In order to think of must-haves, I generally require having some context surrounding it or it's just too large of a question to begin. Even then, I generally tend to automatically narrow the context in order to capture my thoughts. For example, in the context of clothing, I quickly think of business, casual, or formal for starters, and then further refine it to business-casual or business-formal. From there it becomes more clear, must-haves might be: a blue/grey suite, with combination of shirts & ties; some black accessories, and couple of sport-coats and slack combinations. For technology we may initially think of entertainment or business, and then conclude must-haves such as computers, cell phones (smart phones), HDTV, with wireless connectivity capabilities amongst them all. Both of these examples are common to all of us, and even a bit fun to think about. How about your estate? Now there's an exciting, thought provoking subject for must-haves isn't it? Yet it sure is common to all of us.
I cannot tell you how many people I meet in my practice that do not have the basic must-haves for estate planning. Part of the problem seems to be a misnomer that estate planning is all about planning ones death. Well, no one typically wants to confront their own mortality, nor do they feel like it’s a big deal (Heck, I'll be dead, so what will I care!). While this is understandable, there are two problems: death is only one element to estate planning. There are 2 other concerns (more below), and secondly not providing a set of instructions (a Will) for your heirs for your eventual death-event, pushes the burden onto your loved ones, and can cause stress for even the best of families. Additionally, it will cost more money and time by not having these things done beforehand! So a Will is the first must-have for estate planning.
Beyond creating a Will or Trust, there are 2 other must-have documents for us all. The first is a health-care directive (HCD); a document that used be called a living-Will. It authorizes a person to step-in your shoes to make decisions over quality of life, medical decisions, and even end-of life (DNR) decisions. We only need to think back to 2005, and the case of Terri Schiavo to understand how important this document can become. Regardless of your opinion on that case, it demonstrates the angst that families can confront with or without planning.
The second must-have is a Power-of-Attorney (POA) document. This document authorizes an "attorney-in-fact" to act on your legal behalf. Without this, any legal asset that is in your sole name alone cannot be touched without a court order. For example, without a POA, no one can access your IRA (or 401k, etc.) account - not even your spouse.
As you can see these later must-have estate planning documents deal with you and your families living needs not just their needs after death. Not preparing these documents before a life altering event or health change, may prove costly - because it may be too late. While you might not be cognizant (care) - your family may struggle without them.
I have my estate must-haves. Do you?
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