This may be a good time to start a conversation with your family members about your estate plan. We are all susceptible to a critical change in our health at any time. These uncertain times bring a renewed focus on the need to have a plan in place should the need arise. Sharing the news about considering an estate plan can start a meaningful discussion.
You have goals for what you want to accomplish with your estate plan, both for yourself and for your family. Share these goals with your family members. Your goals might include the hope that your children will have a safety net in times of need or your desire to leave items of personal property to specific persons. Sharing your goals may help your family understand the structure of estate plan you are considering or already have in place.
Following is a list of documents that your estate plan should include.
A Last Will and Testament — commonly referred to as a Will — is a basic document in most estate plans. The role of a Will in a specific estate plan varies, depending on the individual’s goals and needs. A Will typically addresses these concerns:
It’s important to note that a Will is not the same as an estate plan. There are other documents in a complete estate plan.
In a durable power of attorney for property and financial matters, you name a trusted person to manage your finances in the event you become incapacitated temporarily or permanently. This particular concern is very real during the current Covid-19 pandemic, when individuals can suddenly become ill and be hospitalized. If you don’t have this document in place, and you are incapacitated, your family will have to ask the court to appoint a conservator for you.
A patient advocate designation — also referred to as a durable power of attorney for health care — names the individual to advocate for you regarding health and medical issues in the event of your incapacity. It may include your instructions about medical care, including end-of life decisions. Like the durable financial power of attorney, this document is essential during the current coronavirus risks.
Many estate plans include a trust, which enables an individual to avoid probate and control distribution of property after death. The trust document names the trustee to manage and administer the trust and the beneficiaries who receive distributions. The document also specifies all the details about how the trust will operate.
Preparing an estate plan includes identifying all your assets and accounts with named beneficiaries, to ensure that those designations are consistent with the overall goals and structure of your estate plan. The accounts may include life insurance policies, bank and securities accounts, IRAs and other retirement accounts, and other assets. The beneficiary designations determine how assets are distributed and apportioned among multiple beneficiaries.
When you discuss your estate plan with your family, you should share important information about your plan and documents, including the location of your estate plan documents. You should give family members the names of your attorney, accountant, and financial advisor.
You should also share copies of specific documents with designees named in those documents, including your personal representative, trustee, attorney-in-fact in your durable financial power of attorney, and advocate in your patient advocate designation. When you create or revise your estate plan, you should talk with each of these individuals before you execute the document, to make sure they are all willing to assume the responsibilities of the respective positions.
To the extent it is comfortable and appropriate, you should explain your future wishes to your family members and inform them how you made the decisions that your estate plan memorializes.
If you need to create your first estate plan or revise an existing plan, one of the first steps to take is setting up a consultation with an experienced estate planning attorney. You should never use do-it-yourself (DIY) forms or an online service to create any estate plan document. Using that approach creates a substantial risk that you will not accomplish your most important goals.
In my practice at Ager Law Office, I help individuals and families with all aspects of estate planning, including wills, trusts, durable powers of attorney, and patient advocate designations. From my Ann Arbor office, I serve clients throughout Washtenaw County. To talk with me about a new estate plan or about updating your existing plan, call (734) 649-0784, send an email to firstname.lastname@example.org, or use the online contact form.