Recently the news has been filled with the discussion of who is in the 1% and who is in the 99% of the distribution of wealth in this country. However, when it comes to your estate planning, what percent are you in?
A recent newsletter pointed out that only 51% of Americans have any estate planning documents! 35% of the population was reported as having wills, and 29% was reported as having powers of attorney. No reporting was available relating to healthcare directives (living wills).
As part of our estate planning consultation with our clients we normally recommend preparation of a will, a durable power of attorney and a healthcare directive. A will not only allows you to provide for the distribution of your assets to those beneficiaries that you choose, but it also gives you the opportunity to appoint the person or financial institution who will serve as executor under your will as well as an alternative if the selected executor is unable to serve. In addition, you can appoint a guardian for your minor children through a will. If you do not have a will, you risk unwanted and inappropriate results in the distribution of the assets of your estate, and in the selection of the administrator of your estate and guardian of your minor children.
The durable power of attorney allows you to appoint a trusted agent to act on your behalf to make financial decisions for you during your lifetime if you become incapacitated, as with the will you can also name an alternate if your chosen agent cannot serve. Your agent may be a favored family member, friend or a financial institution. If you fail to prepare a power of attorney, your family members may be compelled to seek the appointment of a legal guardian for you through court proceedings, which can be complicated, contentious, costly and time consuming.
Neither a will nor a power of attorney can be put in place if you lack sufficient legal capacity to understand and execute these documents. Now is the time for you to act while you are capable of making your choices and decisions known.
Finally, an advance health care directive (also known as a living will) should be considered by everyone. The purpose of this document is two-fold. First, you can appoint an agent to make healthcare decisions on your behalf if and when you lack sufficient capacity to make such decisions yourself. Second, you can provide specific instructions in advance about what treatment should be provided, withheld or withdrawn if you are determined by your physician to be suffering from a terminal condition or from a condition of permanent unconsciousness, and if you then lack the ability to communicate your decisions about these issues.
No one looks forward to confronting these issues, and while you may be uncomfortable with coming to grips with your own mortality, we urge you to consider your family and friends who will survive you and who will be deprived of the benefit of knowing your wishes, if you choose not to act in this regard. Your choice to act in the preparation of these estate planning documents could make a huge difference to your loved ones, and the cost of preparing these materials could easily be eclipsed by the costs and expenses that could be incurred if no estate planning materials are available when needed.
If any or all of these documents are of interest to you, you should seek the advice of a trusted advisor, such as one of the estate planning attorneys at Hamburg, Rubin, Mullin, Maxwell and Lupin.