Every adult needs an estate plan, whether you are 18 or 108. If you don’t take the initiative to properly plan your estate, the state has a plan already made up for you. So, it is imperative that you take the necessary steps to set up your estate plan so that your wishes regarding your care and the care of your assets are carried out.
Wills and Revocable Living Trusts
Where will your assets go when you die? Who will manage them to ensure they go to the people you want them to go to?Wills and revocable living trusts are the foundations of a sound estate plan after your death. While there are some important differences between a Will and a revocable trust, generally, they both serve the same purpose: they allow you to direct how your assets will be distributed to the people (or organizations like charities) you care about, and to appoint who will make important decisions to accomplish your goals.
Health Care Directives (“Living Wills”)
A Health Care Directive (or “Living Will”) deals specifically with “end-of-life” decisions. If it’s been determined that your condition is “incurable”, you – not someone else -direct whether you want to maintain or turn-off life sustaining treatment. This is a very sensitive issue so in-depth contemplation is necessary but a health care directive is not only reflective of your wishes, but helps ensure that your decision is also legally enforceable.
Health Care and Financial Durable Powers of Attorney
While it is important to plan for events after your death, you also need to plan for those that occur during life. Who will make decisions on your behalf if you are unable to speak for yourself? Although this is a difficult question to consider, and even more difficult to answer, failing to plan for mental or physical incapacity can result in court involvement, causing stress and expense to your family. This is where having durable powers of attorney is vital to a comprehensive estate plan.
A health care durable power of attorney allows you to provide instruction regarding health care treatment, including designating those people who have access to your medical records. Because even the healthiest person could experience a sudden accident, health care powers of attorney are important for young and old alike. A health care power of attorney (at least in Washington) also allows you to plan for the disposition of your remains after your death (burial or cremation, organ donation, etc.); a Will doesn’t (or shouldn’t) do that.
A financial durable power of attorney, on the other hand, appoints someone you trust to act on your behalf with respect to legal and financial matters. This person would have authority to, among other actions, pay bills, file taxes, and transfer property on your behalf and for your benefit. Because of this, financial powers of attorney are very powerful documents and can be abused. So, you may want to restrict the document so that your agent will have neither too much nor too little power over your well-being in the event that you are incapacitated by illness or injury.
“Complex” Estate Planning
While the documents described above are necessary for any estate plan, sometimes other factors need to be considered, such as succession planning (passing a business to your descendants), asset protection, and tax planning. Chris has assisted many individuals and families in this process by utilizing more complex tools such as irrevocable trusts(of which there are many types) and charitable foundations. There is no “one size fits all” formula as each person and family is different. However,by consulting with Chris, you can take the steps necessary to address your concerns and initiate a comprehensive plan to reach your goals.