Most of my clients in today’s world don’t have to worry about estate taxes. The federal estate tax only affects individuals who have over $11,500,000 in assets. However, estate planning is much more than just “estate tax savings.”
With a Will, you can direct who you want to be your personal representative (formerly called “executor”). You can vary the amounts or percentages you are leaving to beneficiaries, name guardians for minor children, make specific gifts to charities or individuals who are important to you, and create a list of personal property items and who you want those items to go to. All of these among other things are reasons why you might want to draft up a will. In addition to the will, however, there are four documents that many of my clients need and which in some cases are more important than the will.
The first is the durable power of attorney which gives your agent the authority to handle your financial affairs during your lifetime if you become incapacitated or simply for your convenience even if you are not incapacitated. This will help avoid a court-appointed conservatorship and the extra costs and complexities that conservatorship brings.
Second is a health care power of attorney. This document names an agent to make legally binding health care decisions for you in the event of your incapacity. If you don’t have one, your doctors may require that a court-appointed guardian be appointed for you. That would mean an additional time delay, costs, and is to be avoided if we can.
We typically also created a living will or what I call the “unplug-me” document where you get to give directions to your doctors, the hospital, and your family as to what you would like to do if you are unable to communicate and if two doctors certify in writing that your condition is terminal. You can direct that you be taken off life support, left on life support, or be left on life support for a certain period of time and take you off only if your condition does not improve. You also get to decide what to do in the case of persistent vegetative state so you and your family can be spared from legal proceedings like the Terry Schiavo case in Florida.
You also need to have a HIPPA release and authorization to be used in conjunction with the health care power of attorney. It authorizes the agents you’ve named in the health care power of attorney to get medical information about you which of course they are going to need if they are going to make medical decisions for you.
A good estate planning attorney can give you advice regarding all of the above and how your assets should be held in order to coordinate your plan and avoid probate if possible. The bottom line is that estate planning is not just for the super-wealthy. Every person is going to need some aspects of estate planning and particularly those documents referred to above.