National Estate Planning Awareness Week runs each year during the third week of October (making this year’s dates October 18-24). This national week was established by Congress in 2008 after they recognized the need for the public to understand the importance and benefits of estate planning.
A 2021 survey conducted by Caring.com found that only 33% of adults in the United States have any estate planning documents (such as a will or trust). This is despite the fact that two-thirds of respondents believed such documents as somewhat or very important.
Why, then, are so many people lacking these important documents? Many people blame procrastination, but others hold to the mistaken belief that estate planning isn’t necessary because they don’t have many assets.
Why should everybody have an estate plan?
Everyone who wants to make sure their money and property are protected, create plans in the event they become ill, and pass down their accounts and property according to their wishes should make an estate plan.
What key elements of an estate plan should you consider?
Although estate plans can be complex, there are a few key elements to start with.
Last will and testament or a trust: these important documents will keep the state from determining who will inherit your property - and their choices may not align with your wishes. Additionally, a person chosen by the court instead of yourself will be in charge of caring for any minor children or pets. Clearly spelling out your wishes in a will or trust will also prevent unnecessary confusion, anxiety, and expense for your loved ones when you’re gone.
Powers of attorney: a financial power of attorney designates an individual to make financial and property decisions (e.g., opening a bank account, signing a deed, getting your mail, etc.) should you become unable to handle your own affairs. A medical power of attorney designates a person you trust to make medical decisions for you when you are otherwise unable to speak for yourself.
Advance directive: also called a living will, this memorializes your wishes around your end-of-life care, such as whether you want to receive life support if you’re in a vegetative state or have a terminal condition.
Insurance: If you become incapacitated (unable to manage your own affairs) or die, it’s important for your family or loved ones to have information about your insurance (such as life, health, disability, long-term care, etc.) so they can file any necessary claims. Having the right amount of coverage is also important in case you become ill or die, leaving behind loved ones who rely on your financial support.
A list of all of your accounts and other important information that may be needed to manage your accounts and property while you are incapacitated or to settle your affairs after you are gone. Keep this information in a safe place and share the location only with trusted family members or other loved ones. This list should include at least the following information:
bank and investment accounts
titles to vehicles and homes
credit card accounts or loans
digital accounts (such as Facebook, LinkedIn, and Twitter) and passwords
Social Security card, passport, and birth certificate
A list of legal, financial, and medical professionals who have performed services for you is also important. The list should include their contact information so your loved ones can easily reach them in the event you or they need the professional’s help. You should also have HIPAA authorizations in place with medical professionals to ensure that your loved ones can obtain needed information.
What are some ways to encourage your loved ones to make an estate plan?
Even if you already have an estate plan of your own, Estate Planning Awareness Week is a perfect excuse to talk to your loved ones (especially elderly parents) about putting together their estate plan. Often, this can be a sensitive and/or uncomfortable topic because it forces us to think about aging and death. Here are a few tips to help you approach this topic.
Approach the conversation with great sensitivity. Few people are eager to discuss the subject of their own death. One way you can start the conversation is to mention the need to plan ahead for potential illness. If they become too ill to make their own medical or financial decisions, a proper estate plan will allow them to choose who they’d like to step in and make these decisions. The conversation can then progress naturally to the importance of having an estate plan that will transfer their money and property in the way that they wish, provide for the care of their dependents and/or pets, and minimize any taxes, court costs, and legal fees. Emphasize that you’re not trying to control their decisions, but that you only want to make sure their own wishes are known, and that getting these wishes in writing is the only way to guarantee they’re carried out.
Involve your siblings in conversations with your parents. If you’re planning on speaking to your parents about creating an estate plan, it may be in your best interest to include your siblings in the discussion. You don’t want to give off the impression that you’re trying to influence or control your parents’ choices. You and your siblings could also emphasize that no one is asking about what they will specifically inherit, but just that they want to make sure their wishes are carried out if they become ill or pass away.
Consult an estate planning attorney. An experienced estate planning attorney knows how to help you and your loved ones create an estate plan that will carry out your wishes and meet each of your unique needs. They can also help update an existing estate plan.
Santaella Legal Group can help you or your loved ones understand all of the options available and provide guidance when it comes to making tough decisions. Further, we can help each of your put a plan in place that will prevent unnecessary stress, legal expenses, taxes, uneven inheritances, disputes among family members, and delays in passing life savings on to them. You’ll walk away with the peace of mind that comes with knowing that plans are in place for your care and your wishes will be honored if you become ill or pass away. Call Santaella Legal Group, serving San Ramon, Danville, Dublin, Pleasanton & the Tri-Valley area, at (925) 831-4840 to set up a consultation.