A health care power of attorney (“POA”) is a legal instrument that allows you to select the person (called an “agent”) that you want to make health care decisions for you, if and when you become unable to make such decisions for yourself.
WHAT TYPES OF DECISIONS CAN BE MADE BY A HEALTH CARE POA?
A health care POA can govern any decision related to your health that you want to address. A health care POA may include decisions related to organ donation, hospitalization, treatment in a nursing home, home health care, psychiatric treatment, end-of-life (i.e., the use of life support), and more.
WHEN WOULD I USE A HEALTH CARE POA?
A health care POA is used when you become unable to make health care decisions for yourself. Your agent will be able to make decisions for you based on the information you provided in your health care POA. Equally important, your agent will be able to access your medical records, communicate with your health care providers, and so on.
WHAT HAPPENS IF I DON’T HAVE A HEALTH CARE POA?
If you don’t have a health care POA, and you should become disabled to the point where you are unable to make health care decisions for yourself, your health care provider (say, a hospital) will do everything possible to save your life.
Your family, without guidance from you, will be faced with agonizing decisions. Your family members may not be able to agree on how to handle your medical care, or you might disagree with the decision your family ultimately makes.
If your family can’t agree on a course of action, they would have to go to an Iowa Court and have a conservator/guardian appointed for you. It may, or may not, be someone you would have chosen. Further, the conservator/guardian may make decisions you wouldn’t have made.
This is all very complicated, time consuming, and expensive. A health care POA simplifies this process by giving you control over how decisions are made for you and allowing you to choose who will carry out your wishes. Best of all, it leaves your family with peace of mind.
IS THERE A “ONE-SIZE-FITS-ALL” POA FOR HEALTH CARE?
No! All Iowans are special and unique, and so are each individual’s issues and concerns. Consequently, this article is presented for informational purposes only, not as legal advice. Please consult your lawyer for personal advice.
DO I NEED OTHER ESTATE PLANNING DOCUMENTS IN ADDITION TO A HEALTH CARE POA?
Do you have a health care POA currently? And do you have a complete estate plan? Why or why not? I’d be most interested in any thoughts or comments. Email me anytime at gordon@gordonfischerlawfirm.com or call 515-371-6077.
*OK, not everything. But many things, let’s say, an excellent start.
https://www.gordonfischerlawfirm.com/wp-content/uploads/2021/06/Everything-You-Need-to-Know-About-Estate-Planning-Day-3-scaled.jpg17072560Gordon Fischerhttps://www.gordonfischerlawfirm.com/wp-content/uploads/2017/05/GFLF-logo-300x141.pngGordon Fischer2021-06-03 09:00:232022-01-10 14:35:49What Every Iowan Should Know About Health Care Power of Attorney (Everything* You Need to Know About Estate Planning: Day 3)
A will is the bedrock of every estate plan. Even though most people know they should have one, they don’t know what a will is, what goes in it, or how it works. In fact, only one in four adults in America (25%) has a will—that’s roughly the same number who have tattoos (23%). Look at it this way: you can take your tattoo to the grave, but your assets that stay above ground need to be administered properly.
WILLS: THE BOTTOM LINE
A will is a legal document that provides for the orderly distribution of your personal property at death according to your wishes. It spells out your directions regarding other important matters such as the care of any minor children, the transition of business assets, and the naming of an executor who will oversee its directives are followed.
WHAT IF YOU DON’T HAVE A WILL
Not having a will means the judicial system (the “court”) will end up administrating your estate through the lengthy process of probate in accordance with state intestate laws. There is no guarantee this process will result in dispersing your assets in the way you would have wanted. This process can cost your family not only a lot of time and money, but it can also lead to anxiety and even heartache.
WILL IS NOT AN ESTATE PLAN, AND VICE VERSA
The will is the bedrock document of every estate plan, and it’s a little more complicated than other documents. With your will, you’ll be answering four basic, but very important, questions. I’ll list the questions, then discuss each separately.
Who do you want to have your stuff?
Who do you want to be in charge of carrying out your wishes as expressed in the will?
Who do you want to take care of your children? If you have minor children (i.e., children under age 18), you’ll want to designate a legal guardian(s) who will take care of your children until they are adults.
What charities do you want to benefit when you’re gone. A will is a great way to benefit your favorite nonprofits?
WHO DO YOU WANT TO HAVE YOUR STUFF?
A will provides orderly distribution of your property at death according to your wishes. Your property includes both tangible and intangible things.
Tangible personal property is usually considered to be everything (other than land) that has physical substance and can be touched, held, and felt. Examples of tangible personal property include furniture, vehicles, baseball cards, jewelry, art, your Great-aunt Millie’s teaspoon collection, and pets. Intangible personal property doesn’t have a physical existence so it can’t be touched, but it nevertheless has value. Your intangible personal property might include bank accounts, stocks, bonds, insurance policies, and retirement benefit accounts.
Most people think “real estate” or “land” when they hear the word “property,” but “property” has a different meaning when it comes to estate planning.
There are generally two basic categories of property: real property and personal property. Real property is land and whatever is built on the land, attached to it, or natural to it, such as houses, barns, grain silos, tile drainage lines, and mineral rights. Personal property is essentially anything that is not real property. Two qualities of personal property to keep in mind: it is moveable, and it can be hidden. Jewelry, cash, a pension, and antiques are kinds of personal property.
Example: The fenced acreage you own is real property because it is land that is immovable. The cattle on it are personal property because they can be moved—or hidden.
WHO’S IN CHARGE?
Who do you want to be in charge of carrying out your wishes as expressed in your will?
An executor is a person who’s in charge of your estate plan. You entrust your executor with the authority to ensure that your wishes are carried out and that your affairs are in order.
Managing an estate plan is not an awful job, but it is an awful lot of responsibility. If you have never dealt with the execution of a will, you might not know how time-consuming, complicated, and demanding it can be. You may also be grieving at the deceased’s passing while trying to make sure all particulars are handled properly. It can be a stressful role, to say the least.
When picking an executor, you want to make sure it’s someone you trust, but also someone you know can handle the complexities and responsibilities of the job. We all have people in our lives whom we love but recognize they’re not dependable when it comes to things like finances and managing paperwork. Choose someone in your life who is organized, detail-oriented, and can take on what is essentially the part-time job of administrating your estate.
If there’s no person in your life you believe trustworthy or capable enough to be your executor, or you don’t want to burden with the role, you have another option: appointing a corporate executor or trustee. You can find corporate executors and trustees at banks and private investment firms. They usually charge a fee based on the size of the estate, but corporate executors and trustees have the advantages of experience, a dedicated staff, and impartiality. The latter quality is particularly important if there are complicated family dynamics, such as blended families or bad blood.
Whether you choose someone you know or appoint a corporate executor or trustee, you need to sit down with that person for a formal discussion. For a friend or family member, make clear why you’ve assigned him or her the role. Avoid surprises: don’t keep the name of your executor a secret. If you chose one of your children to be your executor, make sure to tell the other(s) to avoid hurt feelings and strife after you’re gone.
Additionally, if you have a large or complicated estate, or you would like to set up long-term trusts, or you worry about taxes, a corporate executor or trustee might be a good solution.
WHO GETS THE KIDS?
For parents with minor children (those younger than 18 years old), it is critically important that you designate a guardian(s) who will be legally responsible for their education, health, and physical care until they reach adulthood. Like the executor, it is a job that requires you choose someone you trust, but it encompasses so much more than the able administration of your estate—and it doesn’t end after the estate is closed.
In most cases, the surviving parent assumes guardianship of children without a Court intervening. However, there are still a number of factors to consider when choosing a guardian, including parenting style, financial situation, religious and personal values, age, and location. You need to have an in-depth conversation with any potential guardian or guardians to confirm everyone is comfortable with the arrangement and that he or she is prepared for this responsibility.
In Iowa, dying without establishing guardianship results in the Court choosing a child’s or children’s caregiver(s). It considers what is in the best interest of the child and makes a guess as to the person or people a parent would have wanted. The choice might be someone the deceased parent would never have selected—all the more reason to name a legal guardian in your will.
TATTOO ESTATE PLANNING ON YOUR TO-DO LIST
Go ahead get that tattoo and wear it proud all the way to the very end. But while you’re showing your ink off, also think about what you want to do with all of your assets. Talk to a qualified estate planner or get started with estate planning by filling out my free, no-obligation estate plan questionnaire. Any questions? Don’t hesitate to contact me at gordon@gordonfischerlawfirm.com or by phone at 515-371-6077.
*OK, not everything. But many things, let’s say, an excellent start.
https://www.gordonfischerlawfirm.com/wp-content/uploads/2021/06/caroline-hernandez-TMpQ5R9mbOc-unsplash.jpg12801920Gordon Fischerhttps://www.gordonfischerlawfirm.com/wp-content/uploads/2017/05/GFLF-logo-300x141.pngGordon Fischer2021-06-02 09:00:162022-01-10 14:35:50What Do Wills and Tattoos Have in Common? (Everything* You Need to Know About Estate Planning: Day 2)
Not exactly material for scintillating conversation. In fact, I’d bet most of us like to avoid this topic because it can be confusing, and it requires lots of decision-making. And, well, yes, it forces one to think about one’s own mortality. Estate planning, after all, is a roadmap about what you want to happen after you move on from this life. While it may not be a fun topic, it is indeed a necessary one.
ESTATE PLAN: YOU ALMOST SURELY NEED ONE
Almost everyone needs some kind of estate plan. If you’re young, healthy, unmarried, have no children, and have no significant or unusual assets . . . perhaps you could talk me into the idea that you don’t entirely need an estate plan. Even in such (rare) cases, I strongly recommend making sure your beneficiary designations are completed and up to date (for example, on your bank/credit union savings accounts and retirement benefit plan). But, if you are married, and/or have kids, and/or have significant or unusual assets, and/or own part or all of a business, you most definitely need an estate plan!
WHAT IS AN ESTATE PLAN, ANYWAY?
What do we talk about when we talk about estate planning? There are six documents that should be part of most everyone’s estate plan and you should keep each updated and current. Also, don’t forget about assets with your beneficiary designations. For most Iowans, that’s good – six documents, keeping them current, and also remembering about those assets with beneficiary designations.
Sure, estate planning is complicated, but not that complicated. I’ll show you.
SIX “MUST HAVE” DOCUMENTS OF YOUR ESTATE PLAN
There are six documents that should be part of most everyone’s estate plan:
We’ll go through each document briefly, so you have a sense of what each entails.
ESTATE PLAN QUESTIONNAIRE
Estate planning involves facing heavy questions and, depending on the amount of assets and beneficiaries you have, may take quite a bit of time and thought. I recommend clients (and even those who aren’t my clients) complete an estate plan questionnaire.
An estate plan questionnaire is an easy way to get all of your information in one place, and it should help you understand and prioritize estate planning goals. (I must also admit a questionnaire makes it easier for your attorney to build your estate plan!)
As with any project, it helps “to begin with the end in mind.” A questionnaire can help get you there.
LAST WILL AND TESTAMENT
Now let’s get to the will. The will is the bedrock document of every estate plan, and it’s a little more complicated than other documents.
With your will, you’ll be answering three major questions:
Who do you want to have your stuff? A will provides for orderly distribution of your property at death according to your wishes. Your property includes both tangible and intangible things. (An example of tangible items would be your coin collection. An example of an intangible asset would be stocks.)
Who do you want to be in charge of carrying out your wishes as expressed in the will? The “executor” is the person who will be responsible for making sure the will is carried out as written.
Who do you want to take care of your kids? If you have minor children (i.e., kids under age 18), you’ll want to designate a legal guardian(s) who will take care of your children until they are adults.
POWER OF ATTORNEY FOR HEALTH CARE
A power of attorney for health care designates someone to handle your health care decisions for you if you become unable to make those decisions for yourself. This essentially gives another person the power to make decisions on your behalf. For example, if you don’t want to be kept alive with machines, you can clearly outline that in your power of attorney for health care. But keep in mind that power of attorney for health care isn’t just about end-of-life decisions – it can cover any medical situation.
POWER OF ATTORNEY FOR FINANCIAL MATTERS
The power of attorney for financial matters is similar, only your designated agent has the power to make decisions and act on your behalf when it comes to your finances. This gives them the authority to pay bills, settle debts, sell property, or anything else that needs to be done if you become incapacitated and unable to do this yourself.
It might be obvious by now, but I’ll say it just in case: choosing an agent for a power of attorney requires that you think long and hard about who would be best suited for the job and who you trust.
DISPOSITION OF PERSONAL PROPERTY
Now, let’s get to the disposition of the personal property. This is where you get specific about items you want particular people to have. If you’re leaving everything to one or two people, then you may not need to fill this out. But, if you know you want your niece Suzie to have a specific piece of jewelry, and your nephew Karl to have that antique bookshelf he loved, then you’d say so in this document.
DISPOSITION OF FINAL REMAINS
We come to the disposition of final remains. This document is where you get to tell your loved ones exactly how you want your body to be treated after you pass away. If you want a marching band and fireworks shooting your ashes into the sky (that’s a thing, by the way), then this is where you make it known. It can be as general as simply saying “I want to be cremated,” or it can be specific and include details of plots you’ve already purchased or arrangements you’ve already made.
If you undergo a major life event, you may well want to revisit with your estate planning lawyer, to see if this life event requires changing your estate planning documents.
What do I mean by a major life event? Some common such events would include:
The birth or adoption of a child or grandchild
Marriage or divorce
Illness or disability of you, your spouse, or other family member
Purchasing a home or other large asset
Moving to another state
Large increases or decreases in the value of assets, such as investments
If you or your spouse receives a large inheritance or gift
If any family member, or other heir, passes away
This is just a short list of life events that should cause you to re consider your estate plan. There are many others.
DON’T FORGET ABOUT YOUR BENEFICIARY DESIGNATIONS
There are six “must have” estate planning documents, plus you need to keep them current. Also, don’t forget about your beneficiary designations. For example, savings and checking accounts, life insurance, annuities, 401(k)s, pensions, and IRAs are all transferred via beneficiary designations. These beneficiary designations actually trump your will.
Regarding assets with beneficiary designations, you must make sure that designations are correctly filled out and supplied to the appropriate institution.
WHAT OTHER DOCUMENTS MIGHT YOU NEED BESIDES THESE SIX “MUST HAVE” ESTATE PLANNING DOCUMENTS?
For many Iowans, what I’ve outlined above is enough. There may be folks who have, say, more than $1 million in assets, or who have complex assets (for example, more than one piece of real estate), or own part or all of a robust business, or otherwise have unusual situations. In such cases, a trust may be helpful. But that will be more “advanced” estate planning. What I’ve described above is an excellent start.
There it is in a nutshell. This is what goes into an estate plan.
Whether it’s complicated or simple, it does require some thought and time. But it’s worth the investment – a proper estate plan can save you and your estate costs and fees; help your family and friends; and provide you peace of mind.
Perhaps most importantly, through proper estate planning, you can help your favorite charities in ways large and small. Really, without estate planning, it’s not possible, at your death, to help nonprofits you care about. With an estate plan, you can be a real-life charitable superhero!
https://www.gordonfischerlawfirm.com/wp-content/uploads/2021/05/scott-graham-OQMZwNd3ThU-unsplash.jpg13352000Gordon Fischerhttps://www.gordonfischerlawfirm.com/wp-content/uploads/2017/05/GFLF-logo-300x141.pngGordon Fischer2021-06-01 09:00:212022-01-10 14:35:50Everything* You Need to Know About Estate Planning (Day 1)
What Every Iowan Should Know About Health Care Power of Attorney (Everything* You Need to Know About Estate Planning: Day 3)
Estates & Estate Planning, Powers of Attorney, Wills, Wills, Trusts & EstatesSIX “MUST HAVE” DOCUMENTS OF YOUR ESTATE PLAN
As discussed in this previous blog post overview, there are six documents that should be part of most everyone’s estate plan:
Last blog post, I explained the basics of a will.
In this post, let’s discuss the benefits and important aspects of a health care power of attorney.
WHAT IS A HEALTH CARE POWER OF ATTORNEY?
A health care power of attorney (“POA”) is a legal instrument that allows you to select the person (called an “agent”) that you want to make health care decisions for you, if and when you become unable to make such decisions for yourself.
WHAT TYPES OF DECISIONS CAN BE MADE BY A HEALTH CARE POA?
A health care POA can govern any decision related to your health that you want to address. A health care POA may include decisions related to organ donation, hospitalization, treatment in a nursing home, home health care, psychiatric treatment, end-of-life (i.e., the use of life support), and more.
WHEN WOULD I USE A HEALTH CARE POA?
A health care POA is used when you become unable to make health care decisions for yourself. Your agent will be able to make decisions for you based on the information you provided in your health care POA. Equally important, your agent will be able to access your medical records, communicate with your health care providers, and so on.
WHAT HAPPENS IF I DON’T HAVE A HEALTH CARE POA?
If you don’t have a health care POA, and you should become disabled to the point where you are unable to make health care decisions for yourself, your health care provider (say, a hospital) will do everything possible to save your life.
Your family, without guidance from you, will be faced with agonizing decisions. Your family members may not be able to agree on how to handle your medical care, or you might disagree with the decision your family ultimately makes.
If your family can’t agree on a course of action, they would have to go to an Iowa Court and have a conservator/guardian appointed for you. It may, or may not, be someone you would have chosen. Further, the conservator/guardian may make decisions you wouldn’t have made.
This is all very complicated, time consuming, and expensive. A health care POA simplifies this process by giving you control over how decisions are made for you and allowing you to choose who will carry out your wishes. Best of all, it leaves your family with peace of mind.
IS THERE A “ONE-SIZE-FITS-ALL” POA FOR HEALTH CARE?
No! All Iowans are special and unique, and so are each individual’s issues and concerns. Consequently, this article is presented for informational purposes only, not as legal advice. Please consult your lawyer for personal advice.
DO I NEED OTHER ESTATE PLANNING DOCUMENTS IN ADDITION TO A HEALTH CARE POA?
Yes, definitely! (It’s even essential for college students.) There are six “must-have” estate planning documents that make up a complete, comprehensive estate plan. (Some people may also need to consider a trust.)
Do you have a health care POA currently? And do you have a complete estate plan? Why or why not? I’d be most interested in any thoughts or comments. Email me anytime at gordon@gordonfischerlawfirm.com or call 515-371-6077.
*OK, not everything. But many things, let’s say, an excellent start.
What Do Wills and Tattoos Have in Common? (Everything* You Need to Know About Estate Planning: Day 2)
Estates & Estate Planning, Wills, Wills, Trusts & EstatesA will is the bedrock of every estate plan. Even though most people know they should have one, they don’t know what a will is, what goes in it, or how it works. In fact, only one in four adults in America (25%) has a will—that’s roughly the same number who have tattoos (23%). Look at it this way: you can take your tattoo to the grave, but your assets that stay above ground need to be administered properly.
WILLS: THE BOTTOM LINE
A will is a legal document that provides for the orderly distribution of your personal property at death according to your wishes. It spells out your directions regarding other important matters such as the care of any minor children, the transition of business assets, and the naming of an executor who will oversee its directives are followed.
WHAT IF YOU DON’T HAVE A WILL
Not having a will means the judicial system (the “court”) will end up administrating your estate through the lengthy process of probate in accordance with state intestate laws. There is no guarantee this process will result in dispersing your assets in the way you would have wanted. This process can cost your family not only a lot of time and money, but it can also lead to anxiety and even heartache.
WILL IS NOT AN ESTATE PLAN, AND VICE VERSA
The will is the bedrock document of every estate plan, and it’s a little more complicated than other documents. With your will, you’ll be answering four basic, but very important, questions. I’ll list the questions, then discuss each separately.
WHO DO YOU WANT TO HAVE YOUR STUFF?
A will provides orderly distribution of your property at death according to your wishes. Your property includes both tangible and intangible things.
Tangible personal property is usually considered to be everything (other than land) that has physical substance and can be touched, held, and felt. Examples of tangible personal property include furniture, vehicles, baseball cards, jewelry, art, your Great-aunt Millie’s teaspoon collection, and pets. Intangible personal property doesn’t have a physical existence so it can’t be touched, but it nevertheless has value. Your intangible personal property might include bank accounts, stocks, bonds, insurance policies, and retirement benefit accounts.
Most people think “real estate” or “land” when they hear the word “property,” but “property” has a different meaning when it comes to estate planning.
There are generally two basic categories of property: real property and personal property. Real property is land and whatever is built on the land, attached to it, or natural to it, such as houses, barns, grain silos, tile drainage lines, and mineral rights. Personal property is essentially anything that is not real property. Two qualities of personal property to keep in mind: it is moveable, and it can be hidden. Jewelry, cash, a pension, and antiques are kinds of personal property.
Example: The fenced acreage you own is real property because it is land that is immovable. The cattle on it are personal property because they can be moved—or hidden.
WHO’S IN CHARGE?
Who do you want to be in charge of carrying out your wishes as expressed in your will?
An executor is a person who’s in charge of your estate plan. You entrust your executor with the authority to ensure that your wishes are carried out and that your affairs are in order.
Managing an estate plan is not an awful job, but it is an awful lot of responsibility. If you have never dealt with the execution of a will, you might not know how time-consuming, complicated, and demanding it can be. You may also be grieving at the deceased’s passing while trying to make sure all particulars are handled properly. It can be a stressful role, to say the least.
When picking an executor, you want to make sure it’s someone you trust, but also someone you know can handle the complexities and responsibilities of the job. We all have people in our lives whom we love but recognize they’re not dependable when it comes to things like finances and managing paperwork. Choose someone in your life who is organized, detail-oriented, and can take on what is essentially the part-time job of administrating your estate.
If there’s no person in your life you believe trustworthy or capable enough to be your executor, or you don’t want to burden with the role, you have another option: appointing a corporate executor or trustee. You can find corporate executors and trustees at banks and private investment firms. They usually charge a fee based on the size of the estate, but corporate executors and trustees have the advantages of experience, a dedicated staff, and impartiality. The latter quality is particularly important if there are complicated family dynamics, such as blended families or bad blood.
Whether you choose someone you know or appoint a corporate executor or trustee, you need to sit down with that person for a formal discussion. For a friend or family member, make clear why you’ve assigned him or her the role. Avoid surprises: don’t keep the name of your executor a secret. If you chose one of your children to be your executor, make sure to tell the other(s) to avoid hurt feelings and strife after you’re gone.
Additionally, if you have a large or complicated estate, or you would like to set up long-term trusts, or you worry about taxes, a corporate executor or trustee might be a good solution.
WHO GETS THE KIDS?
For parents with minor children (those younger than 18 years old), it is critically important that you designate a guardian(s) who will be legally responsible for their education, health, and physical care until they reach adulthood. Like the executor, it is a job that requires you choose someone you trust, but it encompasses so much more than the able administration of your estate—and it doesn’t end after the estate is closed.
In most cases, the surviving parent assumes guardianship of children without a Court intervening. However, there are still a number of factors to consider when choosing a guardian, including parenting style, financial situation, religious and personal values, age, and location. You need to have an in-depth conversation with any potential guardian or guardians to confirm everyone is comfortable with the arrangement and that he or she is prepared for this responsibility.
In Iowa, dying without establishing guardianship results in the Court choosing a child’s or children’s caregiver(s). It considers what is in the best interest of the child and makes a guess as to the person or people a parent would have wanted. The choice might be someone the deceased parent would never have selected—all the more reason to name a legal guardian in your will.
TATTOO ESTATE PLANNING ON YOUR TO-DO LIST
Go ahead get that tattoo and wear it proud all the way to the very end. But while you’re showing your ink off, also think about what you want to do with all of your assets. Talk to a qualified estate planner or get started with estate planning by filling out my free, no-obligation estate plan questionnaire. Any questions? Don’t hesitate to contact me at gordon@gordonfischerlawfirm.com or by phone at 515-371-6077.
*OK, not everything. But many things, let’s say, an excellent start.
Everything* You Need to Know About Estate Planning (Day 1)
Estates & Estate Planning, Powers of Attorney, Trusts, Wills, Wills, Trusts & EstatesEstate planning.
Not exactly material for scintillating conversation. In fact, I’d bet most of us like to avoid this topic because it can be confusing, and it requires lots of decision-making. And, well, yes, it forces one to think about one’s own mortality. Estate planning, after all, is a roadmap about what you want to happen after you move on from this life. While it may not be a fun topic, it is indeed a necessary one.
ESTATE PLAN: YOU ALMOST SURELY NEED ONE
Almost everyone needs some kind of estate plan. If you’re young, healthy, unmarried, have no children, and have no significant or unusual assets . . . perhaps you could talk me into the idea that you don’t entirely need an estate plan. Even in such (rare) cases, I strongly recommend making sure your beneficiary designations are completed and up to date (for example, on your bank/credit union savings accounts and retirement benefit plan). But, if you are married, and/or have kids, and/or have significant or unusual assets, and/or own part or all of a business, you most definitely need an estate plan!
WHAT IS AN ESTATE PLAN, ANYWAY?
What do we talk about when we talk about estate planning? There are six documents that should be part of most everyone’s estate plan and you should keep each updated and current. Also, don’t forget about assets with your beneficiary designations. For most Iowans, that’s good – six documents, keeping them current, and also remembering about those assets with beneficiary designations.
Sure, estate planning is complicated, but not that complicated. I’ll show you.
SIX “MUST HAVE” DOCUMENTS OF YOUR ESTATE PLAN
There are six documents that should be part of most everyone’s estate plan:
We’ll go through each document briefly, so you have a sense of what each entails.
ESTATE PLAN QUESTIONNAIRE
Estate planning involves facing heavy questions and, depending on the amount of assets and beneficiaries you have, may take quite a bit of time and thought. I recommend clients (and even those who aren’t my clients) complete an estate plan questionnaire.
An estate plan questionnaire is an easy way to get all of your information in one place, and it should help you understand and prioritize estate planning goals. (I must also admit a questionnaire makes it easier for your attorney to build your estate plan!)
As with any project, it helps “to begin with the end in mind.” A questionnaire can help get you there.
LAST WILL AND TESTAMENT
Now let’s get to the will. The will is the bedrock document of every estate plan, and it’s a little more complicated than other documents.
With your will, you’ll be answering three major questions:
POWER OF ATTORNEY FOR HEALTH CARE
A power of attorney for health care designates someone to handle your health care decisions for you if you become unable to make those decisions for yourself. This essentially gives another person the power to make decisions on your behalf. For example, if you don’t want to be kept alive with machines, you can clearly outline that in your power of attorney for health care. But keep in mind that power of attorney for health care isn’t just about end-of-life decisions – it can cover any medical situation.
POWER OF ATTORNEY FOR FINANCIAL MATTERS
The power of attorney for financial matters is similar, only your designated agent has the power to make decisions and act on your behalf when it comes to your finances. This gives them the authority to pay bills, settle debts, sell property, or anything else that needs to be done if you become incapacitated and unable to do this yourself.
It might be obvious by now, but I’ll say it just in case: choosing an agent for a power of attorney requires that you think long and hard about who would be best suited for the job and who you trust.
DISPOSITION OF PERSONAL PROPERTY
Now, let’s get to the disposition of the personal property. This is where you get specific about items you want particular people to have. If you’re leaving everything to one or two people, then you may not need to fill this out. But, if you know you want your niece Suzie to have a specific piece of jewelry, and your nephew Karl to have that antique bookshelf he loved, then you’d say so in this document.
DISPOSITION OF FINAL REMAINS
We come to the disposition of final remains. This document is where you get to tell your loved ones exactly how you want your body to be treated after you pass away. If you want a marching band and fireworks shooting your ashes into the sky (that’s a thing, by the way), then this is where you make it known. It can be as general as simply saying “I want to be cremated,” or it can be specific and include details of plots you’ve already purchased or arrangements you’ve already made.
KEEP UPDATED AND CURRENT
OK, so you’ve gone to an estate planning lawyer, and these six “must have” estate planning documents have been drafted and signed. What else? You need to keep these documents updated and current.
If you undergo a major life event, you may well want to revisit with your estate planning lawyer, to see if this life event requires changing your estate planning documents.
What do I mean by a major life event? Some common such events would include:
This is just a short list of life events that should cause you to re consider your estate plan. There are many others.
DON’T FORGET ABOUT YOUR BENEFICIARY DESIGNATIONS
There are six “must have” estate planning documents, plus you need to keep them current. Also, don’t forget about your beneficiary designations. For example, savings and checking accounts, life insurance, annuities, 401(k)s, pensions, and IRAs are all transferred via beneficiary designations. These beneficiary designations actually trump your will.
Regarding assets with beneficiary designations, you must make sure that designations are correctly filled out and supplied to the appropriate institution.
WHAT OTHER DOCUMENTS MIGHT YOU NEED BESIDES THESE SIX “MUST HAVE” ESTATE PLANNING DOCUMENTS?
For many Iowans, what I’ve outlined above is enough. There may be folks who have, say, more than $1 million in assets, or who have complex assets (for example, more than one piece of real estate), or own part or all of a robust business, or otherwise have unusual situations. In such cases, a trust may be helpful. But that will be more “advanced” estate planning. What I’ve described above is an excellent start.
There it is in a nutshell. This is what goes into an estate plan.
Whether it’s complicated or simple, it does require some thought and time. But it’s worth the investment – a proper estate plan can save you and your estate costs and fees; help your family and friends; and provide you peace of mind.
Perhaps most importantly, through proper estate planning, you can help your favorite charities in ways large and small. Really, without estate planning, it’s not possible, at your death, to help nonprofits you care about. With an estate plan, you can be a real-life charitable superhero!
BEGIN TODAY
Why not start right now on your own plan for the future with my free estate plan questionnaire? It’s provided to you free, without any obligation. I would love to discuss your estate plan with you; reach out at any time by email, gordon@gordonfischerlawfirm.com, or cell phone, 515-371-6077.
*OK, not everything. But many things, let’s say, an excellent start.