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Estate planning is important for people of all ages, but as we age, the need for planning becomes even more critical. Many people avoid estate planning, because they do not want to think about the end of life, failing health or disability. Others believe that an estate plan is only for rich people. However, an estate plan is helpful for everyone regardless of their wealth.
A person’s estate is all of their property including real estate, accounts, vehicles, jewelry, and other personal property as well as any debts they owe. The term “probate estate” means all property in a deceased person’s name other than certain types of property which transfer automatically under the law or property for which a beneficiary has been designated.
Without an estate plan, it is very difficult to carry out a person’s wishes and can result in a long, drawn out, and expensive court process for the surviving family. If an estate plan is in place, it can provide peace of mind for you and your family, as well as protection for your wishes. Below are the documents that commonly make up an estate plan:
- Will. A will provides for a personal representative of the estate, who will take care of managing the estate, working with an attorney and an accountant, paying debts, and distributing property as specified in the will. A will’s distribution instructions can be as broad or detailed as a person wishes. In a will, beneficiaries and guardians for minor children should be named. It may not seem necessary to discuss minor children when discussing seniors and estate planning.
- Healthcare Power of Attorney. A healthcare power of attorney is also a key part of an estate plan. Through this document you give another person the legal authority to make health care and end of life decisions for you if you are unable to make them yourself.
- Financial Power of Attorney. A financial power of attorney names an agent who has the power to act in your place for financial matters. By having a financial power of attorney in place, the stress and expense of a guardianship can be avoided if you ever become unable to manage your finances or property yourself. It’s important to keep in mind that the personal representative named in your will can only act after your death. The agent named in your financial power of attorney can act while you are alive.
- HIPAA Authorization for Release of Medical Information. Under the federal law known as HIPAA (the Health Insurance Portability and Accountability Act) it has become virtually impossible for your family members to obtain your medical information or speak to your doctors unless you have completed and signed one of these documents.
- Authorization and Instructions for Final Disposition. Wisconsin now allows you to give legally binding instructions on how your body or remains are to be handled following your death, and where your remains are to be located. This document also allows you to appoint someone as your legal representative, with authority to make all necessary decisions for the final disposition of your body or remains.
- Revocable Living Trust. This is an alternative to a will-based estate plan. A properly drafted and maintained revocable living trust will allow you and your family to avoid probate, speed up the distribution of your assets, and maintain your privacy. Unlike a will, a revocable living trust is not filed with a court and therefore your wishes and your assets do not become part of a public record. Revocable Living Trusts continue to gain in popularity and are quite common today.
Having an estate plan is necessary if you wish to control what happens if you can no longer make decisions during your life, and if you want to control how your assets are distributed following your death. Contact our office for assistance in understanding and preparing the necessary documents for your estate plan.