Estate planning is one of those things that’s easy to put off. We don’t like to think about death – particularly our own – so we put it out of our minds. “What’s the worst that can happen?” we ask ourselves. We’d like to think that the answer to that question is that, even if we didn’t create an estate plan, we’d be off the hook. We’d be gone, so we wouldn’t have to deal with the consequences.
This answer is partially true. When you die without an estate plan, you hurt those you love by causing them unnecessary confusion, expense, and delay in settling your affairs during an already emotional time. Not a great outcome, but not technically your problem.
But there’s a catch: Failing to create an estate plan can hurt you while you’re still alive.
Imagine that as you age, you start to develop Alzheimer’s. The disease progresses quickly, and before you know it, you can’t remember to pay your own bills, balance your checkbook, or manage your normal household chores — let alone keep track of all the doctor’s appointments and medications you’re now faced with. Someone has to step in and ensure your health and finances are taken care of. Without a comprehensive estate plan, someone needs to go to court to be appointed your guardian.
In the best case scenario, your family members agree on who should serve in this capacity. In this situation, the initial process takes some time and involves some court costs and attorney’s fees. It also means that your guardian is obligated to report to the court on a regular basis and obtain court permission before making certain decisions on your behalf. It also means that the public, including your nosy neighbors, knows all about your legal affairs.
But what if your family members don’t agree on who is best suited to serve as your guardian? Then the court process takes on a different character. Guardianship disputes can be time consuming, expensive, and emotionally exhausting for everyone involved. They often open old family rifts, and they can create new rifts that last a lifetime.
This isn’t what any of us want for ourselves or our families. How can you avoid the exhaustion and expense of a guardianship battle – not to mention the destruction of family relationships that can go along with it? One of the simplest things you can do is to be proactive. Create a comprehensive estate plan that anticipates not only your death, but also the possibility that you’ll become disabled during your lifetime.
Using a Revocable Living Trust, you can remain in charge of your assets unless and until you become incapacitated. If the need arises, a Successor Trustee chosen by you can step in and manage the Trust property according to your express instructions.
In addition to a Revocable Living Trust, you’ll want a Financial Power of Attorney. This lets you put a trusted person in charge of any assets not transferred into your Trust, ensuring that all of your property is managed according to your wishes and that none of your assets slip through the cracks.
You should also sign a set of healthcare documents appointing someone you know and trust to make medical decisions on your behalf and expressing your wishes for end-of-life medical treatment in the event you become incapacitated.
This type of comprehensive estate planning helps you avoid the worst-case scenario. It allows you to rest assured that, should you become disabled, your family members will not have to guess at your wishes. Instead, people you trust will be in charge of carrying out the plan you put in place for yourself.
By: The American Academy of Estate Planning Attorneys