What If....Estate Planning Considerations Part I

Premature Aging

There are little things that make me realize that I am no longer in my 20s. Heck I'm almost out of my 30s; and yet, most of the time I don't feel like I'm getting older. That is, I don't feel the years until I meet a mom much younger than I am who has kids the same age as mine; or I make a comment about a movie or music or style from the 90s to someone who has no clue what I'm talking about because she or he was just a toddler then; or I glance in the mirror and see all the gray strands in my hair; or I'm reminded of the mortality of us all and how fleeting youth truly is. Then, I feel older.

A New Perspective

A few weeks ago a friend of a friend suffered a heart attack He is only 42 years old. He has a wife and three young kids. He is the primary breadwinner of the family. Thankfully, he survived and is recovering while making big changes in his diet and exercise routines.

It certainly makes one think about the "what ifs" of life, specifically "What if I die when my kids are still young", "What if I die before my estate is in order" and "What if I am disabled and become dependent on my spouse and kids."

Estate Planning Terms

These questions and others can be answered with a little research and planning. We all know we should have a will, but whether we all do have a will is another story. Getting a will drafted by an attorney is the most error-proof method of going about setting out your last wishes, but can also prove to be costly. In fact, it may prove to be outside the realm of your budget, especially during this economic crunch. You can find a more detailed article on wills and trusts here.

Here are other legal terms that are important to know and understand regarding estate planning:

Advance Directives:

An advance directive takes effect when one becomes incompetent and designates someone to make decisions for healthcare issues while the person is incompetent. The Uniform Health-Care Decision Act of 1993 states that a power of attorney for health care must be in writing and signed by the person making the designation.

Unless otherwise stated, an advance directive is in effect only upon incapacitation and ceases when the person regains capacity. The agent designated as stand-in decision-maker must follow any relevant instructions provided, if in the patient's best interest.

Also called: directives, healthcare proxy, power of attorney for healthcare

Living Wills:

This is an instrument, signed with the same formalities as is statutorily required for a last will and testament, allowing the person to give instructions as to whether he or she would like his or her life artificially prolonged by extraordinary means when there is no reasonable explanation for recovery from extreme mental or physical disability.

Also called: declaration of a desire for natural death, directive to physicians

Power of Attorney:

A power of attorney is an instrument that grants a person authority to act as an agent or attorney-in-fact for the grantor. An ordinary power of attorney is revocable and terminates upon the death of the grantor. There are different types of powers of attorney documents, which I will elaborate on later this week.

Guardian:

A guardian has the legal authority and duty to care for another's person or property due to the infancy, incapacitation or disability. A guardian may be appointed for general purposes or specific purposes. Again, there are quite a few of different types of guardians. I'll go into more detail about guardians later this week.

Also called: conservator

These definitions come from Black's Law Dictionary, Ninth Edition

The Scoop

This week I will be discussing more about the issues surrounding these terms and more. The key is to be prepared if illness, accident or other catastrophic event occurred. It's not difficult to get up to speed on these time and heart-ache saving documents. It may take a little money, but if you can't afford it, which many simply cannot, then you can always search online for state specific forms and examples. If you can afford it, it's best to go to an attorney who specializes in estate planning.

Answering the "what ifs" will give you peace of mind that your family will be provided for  and you will cared for in the way you wish and in the event of incapacity Over and out...

Anna

Comments

[Tina]

Thanks so much for posting this. This is a subject my husband and I have been putting off. I know it is silly but the single issue of who will care for our kids leaves us avoiding taking care of this. I look forward to reading more and take a leap to do this finally. Any tips on how to go about choosing a good estate planning attorney?

[Tina]

One other thing that has me spinning in circles is the difference between a will and a living trust. Is one better than another or do you have both?

[Kelli]

Great information. My parents (in their early 70's) and both with cancer had none of this in place. It was such a hard position to be in as my Mom's health suddenly declined.

It is a gift to give our children to make these decisions ahead of any circumstances that may arise.

[Heidi]

This is such a great topic to get people thinking, especially YOUNG people like us with kids. My parents have everything in place and all things paid up. All my sister and I have to do is go to the file in my dad's file cabinet that says, "When We Croak". I'm tempted to make a similar file. Thanks for the additional push.