The time is NOW to think about Estate Planning
“All we have to decide is what to do with the time that is given to us.” This quote, taken from the Lord of the Rings novels by J.R.R. Tolkien comes when the main character, Frodo Baggins, is faced with a daunting task of leading his close companions on a perilous task to save the world as they knew it. While this quote can have many deep meanings, it reminds me of the importance of planning for the unexpected. Frodo, unsure of what was on the horizon, was reminded by his companion Gandalf that while we are unsure of the future, we have the power right now to decide what to do with the time that we do have. Growing up, I pictured estate planning as the rather dreary process of establishing a will that ultimately provided instructions as to the final disposition of one’s estate, or everything one owns. But when I was finally exposed to the topic of Estate Planning in my academic studies and throughout my preparation for the CFP exam, then I truly understood its deep significance and how the estate planning process encompasses so much more than I initially imagined. Even now, as a recent college graduate without dependents, I understand that while I may not “need” to have an estate plan prepared any time soon, the amazing benefits and peace of mind it can provide in the present-day and in the future make it worth the effort. Below are a few reasons why beginning to think about, prepare, or even update your estate plan NOW can both provide peace of mind in directing even more of what will happen upon your death or incapacity, and also ensure that your goals and passions while living can be achieved after death.
Ensure that your goals and passions while living are considered
Throughout life, we all have hopes and dreams that we strive to accomplish before we pass over the rainbow bridge. In working closely with a trusted estate planning attorney to complete an estate plan, you have a firsthand say that in ensuring that your hopes and dreams are at the forefront of any decision made in regard to what happens to your estate at death. Take the recent death of the famous musician, Prince, for example. Prince died without a valid will and with an estate estimated to be worth over $300 million. While many were inspired and impacted by his music, it’s unlikely that the intestacy statutes will do much to fulfill Prince’s goals and passions he had while living in the distribution of his estate. Had he worked with an estate planning attorney and prepared his estate plan he could have ensured that his inspiration would have continued far beyond his short existence in this life. A valid will or trust can ensure that your assets flow to individuals, organizations, or to causes that are near to your heart and that you believe will help define your legacy.
Control the disposition of your assets after death
Proper estate planning means that the assets left at the end of your life will be distributed where you intend. Even though the probate court has the intestacy statutes to decide uniformly how to divide and distribute your estate when there is no valid will, planning ahead and communicating with potential heirs and interested parties can help mitigate potential conflict and other stresses. As part of my undergraduate studies, I read the book, “Beyond The Grave”, by Gerald and Jeffrey Condon. It truly opened my eyes to the myriad ways in which real-life estate planning decisions regarding where or with whom we leave our assets after death can impact our family and other loved ones during their lives. Scenarios range from protecting one’s inheritance from a spendthrift child’s potential dissipation to resolving conflict where children feel they are receiving unequal shares. Having the ability to control and direct the disposition of your assets and also taking the time to analyze how each decision may impact your overall goals and desires can eliminate, or at least mitigate, potential problems that could result from the lack of a will. This book helped me realize that there are many issues to consider when preparing an estate plan, but in the end, having that ultimate control is essential to achieving one’s ultimate end-of-life goals.
Care for loved ones in your life
Through proper planning, we can also ensure that our loved ones are cared for when we are no longer there. Parents should consider and appoint a legal guardian to care for their minor child or children in event of their death. Making this decision NOW not only alleviates stress from the parent’s perspective by deciding exactly who will care for their children, it also takes this very personal and very important decision out of the hands of an anonymous probate court judge, who ultimately may not act in alignment with the true desire of the parents. Another important member of many families to consider, making it pertinent to the estate planning process, are pets. While I had the incredible opportunity to grow up with a loving dog for over 13 years, I never thought of what would happen in event that my family was no longer around to care for it. Pet owners can opt for “Pet Trusts”, which direct the care and maintenance of one’s pet(s) in event of the owner’s death or incapacity. While certainly there is an option to just grant a certain amount to a family member in one’s will with a provision that directs them to use a specific amount of their funds for the care of the pet, this provision is not enforceable, meaning that there are no legal repercussions if the assigned family member uses designated funds for other things. Even if making this kind of decision for a pet may be often overlooked, taking the step of establishing a pet trust can provide even more peace of mind.
Have a plan in place in event of sudden incapacity or being unable to make your own decisions
For health care decisions, you need a living will and power of attorney for health care (called a health care directive in Minnesota). They ensure that you will have a system in place that will allow individuals of your choosing make decisions on your behalf with the goal of keeping your personal desires and wishes in mind.
Traditionally, these two basic kinds of health care documents were related but different. First, there was a document naming a trusted person (health care agent) to direct your health care if you are unable to do so yourself. This document is commonly called a durable power of attorney for health care. Second, there is a document setting out the types of medical treatment you would or would not like to receive in certain situations. This document is often known as a living will. In Minnesota, however, these two documents are combined into a single form called a health care directive. When choosing your health care agent, the most crucial criteria are trustworthiness and dependability. This person should be good at asserting your health care wishes if others argue against them.
A durable power of attorney (POA) is another important document that allows you to appoint an individual to make financial decisions on your behalf. This can range from anything to paying bills, to investing their money. Absent a power of attorney, a court may be left to decide what happens to your assets (if you are found to be mentally incompetent). The court’s decision, of course, may not be what you wanted. This type of POA is revocable by the principal at a time of his or her choosing, typically a time when the principal is deemed to be physically able, deemed mentally competent or upon death.
While the idea of estate planning can be a difficult topic to broach, the benefits of planning ahead lets you achieve your goals after death, have complete control in selecting the ultimate recipient(s) of your estate, care for those you are no longer able to care for, and allow others to step in event of incapacity. Having an estate plan prepared can mean the difference between leaving or not being able to leave behind the legacy we hope to leave in this world. “All we have to decide is what to do with the time that is given to us.” That’s why the time is NOW to think about estate planning.
