Many people think estate planning means deciding what happens to your things when you die. For that reason, many young families do not consider estate planning to be a priority. However, it may be one of the most important things young parents can do!
A will or last will and testament is the document in which parents can state who they want taking care of their children if the parents should die and who should manage the money available to care for those children. And, in our opinion, it is not wise to assume that the same people should do both. Separating those who care for the children from those with free access to the money left behind is often a very smart choice.
Without those types of instructions, however, those left behind can have drastically different opinions about where the children should live and how they should be cared for. And if the families feel strongly enough about those issues, suddenly both families, and especially the children, have incredibly difficult challenges ahead. Not only are they mourning the loss of the parents, but now everyone may be lined up in some type of legal battle that will drain resources and divide loved ones. No parents intend to leave that legacy, but because this scenario will likely not happen to them, they don't take the simple steps that would avoid all of this additional cost and emotional trauma.
There are other important issues an estate plan should address which have nothing to do with your assets. A proper estate plan should also address what happens to you if you become incapacitated.
Somewhat related to the purpose of a last will and testament, a living will, also called an advance directive, is a vital part of a complete estate plan because it answers so-called "end of life" questions, most notably what to do if someone must be kept alive by artificial means. Most people do not want their loved ones making those immensely difficult choices, but unless they complete an advance directive, that is precisely what they have done.
And, for purposes of this column, the last document an estate plan should include is a medical durable power of attorney. This document deals with almost all other medical decisions than those dealing with end of life. Without a medical power of attorney, someone who is not near death but unable to make their own medical decisions has left their family, and especially their medical providers, in a bad situation. By contrast, those who have designated an agent to make medical decisions have, once again, spared their families from additional pain and emotional distress.
In summary, the real question everyone faces is, "Who do I want making my estate plan?" If the answer is, "I'll get to that later," then the real answer is "someone else." And in those cases where a person leaves behind no specific guidance on any of these issues, then those they care about most will actually suffer the most, and that always compounds the tragedy and the loss.
Brad Wright's business and estate planning practice includes transactional and litigation matters with a special focus on business succession and estate planning. His brother, Steve, has a similar law practice in Idaho Falls, Idaho, and together they assist businesses of all sizes and types with a wide variety of legal issues. Email email@example.com or firstname.lastname@example.org if you have questions or topics you'd like to see addressed in future columns.