The focus for today is everyone’s favourite topic, death and dying. I know, I know but hear me out…it’s important. Chances are you will be dealing with your parent’s estate at some point or burdening someone else with the chore when you pass away. Having a basic knowledge of estate planning and what documents should be in place will make the process run more smoothly.
First things first, do you even know if your parents have an estate plan in place? If you do, great, you’re one step ahead….if not, well, you’re going to want to find out. It’s not the most pleasant dinnertime conversation but do it anyways. You’ll want to get a sense of their goals for end of life care and after death wishes as well as knowing where they’re important documents are stored (if they have them).
When we talk about having an estate plan most people know the importance of having a Will. A Will is going to outline what you want to happen to your property and money after you die. It will appoint an executor (if that’s going to be you, be prepared…it is NOT an easy job). Not only will your Will (will your Will…stupid word confusion!) outline who your assets go to, it can also assign guardians for any non-adult children and your funeral instructions. I highly recommend using a lawyer to do your Will; yes it’s going to cost a bit of money to get done, but it will cost a lot less than not having a Will or having a poorly written Will that could be disputed in court. A good estate lawyer will know what to ask to ensure everything is covered and your legacy will end up where you want it. There are a few stipulations when it comes to how money is dispersed within an estate. You have to provide for your spouse and any dependents (this includes underage children as well as adult children who can’t care for themselves…I said can’t, not won’t). The amount you have to leave them will really depend on how big your estate is; if it’s large it could be a small portion, but if the estate is small it could be the entire thing. Basically, you can’t leave everything to your dog and nothing for your husband!
Along with your Will, there are a couple of other documents you’ll want to have prepared, these are a Power of Attorney and Personal Directive. Unlike a Will, which is for after you die, a POA and a PD are for when you are still alive. They will let you still have a certain level of control even if you are no longer able to make competent decisions.
Power of Attorney
A Power of Attorney is the document that appoints a person (usually there’s a primary and an alternate) who will act as the decision maker for your finances and property if you become incapable of making such decisions for yourself. You want to do your POA when you are in good health but it will only come into affect after a doctor or other medical professional (you can get specific about certain qualifications or number of opinions) deems you unfit to make decisions. Once that happens the person you have appointed as your attorney will take over the decision making. Obviously, you need to make sure this is someone you trust and deem responsible enough to be in charge of your finances.
A Personal Directive is similar to a POA but it deals with health matters. Here you will be assigning someone (often the same person) to make decisions for you regarding health care and personal needs if you are no longer able to make them yourself. A PD will let you still be the boss even when you aren’t able to give the orders. Included in your Personal Directive will be directions on what sort of measures to take (extensive vs do not resuscitate orders), where you will live (at home if possible or a nursing home), etc.
Not having a Power of Attorney or Personal Directive in place can make things really difficult on your family. They will have to go to court to have a trustee/guardian appointed for you and that’s a lengthy, costly and invasive process. As I stated above, this is going to cost you more in the long run than just getting an estate plan done by a lawyer now.
A Will, Power of Attorney and Personal Directive are the three basic components of a comprehensive estate plan having them in place will make things significantly easier for your family. If you are unsure about whether or not your parents have taken this step then sit them down and have the talk. It sucks and can be awkward, but I promise you won’t regret it. Maybe remind them that this is their chance to keep on parenting you even after they are gone…