It seems to me that whenever I talk to someone from my generation about the type of law that I practice, they are never interested in what is called estate planning. I believe that the common misconception is that estate planning is only for the older generations, while the younger generation who are only fresh out of college have nothing to be gained from taking the time to plan for the future. However, estate planning is much more than the video recordings lawyers play after the death of a loved one that we see in the movies, it has a real a practical objective than every adult should take advantage of. In this blog post, I'll explain the real advantages to beginning to plan for your estate now, and consistently updating things as they are needed.
Misconception 1 - Estate Planning is for only after I'm gone.
Wrong! Estate Planning covers medical and legal issues that arise often.
The biggest misconception that many people have is that Estate Planning only covers issues that arise after someone has passed away. In actuality, the majority of the documents that I normally recommend to clients interested in fully planning for the future include documents that are necessary to help their loved ones care for them while they are still alive.
Heaven forbid your are ever in an accident or diagnosed with a disease that renders you unable to care for yourself or make decisions for yourself, either permanently or temporarily, it is important that you have in place basic estate planning documents that authorize people of your choosing to act on your behalf. Plus, these documents can direct this person and your doctors to make decisions in accordance with the specifications that you set out.
Why are these documents so important, you may ask? The short and simple answer is that without these documents being in place, your doctors and the government will have the power to make the decisions for you, and often times, there is little your family can do to change things when time is of the essence. If you were to become incapacitated either mentally or physically, your family would be required to seek out the court's assistance in authorizing them to make the decisions for you, a sometimes costly procedure in terms of both money and time. You may think that your parents are automatically authorized to act on your behalf, but in actuality, their legal authority to do so is quite limited once you become an adult, without assistance from a court, that is.
The most important documents that we help our clients to complete are:
- Living Will: The purpose of a living will is to specify what you wish to happen under certain circumstances. Both your doctors and your family are required to abide by the wishes that you put in your Living Will should you ever become incapacitated and unable to make decisions for yourself. For example, in this document you could specify that your family is never allowed to remove life sustaining support, or you could require them to do so after a certain period of time. The choice is up to you in this document.
- Power of Attorney: A power of attorney is a document that authorizes someone of your choosing to act on your behalf in regard to legal matters, should you ever become incapacitated. In the document, you can authorize them to act on your behalf for only specific reasons or for any reason, and you can limit how they should act and direct them any way you see fit. This document is what would allow your family to sell your home, refinance your mortgage, enter into contracts for long-term care, and all other legal issues that you would otherwise need to attend to.
- Health Care Power of Attorney: This document is similar to the legal POA, however this document authorizes certain individuals to make their own decisions regarding your medical care. In the Living Will, you decide what you want to happen. However, in the HCPOA, you authorize others to make the decisions for you. Again, you can limit this authority in anyway that you see fit, but it is important because it directs someone who can gather all of the information at the time to make the best decision possible for you.
Even if you don't have much in the way of assets, or even if you are still living on your parents couch, the above documents are necessary for every adult to help avoid confusion and delay should you ever be in a position in which you are unable to act on your own behalf.
Misconception 2 - I only need to write a will when I have assets I want to give to specific people
Wrong! Estate Planning documents will be important to your loved ones.
It might not be the most comfortable subject to discuss, but the most important reason for creating a Last Will and Testament or placing your property in Trust isn't necessarily only to designate which relative is to receive your beloved car or your favorite guitar. The most important reason for someone to have a will is to avoid the court procedures that will be necessary if you do not have one.
Probate is the processes of going to court to determine how your assets should be divided and how your debts should be paid. Often, this procedure can end up being very costly and quite lengthy in time. One thing to note is that the lawyers who help with this procedure are usually paid directly from your assets, prior to them being disbursed to your loved ones. Furthermore, if you do not have a will, then a probate judge will be the one who determines what happens to the family heirloom that you owned. Quite often, the easiest answer when two people are fighting over something of value, is to sell the item and distribute the proceeds evenly. Bye, bye family heirloom that has been passed down for generations.
Finally, this procedure can often get quite heated and cause a rift between family members. However, a clearly written will that devises of all the individuals property can hardly be argued with, allow for family members to accept that decisions that have been made and to move on.
Misconception 3 - I should worry about this later.
Wrong! Call me today to talk about your estate. You never know when these documents will be important.
Andrew Ferguson
Contact information available at www.murraylawandtitle.com
