Many people believe that estate planning is only for people who are particularly wealthy, have elaborate schemes in mind for passing their money to their heirs, or for people who are acutely ill and contemplating their death. This could not be farther from the truth!
Estate planning is for every husband, wife, mother, father, grandparent, business owner, professional, or anyone else who has someone they care about, are concerned about providing responsibly for their own well being and for the well being of those they love, and for anyone who seeks to make a difference in the lives of others after they’re gone. Estate planning is not “death planning”; it’s “life planning”, and an essential and rewarding process for individuals and families who engage in it.
When done properly, estate planning requires that a highly trained individual lead you through one or more in-depth meetings to uncover your hopes, fears, and expectations for yourself and for those who are most important to you. This process almost always requires the preparation of several sophisticated legal documents, but those documents themselves are not “estate planning.” Planning is a process, represented by a complete strategy that is properly documented and maintained by a professional who has taken the time to get to know you, and who is committed to continuing to serve you.
Revocable Living Trust
Perhaps the most common type of trust is the revocable living trust. As the name implies, revocable trusts are fully revocable at the request of the trust maker. Thus, assets transferred (or “funded”) to a revocable trust remain within the control of the trust maker; the trust maker (or trust makers if it is a joint revocable trust) can simply revoke the trust and have the assets returned. Revocable trusts can be excellent vehicles for disability planning, privacy, and probate avoidance.
Advance Directive for Health Care
An Advance Directive for Health Care allows your trusted friend or family member to make medical treatment decisions for you if you are unable to communicate your wishes to doctors. Without one, you must have a guardian or “conservator” of your person appointed by the court before decisions can be made on your behalf.
An Advance Directive for Health Care not only saves precious decision making time, but it also makes sure that the individual you trust the most has the power to make these most important decisions for you if you are unable to make the decisions on your own.
Durable Power of Attorney
Who will make decisions for you if you are unable to make them for yourself? Who will have the power to sign documents on your behalf, or make sure your bills get paid?
Without a durable power of attorney, someone who is mentally incapacitated must be taken to guardianship or conservatorship court to have a decision maker named for them by a judge. A carefully written durable power of attorney will allow you to name someone you trust to make decisions for you if you become disabled to the point of no longer being able to make those decisions yourself.