A Will, Alone, Is Not An Estate Plan

A lot of people wake up one morning and realize, “it’s really past time that I put an estate plan in place.” And more often than not, their belief is that an “estate plan” means they just need a Last Will and Testament (typically referred to as simply a “Will”). And while a Will is a very important document that makes up a portion of an estate plan, the Will, alone, is NOT the only piece of an estate plan!

What is a Will?

A Will is a document that serves two primary functions: (1) it nominates a person to administer your affairs when you pass away (think closing down accounts, selling real estate, paying expenses and taxes, etc.), and (2) names to whom you want your assets to distribute when you pass away. For younger families with minor children, the Will also nominates a guardian to care for the minor children upon an unexpected passing of the parents.

What assets does a Will govern? 

A Will governs and distributes only the assets that are in your own name individually when you pass away and that do not have a beneficiary designation.

In other words, your Will takes NO effect until after you die. 

So, what happens if you have an accident that leaves you incapable of communicating with doctors and nurses about the care you want or need? Or what if you have cognitive issues later in life that prevent you from handling your financial affairs in a prudent and productive manner?

Do you want a plan for death only, or would you want to make sure your plan actually works for you while you continue living? 

An estate plan shouldn’t just plan for death! It should also address issues you face during life! And if you don’t address the questions posed above and come up with your own answers, then guess what? The State in which you live has a plan for you! Someone will have to be appointed guardian over your medical and/or financial affairs. And that someone may not be the person you would have wanted making your decisions. (Think an estranged child or sibling who you would not have felt comfortable making decisions for you if you had the opportunity to nominate someone). It could be an independent third-party altogether! 

Imagine taking your elderly parent to multiple doctors, as well as in front of a judge in a courtroom, with the purpose of all these different parties determining your parent is incompetent and incapable of making his or her own decisions. And imagine that any nosy neighbor or friend can look up what’s going on and uncover this highly personal struggle. That’s guardianship. It is a public process overseen by a judge to confirm whether a person can or cannot act for him- or herself, often supported by medical examinations. On top of the public nature of guardianship, it can also be timely and expensive, as well as ongoing for the duration of the person’s life (the guardian may be required to provide annual reports to the court to confirm actions/expenses are benefiting the person).

To combat this risk, we often execute powers of attorney for health care and financial decisions. While you are of sound mind and healthy, you have the right to nominate the person or persons you would want to name if something ever happened to you. Powers of attorney are proactive measures you can take to address potential unexpected future emergencies. And added bonus: a power of attorney should supersede the need to go through a court guardianship proceeding.

Make sure your estate plan is planning for your life and not just your death. An effective plan will include multiple documents, all accomplishing something different to make sure you are taken care of.

If you’re looking for an Estate Plan, and not simply a one-off transaction, give our firm a call and schedule your complimentary consultation.