There is a misconception that you only need an estate plan if you are extremely wealthy – this is simply not true. A sound estate plan is an integral part of any overall financial plan. An estate plan is the best way to ensure that those you love and care about will be taken care of in the way you want should something happen to you. A good estate plan will also ensure that you are provided for you in the way you want should you become incapacitated.
As such, if you have an existing estate plan that you haven’t reviewed in a few years, this is as good a time as any to dust it off and read through to make sure it still says what you want it to. If it doesn’t, you may want to consider revising your documents. If you don’t have an existing estate plan, maybe this is a good time to start thinking about putting one in place. To help you get the process started, the following ideas are among those you should consider.
In terms of taking care of yourself, who do you want to act on your behalf (general power of attorney) or make healthcare decisions (healthcare power of attorney) on your behalf if you cannot? In many cases this is a spouse or family member, but in any case, it should be someone you trust implicitly.
Have you given any thought to what you would want to happen if you end up in a persistent vegetative state on life support (living will)? Who will be able to speak with your doctor about your medical history or legally receive your medical records (HIPAA authorization)? Many times, it’s a good idea that your general and healthcare power of attorney are listed on your HIPAA authorization, but you may want to include other people as well.
From an administrative perspective, who do you think would be the best equipped, and willing, to go through the probate process with an attorney and make sure that the terms of your Last Will and Testament are carried out (executor)? If it makes sense for you to have a trust as part of your estate plan, who do you think is best equipped, and willing, to make sure that the terms of the trust are carried out (trustee)? If you have young children, who would you want to raise them if something happens to both you and your spouse (guardian)?
If you already have an estate plan in place, you may realize when you review your documents that the people you selected for these roles no longer make the most sense. It could be that someone you selected for one of these roles has passed away, or moved across the country, or perhaps another more “qualified” person has come into your life since drafting your existing plan. In any case, it’s a good idea to have a first, second, and third choice for these positions, and it’s also a good idea to talk to them about the role they might be called upon to serve.
When thinking about taking care of the people you love and care about, there are other things you may want to consider. Among the countless things to consider are specific gifts to specific people. For example, if your current plan says “I leave $X to my Uncle Joe,” does your current plan call for that $X to be inflation adjusted for the future? Do you still want to leave anything to your Uncle Joe, and is he still alive?
When you drafted your original plan, you may have had young children. Now, your young children may be grown up with young children of their own. Do you want to leave anything to your grandkids? Perhaps now you’ve come across charitable endeavors that you may want to support, do those have a place in your estate plan?
When thinking about an estate plan, these are some good questions to help get the thought process started, but these questions should not be the end of it. It’s important to remember that your estate plan can be as customized as you want it to be. We can help you start thinking about these and other ideas, and we are more than happy to put you in touch with a great attorney who can dive all the way in with you and help you create and draft the perfect estate plan for you and your family.
Disclosure: I (Frank Yozwiak) am an attorney, I am licensed to practice law in Illinois and Kentucky, and I used to practice in the areas of Estate Planning and Tax Law (i.e., the cool kind of law). While I do pay my annual dues to keep my licenses, I am no longer practicing law. None of us at Ballast practice law, and we do not draft estate plans.