We lost an amazing artist last month with the passing of Aretha Franklin. But it was shocking to me that she died without an estate plan or even a basic will. And she had been ill for some time. Many people are reluctant to make estate plans because they don’t want to face the reality that they will someday die. Howard Hughes, the famous millionaire recluse, hated three things: the government, his family, and lawyers. His lack of planning meant those three got most of the money. In fact, it took 34 years to settle his estate. I am sure some lawyers made a lot of money probating his estate.
Most of us do not have large estates but that doesn’t mean you shouldn’t do some planning.
First, understand how property passes when you die; First, ownership, when an account or piece of property is owned with someone else (Think owning a bank account jointly with a spouse). Second, beneficiary- retirement accounts and annuities will have beneficiaries. And finally through a Trust which is really a form of ownership. Anything that doesn’t transfer in one of those ways, will go through the will. If you don’t have a will, the state has a statutory will for you. You may not like their rules. It will include your spouse, children, and even surviving parents, even if you don't like them anymore.
A will also designates who you want to represent you after passing. In addition, you can name who you would like to take care of your children if they are minors. You can also make special bequests to people and organizations.
One of the most important documents that everyone should have are “Powers of Attorney” for both medical and financial affairs. These allow someone to act on your behalf if your incapacitated. You see, when you are dead, the law is very clear when you don’t leave instructions. But when you are still alive but not able to speak or act, the law becomes less clear and a lot of confusion can ensue. Do your family a favor and get powers of attorney drafted. If you have a simple situation, there are easy to use forms you can download online. Make sure you are very clear as to what procedures you want or don’t want should end of life care questions arise.
My final recommendation is not to keep these documents secret. Give copies to your children, family members, medical and financial professionals. You want someone to have them handy should it be required. Show some R-E-S-P-E-C-T and get some peace of mind.