Nobody wants to think about death and incapacity. However, not thinking about these issues will not make them go away. The reality is that all adults need to consider what they would like to have happen in case these life events come along unexpectedly—and they almost always do. Here is a short guide to the types of estate planning that should be in place based on different stages in life:
Each adult (18 or older) should have a minimum of a property power of attorney, healthcare power of attorney, and living will. In some states, an adult should also have a mental healthcare power of attorney. These documents will facilitate the management of property and healthcare decision making should you become seriously ill and incapable of handling your affairs. Every adult should also execute at least a simple will that will designate who will receive assets should you die. You may not prefer the distribution of assets provided for in the intestacy laws of your state, which will generally distribute your assets to your parents or siblings.
Unmarried Adults in a Committed Relationship
Estate planning is particularly important for unmarried adults in committed relationships. If these individuals do not plan their estates, the law will generally not favor their partners in distributing assets or allocating decision making powers. Having at least a basic estate plan in place may be the only way to insure that a partner inherits or is able to make decisions in the case of a partner’s incapacity.
In addition to having the minimum estate planning documents in place, a married couple should also consider financial aspects of estate planning. This would include making beneficiary designations for retirement accounts and purchasing life insurance to provide for a spouse should the other spouse die. If the couple has children, they need to make sure to designate guardians for their minor children in their wills. Failure to designate guardians may result in the appointment guardians that the couple may not agree with. A couple with children should also consider creating a living trust to manage a minor child’s inheritance or to protect an adult child from poor decision making.
Wealthy Individuals or Couples
Wealthy individuals or couples should consider advanced estate planning to protect their estate from tax exposure. Advanced planning tools may include family limited liability partnerships (FLLP) to gift interests in businesses or farms to family members over time, irrevocable life insurance trusts (ILITS) to shield life insurance proceeds from estate taxes, and charitable remainder trusts (CRT) to provide current tax deductions and reduce a future taxable estate.
Elderly or Failing Health
While every adult should have their estate plans reviewed every few years, it is critical for those who are elderly or in failing health to have their estate plans reviewed. An estate plan review will ensure that an estate plan is in good order and identify any new issues that should be addressed. Reviewing healthcare documents is particularly important to ensure that the correct people will be making medical decisions and that the individual’s end of life decision are clearly known. It may also be wise to make copies of these important document and supply them to the appropriate parties to ensure rapid utilization in case of emergency or sudden need.
Whatever stage of life you are in, take the time to consider what you would like to happen if you become incapacitated or die and meet with a qualified estate planning attorney to prepare the appropriate documents.
About Morris Hall:
At Morris Hall, we have focused our legal practice on estate planning for over 40 years. Along with estate planning, our attorneys help clients and their families with matters of probate, trust administration, wills, power of attorneys, business planning, succession planning, legacy planning, charitable gifting and other important legal aspects. We also have divisions in financial, real estate and accounting to help you incorporate all of your planning together, insuring that everything works perfectly for your needs and situation. Our Arizona offices are located in Phoenix, Mesa, Scottsdale, Tucson, Prescott, Flagstaff and Arrowhead. Our New Mexico offices are located in Albuquerque, Las Cruces and Santa Fe. Contact us today at 888.804.5340 to schedule an appointment!
This blog should be used for informational purposes only. It does not create an attorney-client relationship with any reader and should not be construed as legal advice. If you need legal advice, please contact an attorney in your community who can assess the specifics of your situation.