Never underestimate the power of a basic estate plan. Currently, the world is a complex place. Just because the world is so very complicated doesn’t mean that your estate plan must be.
A basic estate plan focuses on a different set of “P’s” people, property and plans. Any good estate plan, basic or otherwise should answer two questions: “What happens to my stuff when I die?” and “What happens if I am seriously ill?”
The center piece of a basic estate plan is a Last Will and Testament. A Will can be a simple document distributing assets outright to your heirs or it can be more complex; planning for all types of situations from minor children to special needs beneficiaries. Wills only contemplate one thing- your death, but what happens if you don’t die and you just become seriously ill or incapacitated in some way? Planning for incapacity is just as important as planning for death.
The core document in an incapacity plan is a Durable Power of Attorney. A Durable Power of Attorney allows you to appoint an agent who can handle your financial affairs if you should become incapacitated. A Durable Power of Attorney is critically important. In the absence of this document no one has the power to manage your affairs while you are incapacitated and the only way to get that kind of power is to go to court. Going to court, even the probate court, is not what I would call a cost-effective solution. Any time you have to get a doctor, a lawyer and a judge involved it is going to be costly. This problem is easily avoided with a Durable Power of Attorney.
Healthcare Directives and Living Wills are extremely important when planning for incapacity. These documents focus on your health. A Healthcare Directive appoints someone to interact with healthcare professionals and make decisions on your behalf if you are incapacitated. Just as with the Durable Power of Attorney, in the absence of a healthcare directive your family would have to petition the court to get the power to make healthcare decisions.
The final piece of a basic estate plan is a Living Will. A Living Will lets you inform your doctors (and loved ones) your wishes regarding what extraordinary medical procedures you want performed if you are in a terminal condition with no hope of recovery. It spells out your exact intentions which takes the weight of a decision like that off your family. In these times it is critically important to have a healthcare agent who can speak for you and a Living Will in place to speak to your wishes regarding end of life decisions.
Thinking about our own mortality is not an easy thing to do. Planning for not being here can be stressful. Sometimes it’s hard to even get started. Focus on people and property. Once you have identified the important people in your life and your property- it is time to make a plan on how to transfer your property to your people.
If you have estate planning questions that you would like answered in this column, email me at Marc@attorneymarc.com. If you ‘d like to come in and talk about updating your existing plan or making a new one, I offer free initial consultation. Virtual, phone and in person consultations are available. Call me at 203-500-0201 to schedule an appointment.