There is, of course, no universal advice or plan that applies to everyone’s estate planning needs. The following is offered merely as general advice and an attorney should always be consulted.
I. ESTATE PLAN:
First, and foremost, any estate plan should include making every possible provision for the conveyance (transfer) of property upon death without the necessity of going through the Will or becoming a probate asset. Aside from the delay and complexity involved in probate proceedings, the cost of doing so dictates making whatever direct arrangements are practical.
Accordingly, the Will should be thought of as nothing more than a stop gap for anything that you did not, or could not, arrange to have transfer automatically upon death. Anything that has a deed (home and real property), a title (car) or is the subject of a contract (bank accounts, IRAs, 401Ks, annuities, pensions, life insurance, etc.) can be set up to automatically transfer upon death. These provisions are, generally, called Survivorship as to Deeds and Titles, TOD or POD (transferable or payable on death) as to Bank Accounts, and beneficiaries as to the rest.
Aside from the deed to the house and making a Will, you should be able to set up all the rest without an attorney doing so for you, but you must be sure it gets done. If you do so, there should be no estate to probate and, therefore, the Will never comes into play. There is nothing dumber than having to open a probate case just to transfer the title to a car that is, generally, worth less than the cost of filing the probate case.
II. FUNERAL ARRANGEMENTS:
If you can bring yourself to do so, go make your own pre-paid funeral arrangements. You can bargain and negotiate with these folks, your surviving family can not. Furthermore, grief, guilt, and surviving children second guessing each other, can permit an unscrupulous funeral director to drive these costs out of sight. There are several pre-paid options that allow you to save a great deal of money, relieve your family from anguish and indecision, and insure that your wishes are timely communicated and carried out. Shop around! Never put your wishes and directives in this regard in your Will or Safe Deposit Box, since no one will find them or see them until it is too late.
Remember, banking and IRS practices require a safe deposit box to be sealed upon death, so this is a poor choice to store anything that your loved ones may need more immediate access to: pre-paid funeral arrangements; funeral wishes and directives, and even your Will and other important papers.
III. POWERS OF ATTORNEY:
You will need to make provisions for the possibility that there will be a period of time before your death that you are unable to make your own health care decisions or handle your own financial affairs. Like Wills and Deeds, this will, generally, need to be done with the assistance of an Attorney. A common, and very serious, mistake, is assuming that the Living Will or Health Care Power of Attorney form off the internet or from a Hospital or Doctor is adequate. Aside from the fact that something this serious should be more completely explained to you, and potentially customized, it does absolutely nothing to help your family pay your bills or handle your financial affairs.
A Health Care Power of Attorney appoints someone you trust of your choosing to direct your health care decisions. A Living Will form usually covers specific directions as to what kind of medical treatment your care givers will give you or are not allowed to give you. A Health Care Power of Attorney crafted by an Attorney will generally provide customized provisions of both forms.
More importantly, however, in addition to a Health Care Power of Attorney, you need to consider a Durable Power of Attorney because only this document will allow your family to manage your finances while you are unable to do so yourself.
IV. ORGANIZATION, COPIES & STORAGE:
Organize all of the above: Conforming Copies of Wills (not original, see below), Health Care Power of Attorney, Durable Power of Attorney, Deeds, Titles, Contracts, latest Account Statements, papers for anything that has a Death Benefit, Pre-Paid Funeral Contracts, your last letters to loved ones, and your personal wishes as to funeral arrangements, or any other important papers for all of this into one organized place and let the person you expect to be handling these matters know where they are or, if you are comfortable doing so, go over it with them. Invest in a fire resistant filing container to keep these documents, however, consider making a copy and putting them in a sealed envelope to keep in another secure location known to the person you expect to be handling these matters.
Only the original Will is legally valid, however, it is a good idea to ask your attorney to provide you with two (2) Conforming Copies of the original Will, one for you and one for the person you expect to be handling these matters. Most Attorneys will keep the original Will in a Fire Resistant Filing system as a free service and provide you with Conforming Copies that will advise where the original Will is located. Filing the original Will with the Probate Court is an option that is, generally, no longer practical for a good many reasons.
V. ASSET PRESERVATION:
Finally, you need to consider the issue of tax consequences and choices that may diminish, or even eliminate, the State’s ability to recover the cost of long term care from the value of your home or other assets. Medicare, Medicaid and IRS regulations are both complex and ever changing and should be discussed in person. There are, however, three hard fast rules when it comes to such matters.
* First, never let the tail wag the dog. Asset preservation should be a motivation to tweak your Estate Plan, it should not be allowed to distort or complicate beyond all practical recognition your clear and concise wishes for the distribution of your assets.
* Secondly, involve as many available experts in these decisions. Involve your tax advisor and/or financial planner in a team effort under the direction and coordination of your attorney as your team leader.
* Finally, since these regulations are constantly changing, you should review your Estate Plan with your team from time to time.