As an estate planning attorney you would expect me to say that “everyone needs a will!” and, in fact, I do believe that pretty much everyone should have an estate plan in place. I am going to provide my reasoning for making such a statement and I would like to stress a few additional things at the outset of this post which are: 1) Estate plans are much more than just your will and 2) Estate plans are not just for old people.
The “Estate Plan”:
An “estate plan” is generally comprised of 3 basic elements: the will, powers of attorney and an advanced health care directive.
- The Will: Everyone knows in general terms what a will is: a document which states how you want your belongs divided up when you die. In addition to establishing the disposition of your assets, a will also names several very important people to handle your estate and affairs, including your personal representative (or executor) and guardians for your minor children. A will can also establish the terms of any testamentary trusts you would like to establish for a variety of reasons, including minimizing estate taxes (federal and state), providing for expert management of assets for you spouse or children, providing support for a spouse while also making sure your assets eventually go to children from a previous marriage or a charity, protecting your children from their creditors, etc.
- Powers of Attorney: A power of attorney is a legal document which names someone else to act as your “attorney-in-fact” if you are unable to act for yourself. Your attorney-in-fact steps into your shoes and handles your financial affairs and makes health care decisions for you if you are otherwise unable to do so. A power of attorney is a very powerful and extremely helpful document to have around just in case something should happen to you and you are incapacitated for a short or long period of time. It avoids the need for a loved one to go to court to be named your guardian to do the same sorts of things that your attorney-in-fact can do to take care of you when you most need help.
- Advanced Health Care Directive (or living will or POLST): This document states your legally binding preferences regarding life-sustaining treatment in case you are in a “permanent unconscious condition or have a terminal illness”. It does not allow someone to “pull the plug” on you unless you fall into these narrowly defined situations and you have specified that you do not want to have such life saving treatments provided for you.
These elements of your estate plan should all be consistent in laying out your desires and goals. For many young people, the emphasis of their estate plan will not be the division of their assets upon their death but rather establishing the legal protections that are most important in rare situations, such as medical incapacity as well as naming a guardian for their young children. Since most young people do not have to incorporate complicated estate tax planning or trust drafting in their estate plans, they can have an estate planning attorney draft a comprehensive estate plan for a relatively affordable fee. The value of a power of attorney or health care directive is immeasurable in those rare cases when they are necessary, but they can generally only be prepared ahead of their need. I certainly do believe that nearly everyone should have an estate plan and I always firmly believe in providing affordable, convenient and quality service to my estate planning clients in Washington.