Do I Really Need A Will? The Who, What, When, Where, Why and How of Estate Planning for the New Year

Posted Thursday, January 17, 2019 by Pivotal Law Group

Most Americans lack an estate plan, especially Millennials. Many people find even thinking about estate planning daunting. But, like any problem, it’s easy to approach by breaking it down into small steps. Here’s a straightforward checklist of why an estate plan is necessary and how to get started.

Who

“Who” means you and your family – the people who are important to you and impacted by your life. Spouses, parents, children, siblings, other family members, and close friends will all be impacted by choices you make in your estate plan.

There’s also the state, which has a default estate plan for everyone under what are known as “intestacy” laws. These laws provide for default transfers of your estate in the event you don’t have an estate plan. These can be counterintuitive, contrary to what you would want, or contrary to what your family would expect.

There are also the probate courts, which often become a battleground for family disputes over what persons without an estate plan would have wanted after they pass away or become unable to make decisions for themselves.

Lastly, there’s the IRS and state Department of Revenue, who collect estate taxes – which are typically larger in estates lacking tax planning.

What

What you need for an estate plan depends on the circumstances. It might include the following:

• A Last Will, probably the document most people think of first. This can control the disposition of your assets, designate guardians for minor children, establish trusts, and designate a personal representative (a/k/a executor) to administer your estate.

• Durable Powers of Attorney for Finances and Healthcare – these designate an agent, usually a trusted family member or close friend, to make decisions on your behalf in the event you are unable to do so, for instance, due to a medical condition.

• Healthcare directive – provides your family guidance about your wishes if you are in a terminal unconscious condition.

• Burial instructions and Organ Donor Pledges – tell your family how you want these sensitive subjects handled.

Besides these basic documents, there are other tools at your disposal depending on your plan and objectives. Community Property Agreements can be important to designate respective spouses’ ownership interests. Some assets, such as real estate or financial accounts, can be titled to give your heirs survivorship rights, bypassing probate entirely. Retirement accounts like 401(k)s or IRAs allow you to designate a beneficiary. These are all part of the constellation of tools you can use to implement your goals.

When

Now. Even if you’re young, it’s wise to consider issues like what happens when you die or are unable to make decisions for yourself. All too often, people pass away unexpectedly leaving their family to deal with the confusion and potential conflict of not knowing what they wanted. Or, medical emergencies, in the absence of an advance plan expressed in a Durable Power of Attorney and Healthcare Directive, can lead to the same issues.

Where

The obvious answer is an estate planning attorney’s office. But developing your estate plan also takes place outside a law firm. It involves your close family. It can also involve other professionals such as CPAs or financial planners.

Why

“Why do I need an estate plan?” The answer depends on your specific circumstances, but a high priority for many people is: certainty. An estate plan gives your family certainty regarding your wishes about fundamental issues like your life, health, and property.

When a person dies or becomes incapacitated without a plan, family members don’t know what they would have wanted. Would dad have wanted a nursing home or a live-in caregiver? Who should get the family home, jewelry or photos? Who should be guardian for the kids? Sure, mom wanted her grandkids to share her estate, but did she want the grandkids’ spouses to also share?

An estate plan answers these questions definitively and in advance. When your wishes are in black-and-white, your family doesn’t have to question or, often, fight over what you would have wanted. And it increases the chances that your wishes are respected after your death.

Besides certainty, estate planning has other advantages that may be important depending on your goals, such as minimizing tax consequences or avoiding public probate of your estate.

How

Know what you want: the best way to have an estate plan is to have a plan. Consider an organized financial plan and prepare a list of important assets. Talk to your spouse and close family to identify people you trust to serve as personal representatives, agents under a Power of Attorney, or guardians for minor children. Secure knowledgeable assistance from attorneys, CPAs and financial advisors.

Pivotal Law Group has provided estate planning advice in and around Seattle for decades. If you have questions regarding estate planning matters, contact Pivotal Law Group attorney McKean Evans for a free consultation.