Doing this will make it easier on your heirs
By Dave Ison
When I consider that some of the most wealthy and famous people in America have died without an estate plan, my thoughts turn to my clients. Who among you have ignored the need to do this?
Aretha Franklin, Howard Hughes and Prince all died without a will. I find this astonishing. They all had smart financial planners and attorneys who were taking care of their interests. But sadly, these three incredibly talented and wealthy people passed away without any indication about who were to receive their assets.
Estate planning isn’t an easy subject to ponder. We look at our assets knowing that one day we’ll be gone. But, dying without a plan creates problems, mostly for your family. So, if you don’t have a written will, the probate court will decide – including the custody of minor children.
Imagine this scenario: the court assigns your children to the care of complete strangers, maybe incompetent strangers. Your sizeable assets are distributed to a son who has serious addiction problems. You might have an estranged sibling who is given title to your ranch and other holdings. Welcome to the real world of probate.
Each of us have specific life circumstances. A person with five children from two previous spouses would have a more complicated estate plan than, say, a person with a stable 40-year marriage and an only child.
No matter your personal circumstances, please do yourself a favor and get these three documents written as soon as possible: the will, the living will, and the power of attorney.
Where There’s A Will
Get the will drawn up and there’s a way forward. Your intentions are known. A probate court will work with your fiduciary to assure your wishes are carried out. The will states your wishes.
A will is a legal document that states your instructions about how your estate – bank accounts, brokerage accounts, jewelry, and cars – known as probate assets – will be distributed to the people you select. A will also dictates the type asset and how much each heir will receive. The will has no impact on jointly held property, property with beneficiary designations, or property that transfers by contract outside of probate. This “non probate” property passes according to the terms of the instrument, beneficiary designation, or other contractual provision. The will deals strictly with “probate property” that is property owned at death that does not pass any other way. Your will is also the instrument to designate who you want to be your minor child’s guardian.
For people with minor children, your will names the guardians to administer their care, and not the court. If for no other reason, I strongly urge young families to setup a will. Because otherwise, the consequences are profound. If you die without a will, the court decides who becomes the guardian. Typically, it’s the parents of the deceased, or the siblings. The authorities can place your children with children’s services if the circumstances of your death don’t meet certain criteria. Other documents can help address this circumstance.
Wills And Estate Plans Fulfill Other Needs
Wills speed up the process of charitable bequests and the probate court process. The most compelling reason for a will, after naming a guardian for minor children, is to determine who will gather your assets, pay your bills, and distribute what’s left to the people you want to receive it.
So, draft your will and name the executors, beneficiaries, and guardians. These are the people entrusted to handle many important aspects of your estate plan including raising your children, distributing assets, overseeing the estate documents, and managing funds and assets in your estate until they can be distributed to your named beneficiaries. The will is also the instrument you can use to tell the probate court who you do not want to receive distributions from your estate. Without that important exclusions, the laws of the state will determine who received distributions from your estate which may not always align with your wishes.
A Living Will and Health Care Power of Attorney Keeps It Clear
A living will and a health care power of attorney set forth your instructions about medical treatments if you become incapacitated and can’t communicate. They also spell out which medical procedures you approve, how long you want to be kept on life support, and what to do with your body after death. A living will and health care power of attorney remove the strain from family who would have to make these incredibly difficult decisions.
A Durable General Power of Attorney Gives Power (When Needed)
What if you are incapacitated and in a coma? Who pays your medical bills? What about your mortgage? Who is allowed to sign documents on your behalf? The durable general power of attorney gives the person you designate the power to manage financial and legal actions on your behalf.
You need to set up a power of attorney in advance of when you need it. Otherwise your family and loved ones might have to petition the court to establish guardianship over you. Be aware that there are general and limited powers of attorney, which can give full powers, or only some powers to your designee.
Commit to getting these documents written and you’ll have a strong framework for your heirs and family. After all, they’re the ones who are left to cope with the difficult days ahead after you pass away. Why not make it easier for them?
Keep in mind that a will is never static. At their best, they reflect the current dynamics of a family, the wealth involved and personal circumstances. Families change. Couples divorce. Children marry. More children arrive, along with grandchildren and even great grandchildren. Financial positions change, too.
Feel free to contact me. I have worked closely with many clients over the years, helping them arrange the right will and the appropriate estate structure as their lives evolved.
I look forward to assisting you. We welcome you to contact Ison Law today!