make; and 3) WHETHER OR NOT to make any "anatomical gifts" (or organ/tissue donations) at death. By identifying who you want to make medical decisions for you, you avoid any number of uncomfortable family confrontations or unclear instructions. By letting that person (or persons) know what types of care you wish to receive, you relieve them from the guilt or anxiety they might experience worrying that they made the wrong decision for you. And by spelling out your intentions regarding anatomical gifts, you make it crystal clear for everyone involved - family, friends, healthcare providers - whether and how you wish to make your organs and tissues available for live-saving, therapeutic, or educational purposes.
A HIPAA Waiver ensures that your medical proxies, and any other trusted friends or family you wish, are able to discuss your healthcare needs with doctors, hospitals, and insurance companies without any administrative complications.
DON'T keep thinking you'll get it done later.Too many of my clients are family members of people who waited, thinking they were always going to have next year to get around to their estate planning. They call me in crisis, and our only option is to go to court. It takes time. It costs money. It disrupts family harmony. It keeps your loved ones from being with you or with one another during a difficult time because they must instead tend to costly administrative complications.
Take the first step. Contact an estate planning attorney in your area and set up a consultation as soon as possible.