By Robert Chang, Esq
For many people, planning for death is a scary prospect. Unlike divorce or loss of a job, it is inevitable. Still, there are those who are superstitious about estate planning and put off planning for what Benjamin Franklin sees as one of the two sure-things in our life – the other being taxes.
Everyone should have a will. A person who dies without a will is said to be intestate. Intestacy proceeds through an automatic transfer process – in this way, everyone practically speaking already has a will provided and written into statutory law in the state where you live. However, if you and your loved ones aren’t aware of how intestacy in your state works, it can cause a lot of grief for everyone. Much of estate planning is making sure that family and friends are aware of what you are planning to do, and making sure they are not burdened by these important financial decisions while they are undergoing emotional grief. This is not just because it is not fair for them, but because making important financial decisions when emotional is more likely to lead to bad decision making.
For example, if you have a child or a sibling who is receiving public benefits or is in school, the money they receive could be regarded as income. As a result, it could cause them to lose the benefits they are receiving such as Medicaid, SSI, and Food Stamps. Even if they are not lost permanently, it could cause them to have their income disrupted, and create another laborious bureaucratic maze they have to circumnavigate while planning the logistics of your funeral and emotionally dealing with their loss.
Another important factor that people forget when doing their estate planning is not planning properly for what comes before death – and which sometimes is even more important and painful. Not only can incapacity or disability be devastating to the person experiencing it, but also to the people who must take care of the incapacitated person. Having documents prepared which let your loved ones make financial decisions for you can alleviate their financial situation. Having health decisions made for you when you are taking strong medication or unable to speak is not only practical, it is a relief for the people who have to make decisions on your behalf. Called a living will in other states, an advanced health care directive overrides the very stringent privacy requirements of the HIPPA laws and allow your loved ones to obtain your health information and decide what treatments you receive. This is important if you are in a coma or have significantly lost your memory. Similarly, a durable power of attorney allows them to access your financial accounts so that your bills are being paid.
Many people are afraid of losing their independence, as you have less of it the older you get. The important thing to remember about both an advanced health care directive and durable power of attorney is that they are not effective unless it is proven you are incapacitated. This is not just someone saying “Oh, my father has dementia – you don’t have to listen to him” but requires a doctor to make a diagnosis which can be (but not necessarily) addressed in a court before a judge. This protects your independence but also creates a conduit for others to take care of you only if it is absolutely necessary.
The internet has made it easy for people how to learn to do everything themselves. Going on Youtube, I am able to quickly learn how to replace my car’s rear left turn signal, properly iron my pants, or prepare a fajita dinner. Most people don’t have stockbrokers or insurance agents anymore – they can do it themselves. This is both stressful and liberating – liberating because we are more self reliant, stressful because we are never sure if we did it correctly. When the stakes are low, these things are not as important. However, when it comes to estate planning, it is important to make sure that mistakes are not made at all because most people don’t find out that something was done incorrectly until it is too late.
If you have questions about preparing a Will, Durable Power of Attorney, or Advanced Healthcare Directive, contact DP Legal Solutions or call to schedule an appointment: 510.346.5686. Having someone prepare a will for you can save a lot of time for you and your loved ones.
This article contains general legal information and does not contain legal advice. DP Legal Solutions is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please consult with a lawyer.