“Estate Planning” is boring. But what’s the alternative?

Did you ever worry about your parents dying and leaving you all alone? No? Just me? Ok……

Thinking about dying is one of those morbid things we do, but no one likes to talk about it. We talk about planning before/during/after a baby is born and enters the world, but it’s almost taboo to talk about preparing for how we are going to exit. But it could cost your family thousands of dollars and months of their time if you don’t prepare for it properly. So what is “Estate Planning?”

Estate Planning = making sure you have legal documents in place to ensure your assets go to the desired people, and you are treated in the way you want to be. So what do you need for this to happen?

adult hands key to child

Will

A will allows you to choose who receives your assets when you pass away, but also who looks after your children should they still be minors. If you want to understand what happens when you die without a will, read the stories of celebrities who died without a will.

If you die without a will, it is called dying intestate which means that the state in which you lived gets to decide what happens to your assets. If you have more than one person in your family, this will take a long time and your heirs will have minimal control over where your assets end up.

 

Power of Attorney for Health Care (POAHC)

A Power of Attorney for Health Care (POAHC) gives an agent the ability to make health care decisions on your behalf, and you can direct them as to what type of care you desire. For example, if you do not want to be kept alive on a ventilator, you can state that the agent makes this decision when the time comes. A doctor will most likely keep you alive for as long as they deem viable (in part due to the Hippocratic oath), and their decision will be the driving one if there is no designated, legal agent in place.

   


 

Power of Attorney for Property (POAP)

A Power of Attorney for Property (POAP) addresses how you want your assets to be treated. Should you not be able to make decisions by yourself, the person you designate to act for you (your “agent”) will be able to make decisions in your best interests on your assets. This can include selling your house to pay for medical bills, moving money between accounts, buying/selling investments and anything else related to your assets.

 

HIPAA Release

HIPAA (Health Insurance Portability and Accountability Act) prevents your health information from being shared with anyone without written authorization. Even if you were to enter hospital (not as a minor) and be unable to make decisions for yourself, a doctor is legally not allowed to share your records with anyone – even family members. With a drafted HIPPAA release, the doctor is allowed to discuss your situation and details. For those being named as agents in a POAHC document, it is essential that they be allowed to discuss your medical history and records with a doctor to make an informed decision on your behalf.

 

Revocable Living Trusts

A Revocable Living Trust can hold assets (house, accounts, cars) but is not suitable for everyone. If you have a house and a small amount of assets, then it might not be suitable. However if you own houses in different states, or have investment accounts in the mid-six figures, then a trust might be of benefit. While they hold minimal benefit while you’re alive, when you pass away you can avoid the costs and delays of probate and keep your estate private when you die.  A trust streamlines the process as your assets are transferred to your heirs, and can prevent multiple unforeseen headaches. Probate can take months and cost thousands of dollars, but by implementing a trust, these issues are removed.

So while you may not feel much benefit from these things while you are alive, knowing that your loved ones will be empowered in making tough decisions, or having these decisions now being made easier, is worth the cost. Right?