The topic of Estate Planning is often ignored or postponed because no one wants to think about their own mortality.  Well, I’m here to tell you to make it a priority.  This isn’t just something for wealthy people.  Everyone needs a few basic legal documents prepared, and they should be reviewed every 5 to 10 years for changes.  I speak from personal experience, having experienced a loss recently.  I share my story with you simply to convey the importance of these documents.

To give you some background, my aunt reached out to me several years ago to ask if I would be her Power of Attorney for both health care and finances, as well as handle her estate upon her passing.  She was single, had no children, and her only sibling was my dad, who had been diagnosed with Alzheimer’s.  She expressed her wishes with regards to medical care and made clear as to what she did not want done.  I agreed and assumed she made the appropriate legal document changes.

Fast forward to December 2020.  Her health began to rapidly decline.  During one phone call while in the hospital, she asked me to make her an appointment with an attorney because she had not updated some of her Estate documents.  Unfortunately, she never made those changes appointing me instead of my father.  Meanwhile, I was trying to get approval to access her bank accounts to pay her bills but was met with roadblocks because I learned I was not the one named as the financial POA.  Then, following surgery, she was placed on life support.  After a frantic search of her house, I was able to locate the Healthcare Directive for the hospital.  As a family, we had some tough decisions to make, but we knew her wishes and honored them.

Then came the daunting task of settling her Estate.  The legal documents were spread throughout her house.  I stumbled upon her will in a bag full of account statements.  Since her will had not been updated, it was a bit more challenging to be appointed as the personal representative.  We needed a letter from a doctor proving my dad’s mental incapacity, because he was in no way able to handle his own affairs, let alone his sister’s.  It took a few extra weeks, but eventually I was appointed and able to move forward.

I tell you all this to motivate you to act.  Here is my disclaimer:  I am not an attorney, but these are some suggestions to consider as you review your own estate:

  1. Name the appropriate people to handle your affairs or act on your behalf.  These are a few to consider:
    • Guardian:  If you have minor children, you need to name a Guardian to care for them should you pass away before they reach the age of majority.  You don’t want to leave this decision up to the courts.  They may not appoint the person you would have preferred.
    • Durable Power of Attorney:  You should also name both a Durable Health Care Power of Attorney and a Durable Financial Power of Attorney.  You can name the same person for both or different people for each role.  This document will be in effect after you are incapacitated and unable to act.  The Durable Health Care POA makes medical decision on your behalf, while the Durable Financial POA handles your financial decisions.
    • Trustee:  If you have a revocable trust, you are likely named the grantor and trustee, meaning you set up and can make changes to the trust as well as hold ownership of anything titled in the trust.  A successor trustee should also be named.  Upon your passing, the successor trustee is responsible for executing the terms of the trust for the benefit of the beneficiaries you name.  The successor trustee can also be a beneficiary, such as one of your adult children.
  2. Review and update.  Once you have these legal documents, be sure to review and update them as needed, at least every 10 years.  Children grow up.  People may have moved, developed health problems, or passed away.  Over time, you might change who you designate in each of these legal roles.  On financial accounts and policies, review your beneficiary designations to ensure the people you have listed are who you intend to inherit your assets.
  3. Communicate.  Make sure the people you designate know your intentions so they aren’t left wondering what to do and where the legal documents can be found.  Keep a list of important contacts such as your CPA, financial professional, and attorney, along with a list of policies and accounts.  You may know where your accounts are and who to contact, but your loved ones may not.

No one enjoys thinking about their own mortality.  However, failing to prepare the necessary legal documents just makes things harder for your loved ones at a time when they are already grieving.  Hovis & Associates works with several Estate Planning attorneys that we would be happy to recommend.  This is your legacy you are leaving behind.  Take the time to set up things the way you want and communicate that to your family.  They will appreciate your planning when you are gone.

Disclosure: Cambridge does not offer legal advice. Please speak with a licensed attorney regarding your unique situation.