When you are planning for the future, you have no way of knowing when an emergency may arise. You have no way of knowing when or if you will need someone to make financial or medical decisions on your behalf, and if you die, you have no way of knowing how your assets will be divided, if you do not have the proper estate planning documents in place.
Planning ahead is the purpose of every meeting with an estate planning and elder law attorney. You are looking to protect yourself and your loved ones and create instructions for the courts to follow.
Moderator Scott Trout hosted Estate Planning With Purpose: TuckerAllen Town Hall, featuring a panel of estate planning and elder law attorneys from TuckerAllen offices in Missouri, Illinois, and Kansas.
This discussion highlighted the importance of having a complete, current, and comprehensive estate plan that uniquely fits your life and circumstances.
“A complete estate plan needs to include Power of Attorney documents; both for health care and financial, a living will, a HIPAA release, a last will and testament, and a trust,” TuckerAllen attorney Ryan Foley said. “In most situations, you also are going to want a beneficiary deed, as well.”
Power of Attorney
“A durable Power of Attorney, or financial Power of Attorney, gives someone the right to make decisions for you if you become incapacitated,” TuckerAllen attorney Missy Shands Manning said. “This comes in handy if you need someone to pay your bills or sell your house. Similarly, a health care Power of Attorney nominates someone to make health care decisions on your behalf.”
Nominating an agent to be in charge of making these types of decisions on your behalf is choice that should be made with thought and purpose. The decision on who to nominate as your Power of Attorney is one that can impact your physical and financial well-being, and you want to put some consideration behind your choice.
“Think of someone who shares the most similar values to you and would make the same decisions as you would, in regards to your health and your body,” TuckerAllen attorney Teresa Yao said. “You may have a different agent for your financial Power of Attorney than your health care Power of Attorney, and that’s totally OK.”
You may have different people in your life that you wish to nominate for these different functions in your estate plan. Similarly, estate planning documents like a will and a trust function differently but offer value to your overall plan.
Wills and trusts
“I like to think of a will as an instruction sheet to the probate judge saying ‘Hey, if I have any assets that need to go through probate, probate judge, this is what I would like you to do with them,’ ” Ms. Yao said.
However, you may look to trusts, in order to avoid aspects of the probate process altogether.
“I like to think of a trust as a basket,” Ms. Yao said. “When you go ahead, do your homework, and place the assets you want placed in this basket, anything you place in the basket is not going through probate, which is a lot more efficient administration and you no longer have to deal with the downsides of probate.”
The probate process
While there are positives to the probate process in its function to authenticate your wishes expressed in a will, probate adds legal fees that get taken out of the estate and can be lengthy.
“Missouri actually requires that you have to have an attorney carry you through, so that’s statutory fees just to administer assets through the probate process, depending on the size of your estate” Ms. Yao said. “That’s significant time and costs that you can save by preemptively creating a trust instead.”
Consequences of a lack of estate plan
Having these documents in place is an essential aspect in planning for the future. If you do not have these estate planning documents created, it can add legal, medical, and financial complications for your loved ones.
“Generally, if you don’t have a Power of Attorney in place, the court is going to step in,” TuckerAllen attorney Kevin Mason said. “There’s going to be a hearing and a process, and at the end of that process, the court is going to appoint someone to make financial decisions for you.
“If you don’t have a health care Power of Attorney in place, you are subject to the list that each state has, which offers a hierarchy of people that would be making decisions for you. “
Dying intestate means dying without a will in place. With a will being an essential part of your estate plan, it is too important not to meet with your attorney and create.
“Each state has its own intestacy rules,” Mr. Mason said. “If you die intestate, there will be a lot of court proceedings, and they have list, which offers a hierarchy of people to enact a division of assets.
“Your spouse, your children, your nieces and nephews are on the list, and as we get more remote with people that are related to you, it is referred to as heirs-at-law, as we branch out further. The court is giving money away to people, and there’s no choice on your end on who gets what.”
Participate in the process
By participating in the estate planning process, you are ensuring that your loved ones are informed of your wishes and are given the power to make decisions on your behalf if you are unable.
You are creating a lasting legacy, empowering the courts to divide your assets the way you want them divided and preventing regulations from deciding the fate of your life’s work.