Estate Planning FAQs
What is estate planning?
Estate planning is about being in control. It’s about making decisions today concerning your healthcare, your financial affairs and your assets that other people will follow in the future. Proper estate planning will:
- Assess your personal, family and financial situation
- Take into consideration your goals and desires for managing your future financial affairs, your future health care needs and for transferring your assets after death in a way that meets your goals in the most efficient and least expensive manner
- Result in estate planning documents tailored to your specific needs that will provide you and your loved ones with security for the future.
What should an estate plan include?
The documents in your estate plan should be tailored to your unique situation and goals. One size does not fit all in planning for your future. For example, some people need Trust Agreements to accomplish their specific goals and minimize probate expenses while others do not. As an experienced estate planning attorney, Sean Lemieux can assess your particular personal and financial situation to determine which estate planning documents are needed to meet your needs and goals. Some basic documents that used in many estate plans include:
Last Will and Testament
A Will is the document you use to direct what happens to your assets after your death – who gets what. You also use your Will to nominate the person to be in charge of seeing that your final affairs are wrapped up and your assets are distributed as you direct. If you have children, you may also use your Will to nominate a guardian for your children if your death were to occur while they are still minors.
If you do not have a Will, the state has laws that say how your property is distributed after your death. It goes to a lawfully recognized spouse, children, parents and other blood relatives. The law provides no protection for your same-sex or unmarried partner (or your friends or favorite charity). Without a Will, your partner will inherit none of your property. Even if you’ve had a commitment ceremony at your church, been married in a state that permits same sex marriage, or registered as domestic partners with your employer, the result is the same. Without a Will, your blood relatives, or the state if you have no blood relatives, will receive your property upon your death.
Durable Financial Power of Attorney
A Financial Power of Attorney is a document in which you appoint someone to manage your financial affairs if you become unable to manage them yourself. If you are ill or injured, who do you want to have access to your bank account to make sure your car payment is made, or the mortgage and light bill get paid? If you don’t have a power of attorney, it’s likely that a guardianship would be necessary to give someone the authority to take care of your financial affairs. The guardianship process is much more complicated and expensive. More importantly for some, the guardianship laws provide no preference for a same-sex or unmarried partner to be appointed as the guardian. This could result in having your partner or a close friend -- whom you really want to take care of things for you – being completely cut out of decision making.
Health Care Power of Attorney
A Health Care Power of Attorney is a specific power of attorney in which you give someone the authority to make health care decisions for you if you are unable to make such decisions for yourself. The authority only becomes effective if and when you are unable to make your own health care decisions.
If you do not appoint someone to make healthcare decisions on your behalf by having a valid Health Care Power of Attorney, Indiana has default rules which will control. If you become ill or injured and are unable to make health care decisions for yourself, the state has a law saying who gets to make those decisions for you. This is especially problematic for GLBT and other unmarried couples. Under the state rules the authority to make health care decisions for you is given to a lawfully recognized spouse, adult children, parents and other blood relatives. Unless you have a Health Care Power of Attorney appointing your partner to make these decisions, he or she has no decision making authority under current law -- even if you have married in a state that allows same sex marriage. Too often in these circumstances, blood relatives can, and do, exclude partners from decisions and even from visiting you in the hospital. Having a Health Care Power of Attorney allows you to control who will make these important decisions for you.
A Living Will is a document which express a person’s desire that life prolonging medical procedures not be used in certain circumstances. If you have an incurable injury, disease or illness, your death will occur in a short period of time, and using life prolonging procedures will only delay the dying process, you can say you do not want those procedures. You can also indicate whether or not you want artificial nutrition and hydration (often called “tube feeding”) under those same circumstances.
To take advantage of this right to refuse care you must leave written instructions and those instructions must substantially conform to the specific requirements of the living will law. That means simply writing a note with “I don’t want life support” is not likely to result in your wishes being followed.
A Trust is a legal entity, created by a trust agreement, which holds title to assets for the benefit of the trust beneficiaries. The person who creates the Trust is the grantor, the person or entity who administers the Trust is the trustee and the people who benefit from the Trust are the beneficiaries. With some trusts one person is grantor, trustee and beneficiary.
In some circumstances a Trust can be used to control assets in ways Wills cannot. Sometimes, proper use of a Trust can minimize tax consequences or eliminate the need for probate after a person’s death.
Whether you need a Trust is best determined after a thorough review of the nature of your personal circumstances, financial situation and the goals you wish to accomplish.
Do I need estate planning if I do not have a lot of assets?
Estate planning is for everyone, whether you are in your 20s or a senior citizen, married, unmarried, wealthy or not wealthy. Estate planning is especially important for LGBT adults of all ages. For most people the process can be uncomplicated. If you don’t take the time to do estate planning, the state will do it for you with its default rules. If you do not plan ahead, the state decides who makes health care decisions for you when you can’t, who manages your financial affairs when you can’t, and who gets your assets after your death. When the state’s default rules must be applied, they provide no protection for LGBT or non-traditional families. It’s up to you to protect your future.
Do I need an attorney or can do my estate planning myself?
Do-it-yourself estate planning is like do-it-yourself surgery – you might be able to find enough information on the internet to get the job done, but the end result probably will not be exactly what you wanted. An experienced estate planning attorney – especially one experienced in meeting the needs of your particular family situation – can ensure that your requirements and goals are met. Consider some potential pitfalls of non-attorney internet form companies and fill-in-the-blank estate planning:
- Laws governing estate planning change often and, even more frequently, courts decide cases which guide the planning, drafting, execution and interpretation of estate planning documents. An experienced estate planning attorney is responsible for keeping track of developments in the law. An internet form company is not.
- Some words used in estate planning documents are legal terms of art that may have legal meanings different from what you intend.
- Inadvertently being unclear or imprecise in drafting your own documents can lead to fights over what you meant. You know what you mean but will someone reading the document years from now understand what you intended? Taking the risk now might lead to a fight later over interpretation that could cost your estate significant money and might result in your wishes not being fulfilled. An experienced attorney knows the language to use to make sure your intentions are communicated clearly in a way that will accomplish your goals and minimize the potential for future challenges to your estate plan.
- In legal documents making a simple mistake with a single word can sometimes change the entire meaning of a sentence or clause. This could result in your wishes not being followed.
Contact Lemieux Law to discuss comprehensive estate planning services.