In my family law practice I advise my clients to change their will. I find that many of them do not have a will. I have decided to expand my practice to include Estate Planning.
Estate planning is not financial planning but should be a part of any financial plan. Estate planning is more about "End of Life Issues". Not what most people want to think about right? A basic estate plan should include, at the very least: A will, a Health Care Directive, a Power of Attorney for Health Care and a Durable Springing Power of Attorney. You may also want a Revocable Trust, minors trust, and trusts used to reduce inheritance taxes.
I will discuss the more complex plans later. Here is an explanation of the basic:
Last Will and Testament
A will allows you to direct what will happen to your property upon your demise. Most important function is to name a Personal Representative. This person will be charged with carrying out your wishes. If you have minor children you will want to name a Guardian and a Trustee for your children. The Guardian will take care of your children physically and a Trustee takes care of the children's money or property. I usually recommend that this be two different people. You will also want to name alternates.
Contrary to popular opinion, a will does not avoid probate. Your will means you have control of the process rather than relying on state law to disburse your assets. A will is a thoughtful thing to have for the sake of your loved ones.
Health Care Directive
Also called a "living will", this directive makes your wishes known regarding the extent of life support you desire. A very personal decision, it makes it clear to your relative and doctors what your wishes are.
Power of Attorney for Healthcare
This directive names the individual you would like to make decisions about your care when you are not able. It is important to discuss this sensitive topic with your chosen representative so he/she can make your wishes known.
Durable Springing Power of Attorney
This Power of Attorney allows someone to handle your financial affairs when you are not able. Durable means it remains in effect though you are incapacitated and Springing means it does not go into effect until your are deemed by your physician to be incapacitated. You will also want to add a HIPPA release so health care providers can release information.
These are the basic minimum documents you should have for your estate plan. Yes, you can find them on line but, of course, I recommend you talk to an attorney. State laws differ and you want to make sure your documents comply with your state's laws. Sometimes one word gives a document a different meaning. If you make a mistake, it can't be corrected when your gone. You may be surprised that it isn't as expensive as you may think.
I am always available for a free consultation. (Provided you live in Washington State)
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1 comment:
Good post, Karin. As you know, personal property issues are are often the most time consuming for an estate executor. If sufficient time is spent planning for personal property distribution, the estate liquidation process moves much faster. The University of Minnesota has an excellent workbook to assist families in dealing with personal property issues; it is called "Who Gets Grandma's Yellow Pie Plate" and can be purchased online at the Universities book store.
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