In 2008, Congress recognized the need for the public to understand the benefits of estate planning by passing House Resolution 1499, which designated the third week of October as National Estate Planning Awareness Week. Nevertheless, even though 76% of adults view estate planning as important, a 2019 survey carried out by Caring.com shows that 57% of adults in the United States have no estate documents prepared, including wills or trusts. Many of the respondents ascribed this to procrastination, but many others mistakenly believed they didn’t need an estate plan because they did not have many assets.
Why should you have an estate plan?
An estate plan can give you peace of mind by ensuring your assets are protected, plans are in place if you lose the ability to manage your affairs, and your property is passed down according to your wishes.
What key topics should you consider?
- Do you have a Revocable Living Trust or a Last Will and Testament based estate plan in place? Preferably you have a Revocable Living Trust based estate plan, but if you do not have either of these important documents on hand, state law will determine who inherits your property and the process may not occur in the way you would have chosen. In addition, someone appointed by the court, instead of a trusted person of your choosing, will assume care of your children, assets, or pets. Clarifying your wishes in a will or trust can prevent confusion, anxiety, and expense for other family members when you are gone.
- Prepare your powers of attorney. A financial power of attorney will let you designate the person who will make financial and property decisions for you if you become incapacitated. A medical power of attorney enables you to designate a person you trust to make medical decisions for you if you can’t speak for yourself.
- Make sure that you have an advanced directive, also called a living will, which documents your wishes concerning your end of life care, such as whether you would like to receive life support if you are in a vegetative state or terminal condition.
- Do you have insurance? If you become incapacitated or die, your family or loved ones should have information about your insurance (such as life, health, disability, longterm care, etc.) so that claims can be filed.
- Compile a list of all of your accounts and other important information, including bank and investment accounts, titles to vehicles and homes, credit card accounts or loans, digital accounts (such as Facebook, LinkedIn, and Twitter) and passwords, Social Security cards, passports and birth certificates, which may help others to manage your property or settle your estate once you are gone. This information should be kept in a safe place and shared only with those you trust.
- Keep a clear list of legal, financial, and medical professionals who have performed services for you. Include their contact information so your family can reach them if their help is needed after something happens to you. Make sure HIPAA authorizations are in place with medical professionals so your family members can obtain needed information.
How should you encourage your family members to create an estate plan?
Estate Planning Awareness Week reminds us to take steps to make sure our own estate plans are in place, but it also encourages us to talk to family members, especially elderly parents, about creating an estate plan. Estate planning is often a difficult topic to broach because it brings the unpleasant topics of aging and death to the forefront of our minds. Here are a few tips to help you start the conversation.
- Be sensitive to your family members’ feelings. Use your empathy and talk first about the need to plan for an illness and to provide instructions in the event your loved one becomes too ill to communicate with doctors or handle financial matters for themselves. The conversation can then progress to the importance of having an estate plan that will transfer their assets in the way that they wish, provide for the care of dependents or pets, and minimize any taxes, court costs, and legal fees. Explain that you are not trying to control their decisions, but only want to ensure that their own wishes regarding their medical care and their property are known, and their instructions are in writing and can be accurately carried out.
- Involve other family members in the conversation. If you are planning to speak to your parents about the need for an estate plan, try to include siblings in the discussion to avoid the impression that you are trying to influence your parents’ choices. You and your siblings should emphasize to your parents that none of you are asking about what you will inherit, but just want to make sure that their wishes are carried out properly.
Talk to an estate planning attorney.
An experienced estate planning attorney can help you and your family members create a plan that can meet your needs and carry out your wishes, or help you update an existing estate plan. We can provide each family member with information about the options available to them, and we can help you put a plan in place that will prevent unnecessary stress, legal expenses and taxes, uneven inheritances, disputes between family members, and delays in passing life savings on to loved ones. Provide yourself and your family members with the peace of mind that comes with knowing that your plan is in place and your wishes will be honored once you pass away. Contact us today for an appointment.