Estate planning is important for people of all ages, but as we age, the need for planning becomes even more critical. Many people avoid estate planning, because they do not want to think about the end of life, failing health or disability. It seems people figure that they did not die today so they probably will not die tomorrow. Others believe that an estate plan is only for rich people. Nothing could be further from the truth.
The estate is all your stuff including debts, owned both individually and jointly, including bank accounts, real estate, jewelry, etc. An Estate Plan is just a set of instructions on how to deal with all that stuff. Without an estate plan, it can be very difficult to carry out a person’s wishes. If your stuff included real property, or if all your stuff is worth more than $50,000.00, not planning can bring on a long, drawn out probate that can be very expensive for the family. If an estate plan is in place, it can provide peace of mind for adulst and their family, as well as protection for the wishes of the senior.
Below are some basic guidelines for what should be included in an estate plan.
1. Will. A will provides for and personal representative of the estate, who will take care of managing the estate, paying debts, and distributing property as the instructions lay out. Who gets your stuff can be planned out in the will. This can be as broad or detailed as a person wishes. In a will, beneficiaries and guardians for minor children should be nominated.
a. It may not seem necessary to discuss minor children when discussing seniors and estate planning, but with the rise of grandparents raising grandchildren, this may indeed be an important part of the will. A senior adult can spell out, in the will, how they want their funeral and burial to be carried out as well.
2. Living Will. A living will outlines a senior’s wishes for end of life medical care. It can include, in as much detail as the senior wishes, what medical treatments the senior would or would not like to have in specific situations. A living will takes the stress of making those decisions off of family members and helps to keep peace in families during times that can be difficult and emotional.
3. Healthcare Power of Attorney. A healthcare power of attorney is also a key part of an estate plan. This legal document provides for someone to legally make healthcare decisions for a senior adult. A durable healthcare power of attorney will remain in effect for the senior if the senior becomes unable to make decisions.
4. Financial Power of Attorney. A financial power of attorney names an agent who has the power to act in the place of the senior adult for matters relating to finances. The durable financial power of attorney stays in effect if the senior adult becomes unable to handle their affairs. By having a financial power of attorney in place, the stress and expense of a guardianship can be avoided, and the senior has the final say in who will make decisions relating to finances.
5. Trust. Setting up a trust can be beneficial for the distribution of specific assets or pieces of property. A trust is like a set of instructions on how to give what to whom. It can remain private, it does not go through a public probate, as compared to a will. The set of instructions states how to give property to loved ones. For example, with a minor the trust may hold property for the benefit of the minor until the beneficiary can manage the property on their own. This can be is done without the need of a court. This also allows for privacy of the trustmaker, where with a will and a public probate, all of the deceased person’s assets and the terms of their will is made public.
Having an estate plan is necessary if you or your senior loved one wishes to have a say in what happens in the end of life and with assets after death. Consulting and planning with an elder law attorney will help to ensure that all options are explored and the best possible solution is utilized. The elder law attorney can walk you through all of the necessary parts of the estate plan, provide explanation, and prepare the paperwork. Elder law attorneys will help take the guesswork out of estate planning.
If you have any questions about wills or trusts or powers of attorney, please give me a call. Estate planning and elder law are my areas of focus and I love to help.