It is not uncommon for people to believe that they can avoid having a will or other estate planning documents. One reason people avoid estate planning is to avoid the idea of their own mortality. Another reason is that people want to avoid the expense of estate planning. Yet still other people believe that their affairs can be handled without estate planning documents or the assistance of an attorney.
Well for some this avoidance may work out, more often than not things do not go as planned.
Why Do I Need A Will?
A will is a legal document in which you identify those individuals who are going to receive your property at your death. You also designate your personal representative who will administer your estate. Some believe that the necessity of a will may be avoided by passing property “by operation of law.” An example of passing property by operation of law would be having your name and the name of your spouse or child listed as joint account holders on your checking account. However, the belief that this type of property transfer is appropriate for all things is misguided.
Often, people attempt and fail to pass property by operation of law. For example, you purchase a new car and, in order to avoid having a will, you add one of your children’s name to the title. Even if your child is listed on the title you each own 50% of the car. Not only that, but you have just made a gift of 50% of the value of the vehicle to your child, which may require you to file a gift tax return. At your death, your child will still have to probate your estate to have the title of the car transferred to be completely in his or her name. So even though you have avoided the expenses of having a will written, your child will have to pay for an attorney to probate your estate.
There are other very important reasons for creating a will. Unexpected, unintended, and unanticipated things often happen. What if you have a car correctly jointly titled with a child, but you sell that car and do not follow through with the process on your new car? What if your child predeceases you? What if you are in a car accident you cause, you pass away, and your child is personally liable for the damage?
Sometimes, you may inherit property you either did or did not expect to inherit. But what if you no longer have capacity to contract when this happens and you cannot, as a matter of law, change title or transfer the property to your child?
There are too many contingencies and risks of not having a will. Drafting a will is the only way to be sure that your estate will be distributed according to your wishes.
Why Do I Need A Durable Power Of Attorney?
A durable power of attorney is a legal document that empowers someone you choose to act in your place even if you become mentally incapacitated. Your agent under your power of attorney is the only person who will be able to handle your affairs if you become incapacitated. Many struggle with the idea of handing power their financial matters to another person. But, again, there are many risks to not having a durable power of attorney.
For example, imagine a person has Alzheimer’s disease and can no longer manage his or her own affairs. This person can no longer live on their own and needs to be moved into a nursing facility. Since this person turned 65, he or she has been on Medicare; however, Medicare will not pay for this person to be in a nursing home. Now, in order to be able to afford a nursing home, this person needs to create a Medicaid Qualifying Income Trust as well as apply for Medicaid. An agent under a Power of Attorney is the only person who can achieve this if the person has lost his or her capacity to contract. Not even a spouse may be able to do this for you.
Why Do I Need Health Care Documents?
One important health care estate planning document is a living will. A living will is a document which details your desires regarding your medical treatment in extreme circumstances including a terminal condition, an end-state condition, or a persistent vegetative state. Another important health care estate planning document is a designation of health care surrogate, which is a document naming another person to act as your representative to make medical decisions for you either concurrently with you or after you lose the ability to make medical decisions for yourself. A designation of health care surrogate also includes your instructions about any treatments you do or not do want.
Some people have very strong beliefs concerning end of life decisions. Think, for example, of the Teri Schiavo case. For those that wish to not have their lives artificially prolonged or have religious objections to certain procedures, these health care estate planning documents are critical. Doctors have a duty to use all means necessary to keep you alive unless you have the correct legal documents to relieve them of that duty.
How Often Do These Documents Need To Be Revised?
Your estate planning documents should be reviewed every time there is a major change in your life (ex. death of a spouse, marriage, or birth of a new family member) if this affects your estate plan. If no major life changes take place, your will should be reviewed every 5 years at least.
The reasons for this are simple: the laws change and your wishes may change. It is not uncommon for people to try and revise their own wills. However, what often happens is the will is considered revoked and your property passes according the default rules instead of as you intended. Furthermore, presumptions in the law may change, which may change how a court construes your documents. The only way to be sure that your estate planning documents will serve your needs to seek the advice of an estate planning attorney.
For more information on Importance Of Estate Planning, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (727) 827-7777 today.