Creating an estate plan is something that often sits on parents’ to-do lists for years — one of those unchecked boxes we’ll get to eventually. Being in the midst of a global pandemic may be the motivation we need to get our affairs in order.
Though your chances of becoming incapacitated or dying from COVID-19 may seem remote — even as nearly 400,000 Americans and 2,800 Arizonans have died from the virus in a matter of months — there’s something to be said for the peace of mind of outlining how our children will be cared for if the worst should happen for any reason.
Estate planning is not just for the wealthy. If no plans are in place, a judge who likely does not know you or your family will decide what is in the best interest of your children. And probate — the court-supervised process for managing assets and appointing guardians — can be more costly than proactive preparation. Here are answers to some of the common questions I hear from families.
If my assets and affairs are fairly modest, do I really need an estate plan?
Sometimes the word “estate” makes people think planning is only for the wealthy. However, estate plans do not have to be overly complicated or expensive, and everyone should have some sort of a plan in place.
An estate plan includes documents to ensure that you are cared for during any periods of incapacity — including who will make your healthcare and financial decisions and see that your children are cared for. An estate plan provides for guardianship of your children and the distribution of your assets if you die. Some plans can help your estate avoid probate altogether.
What could happen to my kids if I die without an estate plan?
Ensuring that children are cared for is a primary reason parents of young children form estate plans. The best way to be certain that your children would be cared for by the person or people you choose is to put plans in place. If both parents die, and there is no estate plan, any interested party can petition the court for guardianship of your children. A judge who does not know you, your children or your family will hold a hearing. Considering only the information presented at that hearing, the judge will decide what is in the best interest of your children.
The guardian and conservator appointed by the court will have the responsibility of caring for your children and their finances until they reach the age of 18.
Guardianship decisions are difficult, and for some parents, there is no obvious choice. However, I still recommend you go through this process and list the option that is currently the best (or at least not the worst) choice. Remember that you can always change your documents if circumstances change.
What documents do I need to put together before meeting with a lawyer to start my estate planning?
Being prepared can save you time and money. You certainly don’t have to have all decisions made before meeting with your lawyer, who will spend much of your first meeting answering questions and giving guidance. But it is helpful if you have thought about who you would like to name in your documents to care for your children, manage your money and make health care decisions if you are unable to do so.
If you are married or in a committed relationship, your first choice may be your spouse/partner, but I recommend having at least one backup person. Have each person’s address and phone number with you.
It is also a good idea to list your assets and their approximate value, including checking/savings accounts, brokerage accounts, retirement accounts, real properties and business interests. Some attorneys will send you a questionnaire to fill out before your first meeting. Review it and fill it out to the best of your ability, but do not let it become a stressor or roadblock to your planning. It is meant to gather information and to have you start thinking about the types of decisions that will be made.
Do you have any tips on deciding who will be in charge of handling my estate?
This is an important decision. After paying your debts and taxes, this person will oversee distributing your assets as you have instructed in your estate plan. In most circumstances, you want to provide for your children and their education, but you do not necessarily want them to be handed large checks on their 18th birthdays. To address this issue, you can set up a trust for your children. The person you name as your successor trustee will oversee the trust until your children reach the ages where your trust allows them to have the money outright.
The person you choose for this responsibility can be the same person who will be named as guardian to care for your children, or you can choose someone different. Either way, you want to think about your family dynamics. Ideally, this person is someone who has a healthy relationship with your family members and children. This person also should be someone who is responsible with finances.
What exactly is a living will?
If you are unable to make your own medical decisions, your estate plan should name a health care agent to make medical decisions on your behalf. A living will gives guidance to your health care agent regarding life-sustaining interventions you would want under certain circumstances, such as if your death were imminent from a terminal condition or if you were in an irreversible coma. Life-sustaining interventions can include feeding tubes, hydration tubes, CPR and more. Some people are hesitant to sign a living will, because they are afraid that doctors will stop trying to treat or cure them. However, the living will does not come into play until doctors have taken the steps necessary to be reasonably certain of your condition.
How do I choose a lawyer to handle my estate plan?
You will be discussing intimate details of your finances and family relationships with your estate attorney. It is important that you choose someone you feel comfortable having these conversations with (or as comfortable as these conversations get), and that your attorney fully listens to understand your specific circumstances. Your attorney should explain concepts and documents in a way that is understandable to you.
One reason estate attorneys choose this area of law is because we enjoy working with individuals and families who are taking steps to care for themselves and others. I think it is important that estate attorneys establish ongoing relationships where clients are comfortable reaching out with questions or concerns in the future.