What are the “Estate Planning Basics” and how do I prepare for a meeting with an Estate Attorney?

Ted BraunJanuary 5, 2017

Estate Planning

Some of the most common phrases heard from clients when discussing the importance of estate planning are: “My kids will figure it out”, “It’s on our list, just not a priority right now”, and “Everything will just go to my spouse, right?” Every year there are more and more high-profile examples of why it is so important to have the appropriate estate planning completed. Just last year it was the battle over the estate of singer Prince and billionaire media mogul Sumner Redstone.

While these high-profile cases provide public examples for us to consider, the lack of proper estate planning affects everyone, not just the “rich and famous”. Estate planning can be time consuming and in some cases very complex, but there are some very basic documents and techniques that can and should be taken to help protect you, your family and your best interests.

Too often estate planning is thought of solely as a way to pass money and/or property to heirs. Yes, this is one significant aspect of estate planning, but not the only aspect. Some of the most important parts of estate planning have nothing to do with the transfer of wealth or property but rather your own well-being or livelihood in the event of some type of incapacitation. Incapacity is different than disability and is defined as the “absence of a legal ability to act”, for example; a minor or elderly individual with any type of severe mental dementia.

Without the proper documents in place, you leave yourself open to having your estate dismantled and or distributed according to state law by a court appointed executor. Outlined below are some of the most basic forms of estate planning that can help you protect yourself and your family.

Living Will or Advanced Directive: A living will is one of the most basic forms of estate planning and can provide families with peace of mind during an incredibly difficult time of severe illness. Used most often only in very specific circumstances, a living will provides direct instruction from a patient to their doctor. By eliminating the need for a surrogate decision maker, there can be no question as to the actual wishes of someone who is being kept alive by some form of life-support.

Springing Durable Power of Attorney (DPOA): A springing durable power of attorney appoints someone of your choosing to make important financial and legal decisions for you in the event of incapacitation. The term “springing” is important when creating this document as this ensures that this type of POA only takes effect when an individual becomes incapacitated. POA’s can be drafted to be limited in nature to specific financial and or legal decisions or to be all-encompassing.

Durable Power of Attorney for Health Care (DPOAHC):  A DPOAHC is similar to a regular POA in that it appoints another individual to make decisions for you in the event of incapacitation, with the key difference being that the decisions are limited specifically to health care. The skill set required for the person you chose to appoint in a DPOAHC is different than those who you may appoint in a standard DPOA. While they can be the same person, it is important to consider the types of decisions your DPOAHC may have to make. This person will be making important health care related decisions for you in the event you are incapacitated.  Therefore someone familiar with medicine or medical treatments would be preferable.

Last Will & Testament: One of the stalwarts of estate planning, the last will and testament allows for the testator (person executing the will) to transfer specific property at their death in the manner in which they prefer, as opposed to the property transferring in accordance with state law. In addition to property transfers, it allows the testator to name specific guardians for any minor children and an executor to administer the estate. One of the biggest benefits is the ability to choose specific guardians and or representatives as opposed to a court appointing guardians or an executor.

Your initial meeting with an estate attorney will be much smoother and efficient by taking some time with your spouse, domestic partner or immediate family to talk through some of the key decisions discussed above. Talk about it with those you love, think about what your wishes are, what type of legacy you may want to leave behind and who you want to make sure is taking care of in your absence. In addition, a document that we often use in preparation for a clients meeting with their estate attorney is a high-level net worth statement inclusive of major liabilities, assets, ownership and any term-life insurance policies.

In some cases, the family conflict that arises following a bitter and contentious estate battle can be irreversible and lead to families breaking apart, just when they need each other the most. While no one likes to think about “the end”, those who do, and spend just a small amount of time preparing properly, can help ensure that their families continue to embrace and share all of the tremendous memories created together.