My son and his wife, who live in another state, recently asked me what they need to know before they meet with an estate planning attorney. I share with you essentially what I sent to them:
You will each need a Will, which designates your Personal Representative (other states call this an “Executor”), who will gather your assets and direct them to the person you designated as beneficiary, for instance for your life insurance or “POD” (payable on death) or “ITF” (in trust for) accounts. The Personal Representative will distribute the rest of your assets as you designate in your Will. If you decide to have a Trust, generally probate will “pour over” the rest of your assets into your Trust.
The other important part of the Will for young families is the designation of a Guardian and Conservator for your minor children. The Will should be written to impact not just children you have now, but any subsequent children, so your Will does not need to be re-written each time. A Guardian cares for their health and welfare, decides where they live, go to school, activities, etc. A Conservator manages the money and determines if there are funds for the Guardian’s decisions regarding your children. Your selection of Guardian and Conservator may be the same person, but doesn’t need to be. It may be good to have different people for their strengths or as checks and balances; or the same people so as not to create conflict. Your choices depend on your circumstances and your people. You should be prepared with alternatives in case your designees are not willing or able to accept these important roles.
If you create a Trust, the two of you will be the Trustors or Settlors (same thing, meaning creators of the Trust) and also the original Trustees (ones who control the assets). If one of you is incapable, the other should be designated to act as sole Trustee. Then, if both are incapable, you should designate at least two alternatives to succeed the two of you as Trustees. These need to be people you trust to manage your money and assets. Your Successor Trustees are not necessarily the same people to make decisions for your health and children, but frequently the same people as you select for Conservator. You also will need to decide if part or all of the Trust becomes irrevocable once one of you becomes incapable or dies. That protects the assets from a subsequent relationship, but also ties the hands of the survivor.
A Durable (so it lasts even if you are incapacitated) Health Care Power of Attorney (“POA”) designates a health care decision maker if you can’t speak for yourself while you are alive. Designees are usually each other, then two alternatives, who know or you trust to learn your health decisions. Be sure this document says that your selection of health care POA would be your Guardian if you ever needed one.
A Living Will sets forth your ideas about extended life support, organ donation, etc. This document is shared with your Health Care designee so that person can make decisions as you would want made.
A Durable Financial Power of Attorney specifies who, while you are alive, can make financial decisions for assets that are outside your trust. It is always good to cover your bases and have this, too. It’s part of the package. Generally, designate the same people as Successor Trustees. Be sure this document says that your selection of POA would be your Conservator if you ever needed one.
Some do-it-yourself forms you can buy in stores or online make it appear that you just plug in names and specifics; however, be mindful that these decisions are some of the most important you will ever make. You should fully evaluate your assets, including those directed through your Will and/or Trust and those that will pass outside of your Will or Trust, your intended beneficiaries, and your agents to carry out your wishes. You also should carefully review drafts and ask your attorney what you do not understand. You need to make sure that your documents reflect exactly what you intend.
Our firm does personalized estate plans and we are happy to meet with couples or individuals to review current estate plans and revise or rewrite them as necessary so you can be sure you get what you want.