Certain truths we know. We will not live forever. For this reason, you need to have your estate in order so that it can properly pass to your intended heirs upon your demise. Also, you need to make sure you have addressed a few other key issues:
- Avoid Probate
- Have a Durable Power of Attorney
- Have a Healthcare Power of Attorney
- Make sure your Assets don’t go to your children’s creditors or your children’s ex-spouse
- Appoint a Guardian over your Minor Children
A proper Estate Plan covers each of the above points and is not a high cost proposition. The issues, however are critical. If you have a Revocable Living Trust with a Pour-Over will and your assets are properly funded into the Trust before you pass away, your estate will avoid the Probate Process. Probate is not the end of the world, but it takes time, costs money and all filed documents are public. By utilizing a revocable living trust you can avoid this process. Is a Trust expensive? The answer is “No.” The same planning and analysis that we must do for a will occurs when we do a Trust and Pour-Over Will. It’s just a different form of document used and there is some necessary work effort needed in making sure you know how to fund the trust while you are living.
The Durable Power of Attorney is the document used to appoint your spouse or a trusted relative or friend to act for you when you are incapacitated. We also appoint a successor trustee in your Revocable Trust to accomplish this task. Without taking these steps, if you are living and incapacitated to the extent you cannot act on your behalf, your family is then forced to go to Probate Court and have a Conservatorship created for you. This is a costly, untimely and unnecessary situation that can be avoided by taking the proper planning steps.
The Healthcare Power, which is sometimes called a “living will” or “advance directive” is the legal document you utilize to appoint someone to decide what actions are to be taken in connection with preservation of your life in circumstances where continued care is in question. Of course, this is nothing we like to think about on a daily basis, but it’s an important to address in advance of the time in which such questions arise.