ESTATE PLANNING 101: Why you need an estate plan at any age
Ask a friend, neighbor, co-worker or family member whether or not they have an estate plan, and the reaction you receive will vary from: “What’s that?” to “I’m not rich so why would I need one.” to “Yes, I did one back when my kids were younger.” An estate plan consists of those documents that transfer your assets upon your death (be it a will or trust), as well as those documents that plan for your inability to manage your personal affairs while you are still living (a financial power of attorney, healthcare power of attorney and a living will).
When completing an estate plan, there are four documents that are traditionally done: General Durable Power of Attorney for Finances and Property, Healthcare Power of Attorney, Living Will, and a Will. The first three documents come into play while you are still living but unable to manage your affairs, while a Will plans for what happens upon your death.
General Durable Power of Attorney for Finances and Property (GDPOA): This document allows you to name an agent to manage your financial affairs in the event that you are unable to do so yourself. There is no requirement that you be deemed incapacitated or incompetent in order for your agent to act on your behalf. The GDPOA is an extremely important document, and most adults should have one, but many do not.
Healthcare Power of Attorney (HCPOA): The HCPOA is the counterpart to the financial power of attorney in that you name an agent to make healthcare decisions for you when you are unable to make those decisions yourself. It differs from the GDPOA in that you must be determined by your physician to be incompetent or incapacitated in order for your agent to make healthcare decisions for you.
Many people will question why they even need a HCPOA since they are currently healthy. Executing this document while you are healthy is precisely when you should do it. If a medical emergency arises, you typically will not be in a position to execute a HCPOA. If you are deemed unable to make your own healthcare decisions during the course of such an emergency, a guardian would have to be appointed to make those decisions for you. A guardianship is not an ideal situation since you do not get to choose who your guardian will be, it requires a Court hearing, and it can be costly.
Living Will: The Living Will goes hand-in-hand with the HCPOA, and we encourage our clients to execute a Living Will along with the HCPOA. The Living Will is a Wisconsin Department of Health and Human Services form which contains three yes or no questions establishing the signor’s desires regarding feeding tubes and life sustaining procedures. The Living Will provides guidance to the healthcare agent as to your desires, and it informs your physician of those desires in the event your agent is unable to make a decision regarding feeding tubes and/or life sustaining procedures.
Will: Having a will in place can give you the peace of mind that your estate will be distributed as you desire and that loved ones will be properly cared for. Your Will allows you to name a personal representative who will take care of settling your final affairs.
In addition a Will allows you to name a guardian for your minor children, and to safeguard the money left for those minor children by establishing a trust. A trust typically ensures your money and assets are to be used for your children’s health, support, education and maintenance after your death. Once your children get to an appropriate age, as determined by you, the balance in the trust can be distributed to your children. Without a Will, the Court would appoint a guardian for the minor children, and your money and assets would be available to your children once they reach the age of 18.
A Will also allows you to dictate how you want your assets divided. Most people want to leave their assets to loved ones. However, there may have been a falling out with a relative over the years, and you decide you do not want him/her to inherit from you. Without a Will, that person could inherit from your estate. Further, if you want to leave money to a charity or a friend, you would need a Will to do so. You can even plan for the care of a beloved pet in your Will. If you die without a Will, these decisions will be left up to Wisconsin law, which may or may not be agreeable to you.
It is never too early to get your estate plan in place today. For further information or to schedule an appointment, please contact Atty Jill Verich.(Jillayne-Verich@mennlaw.com ) All Menn Law attorneys may be reached by phone at 920-731-6631 to discuss the legal issues you may require.