It’s a clear and concise message: Everyone, yes, even you, should have an estate plan. It doesn’t matter where you are in life (ok, maybe millennials are excluded for now). You may be the parent of young children. You may be a single, divorced or widowed individual. You may be an elderly couple. You may be an unmarried couple with or without children. You may be part of a blended family. No matter what your circumstances in life, you should be sure your affairs are in order and are clearly communicated to those who must administer your estate after death.
There are many different kind of documents which may be appropriate for your circumstances. My regular procedure, when approached by new clients, is to begin by sending them a questionnaire, which asks for detailed information about what assets they own and how they are titled. This allows me to advise clients with respect to estate taxes, probate and other such matters. The questionnaire also asks for family information and sets out a list of questions that the clients should consider in determining the provisions of their documents. Once I receive and review the questionnaire, I will then proceed to a initial meeting with the clients in which I will explain all options, answer all questions, and make a recommendation for the proper plan based on all of their personal and financial information.
So what does an estate plan consist of? In every plan, there are three documents which will always be included. They are a Will, a Durable Power of Attorney, and a Health Care Proxy. The Will in simplest form will set out the client’s wishes for distribution of assets, and appoint a Personal Representative (the new term for “Executor”) who is charged with administering the estate at the death of the decedent.
Even if you do nothing else, sign a Durable Power of Attorney. This is an absolutely crucial document that each and everyone person should have. This document appoints an attorney-in-fact and grants that appointee broad powers to act on behalf of the principal with respect to financial, business and other such affairs in the event the principal is incapacitated. Absent this document, it would be necessary for some involved individual to petition Probate Court for appointment as a conservator. This is a timely and costly process. A valid Durable Power of Attorney saves all of that time and expense, and gives the appointee the legal power to act on behalf of the principal.
A Health Care Proxy is also recommended. It is simplest form, the principal will appoint an agent who is authorized to make medical decisions on behalf of the principal in event of incapacity, customarily in the context of a terminal condition with no reasonable likelihood of recovery. A longer form Health Care Proxy gives the principal the opportunity to express their wishes with respect to the types of medical interventions they may want provided or withheld in the circumstances. Whichever you choose, you ensure that your medical decisions are being made by a person you trust to carry out your wishes.
An estate plan may also include one or more trusts to address the clients’ personal circumstances and needs. Trusts may be funded during life, or after death. A couple with young children may want to establish a trust that requires assets to be held back from the children until they reach an age older than 21 years. Parents of a spendthrift child may want to create a trust that will prevent the spendthrift child from receiving a large distribution all at one time. Parents who have a disabled child may need a special needs trust for that child. Some trusts address the distribution of assets for a blended family. And some trusts are created simply for the purpose of avoiding probate in the estate of the Settlor. These are just a few of many examples of how trusts can become an integral part of your total estate plan.
Most of all, however, the client must work with an attorney with whom they feel comfortable, someone who will listen to the clients’ wishes, be sensitive to the clients’ needs, work in partnership with the clients to achieve their goals, and when necessary, provide emotional support when addressing any difficult situations, all while presenting recommendations based on the clients’ individual circumstances. I understand that this can be a very difficult process for many people who don’t want to think about their eventual death (I keep a box of kleenex in the conference room), and I think a good estate planning attorney should be gentle, supportive, sensitive yet highly knowledgeable at the same time. I like to think that describes who I am as I work with my clients. I am proud to say that the feedback I get from existing clients supports that.
This post could be far longer, but it gives you a preliminary understanding of what is involved and, most notably, the importance of having an estate plan. More detailed discussions will follow in future posts. In the meanwhile, however, you would be well advised to make that phone call or send that email to me, or whomever else you may choose, and get started on this crucial work. It is a gift to everyone.