“I’ve been meaning to do that!”
Most of us focus too little on how our financial and healthcare decisions will be handled in the case of our incapacity, as well as on how our estate will be handled after our passing.
Why is this?
- Procrastination: Basic human behavior that acknowledges the importance of something but plans to “get to it later”.
- Cost Concerns: Much more appealing to spend $5,000 on an Alaskan cruise than with an attorney.
- Fear of Death: More basic human behavior.
- Misconceptions: Believing things will go just fine without having these documents in place.
- Complexity: These can be difficult decisions to make and hard to know where to start.
- Belief That Heirs Can Handle It: Just let them deal with it – I’ll be gone!
These, and other reasons for not planning, can result in some serious consequences:
- Intestate Succession: This legal term means you died without a will and therefore your assets will be distributed according to state law, which may not align with your wishes.
- Family Disputes: The absence of clear instructions can lead to conflicts among heirs that result in unnecessary delays, broken relationships, and costly legal battles.
- Loss of Control Over Medical Decisions: Without advance healthcare directives, your family may struggle to make medical decisions on your behalf resulting in confusion, stress, and the delay of important medical interventions.
- Guardianship Issues: If you have minor children, not designating a guardian can result in the court deciding who will care for them, which may not reflect your preference.
- Increased Tax Burden: For those with net worth over the estate tax exemption ($13.9 million per person[1]), a lack of estate planning can lead to higher taxes on your estate and reduce the amount passed on to your heirs.
- Missed Charitable Opportunities: Without an estate plan, you might miss the chance to support your favorite charities through planned giving.
Having worked with many clients and their families during times of an extended illness and/or death, we can testify that having these documents in place (and updated regularly) makes a world of difference for everyone involved, but especially for the family members.
But there is hope! These documents are usually not as complicated or expensive as feared. The hardest part is making the decision and time to do it.
The following is a list of the most common types of estate planning documents you may need to address with an estate attorney:
- Last Will and Testament: Makes sure your assets go where you want after you pass.
- General/Financial Power of Attorney: Makes sure someone has the authority to act on your behalf for financial and business matters if you are ever incapable of doing so.
- Healthcare/Medical Power of Attorney: Makes sure someone has the authority to act on your behalf for healthcare related matters if you are ever incapable of doing so.
- Living Will/Healthcare Directive: Makes sure your end-of-life healthcare preferences are honored if you are incapable of communicating such.
- LaPOST/DNR: Makes sure all healthcare providers are aware of your end-of-life healthcare preferences if you are incapable of communicating such.
- Appropriate Financial Account/Asset Registrations: The proper registrations of financial accounts can make things go smoothly and according to your wishes.
- Beneficiary Designations: Makes sure your non-probate assets like retirement accounts, life insurance and annuity policies, and transfer on death accounts transfer to primary and contingent beneficiaries.
If you have not already secured these important documents, or if it has been a minute since you reviewed them, reach out to your personal estate attorney to get the process going. After finishing the process, we find that clients have a weight lifted from their shoulders knowing their affairs are in order and prepared for the unthinkable and, ultimately, inevitable.
Just do it!