It is believed that either Benjamin Franklin or Mark Twain said “Nothing is certain except for death and taxes.” Not having appropriate estate planning documents to address both of these certainties is a mistake. The fact is that we don’t know when we’re going to die. Nor do we know when we might become incapacitated due to an accident or sudden illness such as COVID-19.
Wills and Trusts
If you die unexpectedly and your estate planning documents are out-of-date, confusing, or nonexistent, settling your estate is likely to be much more complicated and expensive.
For example, when singer/songwriter Aretha Franklin died in 2018, her family thought she had died without a will, but nearly a year later, three different handwritten documents were found discussing her estate plan, leaving no clear-cut answer as to which (if any) of the documents is a valid will, resulting in expensive and time-consuming arguments in court.
Author/filmmaker Michael Crichton died during his wife’s pregnancy, and he hadn’t updated his will to provide for the unborn baby. His daughter from a previous marriage fought the petition to designate the baby an heir. The court decided in the baby’s favor, but again, not having up-to-date estate planning documents resulted in expensive litigation and delayed distribution of the estate.
Further, if you die without appropriate estate planning documents, your property may be distributed in accordance with state law rather than your wishes. For instance, when singer/songwriter Prince died without a will in 2016, the court found that his estate should be distributed to his sister and five half-siblings, although he wasn’t on the best of terms with all of his siblings.
By planning now, you can ensure that your assets go to those you want to have them. In fact, by creating a distribution plan, you can give some things to people while you’re still alive and able to see them enjoy those benefits, while arranging to have the remainder of your estate transferred on your death.
You can also identify the people you’d like to handle your estate and to care for your children. You can arrange to have children receive your assets only after they reach a certain age and protect disability benefits for beneficiaries with special needs.
Finally, if your net worth is high enough that estate taxes are a concern, you can plan ahead to reduce or eliminate the tax burden (unlike actor James Gandolfini whose estate ended up owing $30 million in estate taxes).
Incapacity
Advance directives and durable powers of attorney are important to help ensure your wishes are met if you’re incapacitated.
An advance directive is used to describe your desires with respect to life support and the like, as well as to appoint someone to make healthcare decisions for you if you can’t do it on your own.
A durable power of attorney allows you to appoint someone to act for you in non-healthcare situations when you’re incapacitated. For instance, you can appoint someone to handle your banking and manage your investments.
To avoid problems, ensure that any financial or healthcare power of attorney you execute clearly states that it supersedes any previous version. Collect any superseded documents you’ve distributed and destroy all copies.
Following this advice would have greatly simplified the medical care decisions for actor/radio personality Casey Kasem. In 2007, he had signed an Advance Directive putting one of his daughters from his first marriage and her husband in charge of his health care decisions should he become incapacitated.
In 2011, Kasem gave power of attorney to his second wife, Jean. Later, as he suffered from Lewy body dementia, his wife and his children from his first marriage battled over who would decide how to care for Kasem.
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Please feel free to contact us if you have questions about or need assistance with your estate planning. Remember, it’s important not to put off your estate planning. We have established safety procedures in light of the COVID-19 pandemic so that you can safely complete this important task.
You may also be interested in obtaining a copy of Estate Planning (in Plain English), written by members of this law firm and available through Amazon, Barnes and Noble, Bookshop (an online bookstore that allows you to support your favorite independently owned bookshop), and wherever self-improvement books are sold.
Photo by Estée Janssens on Unsplash.jpg
