Provided by James A. Carolan, CWS®, CTFA | Sr. Estate Planning Attorney for EWM Legal Solutions
In 2008, Congress recognized the need for the public to understand the importance and benefits of estate planning by passing House Resolution 1499, which designated the third week of October as National Estate Planning Awareness Week. Nevertheless, according to a 2021 survey conducted by Caring.com, only 33 percent of adults in the United States have any estate planning documents, such as a will or trust, even though approximately two-thirds of the respondents viewed such documents as somewhat or very important. [1] Many respondents attributed their lack of estate planning to procrastination. Still, many others mistakenly believe estate planning is unnecessary because they need more assets.
Why should you have an estate plan?
An estate plan can provide significant peace of mind by ensuring that your money and property are protected, plans are in place if you become ill, and your accounts and property are passed down according to your wishes.
What key elements of an estate plan should you consider?
Do you have a last will and testament or a trust? If you do not have these critical documents, state law will determine who will inherit your property—and it may not occur as you would have chosen. In addition, someone appointed by the court, instead of a trusted person of your choosing, will be responsible for caring for any children or pets and winding up your affairs. Spelling out your wishes in a will or trust will also prevent unnecessary confusion, anxiety, and expense for your loved ones when you are gone.
Are the proper powers of attorney in place? A General Durable Power of Attorney (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 affairs. A medical power of attorney – Patient Advocate Designation – names a person you trust to make medical decisions when you are unable to speak for yourself. As part of your Patient Advocate, an advance directive or a living will statement memorializes your wishes concerning your end-of-life care, such as whether you want to receive life support if you are in a vegetative state or have a terminal condition.
Do you have insurance? Suppose you become incapacitated (unable to manage your affairs) or die. In that case, your family or loved ones need information about your insurance (such as life, health, disability, long-term care, etc.) to file any necessary claims. Having the right amount of coverage is also crucial if you become ill or die, leaving behind loved ones who rely on your financial support.
Compile a list of your accounts and other important information needed to manage your accounts and property. At the same time, you are incapacitated 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 your services is also essential. The list should include their contact information so your loved ones can easily reach them if you or they need the professional’s help. You should also have HIPAA authorizations with medical professionals to ensure your loved ones can obtain the required information.
How can you encourage your loved ones to create an estate plan?
Estate Planning Awareness Week is a great opportunity not only to take steps to make sure your estate plan is in place but also to talk to your loved ones, especially elderly parents, about creating an estate plan. Estate planning is often a complex topic to broach because it brings the unpleasant issues of aging and death to our minds. Here are a few tips to help you start the conversation.
Be sensitive to your loved ones’ feelings. Put yourself in their shoes and remember that few people are eager to dwell on the subject of their death. One way to begin the conversation is to talk first about the need to plan for an illness and provide instructions if they become too ill to communicate with doctors or handle financial matters for themselves. The conversation can then progress naturally to the importance of having an estate plan that will transfer their money and property in the way they wish, provide for the care of any dependents or pets, and minimize taxes, court costs, and legal fees. Communicate that you are not trying to control their decisions but only want to ensure that their wishes regarding their medical care and property are known—and that all of their instructions are in writing to guarantee that they are carried out.
Involve others in the conversation. If you are planning to speak to your parents about the need for an estate plan, try to include any siblings in the discussion to avoid giving the impression that you are attempting to influence or control your parents’ choices. You and your siblings should emphasize to your parents that none of you is asking about what you will inherit but instead want to make sure that their wishes are carried out if they become ill or pass away.
Consult an estate planning attorney. An experienced estate planning attorney can help you and your loved ones create an estate plan tailored to meet your unique needs and carry out your wishes, or they can assist with updating an existing estate plan. We can provide each person with guidance and information about their options. Further, we can help each of you put a plan in place that will prevent unnecessary stress, legal expenses, taxes, uneven inheritances, disputes among loved ones, and delays in passing life savings on to them. In addition, our guidance will give you and your loved ones the peace of mind that comes with knowing that plans are in place for your care if any of you become ill and that your wishes will be honored when you pass away. Call us today to set up a meeting.
Where to Start?
Contact me at EWM Legal Solutions. I’m here to assist you in these kinds of legal matters, helping you protect what you care about most.
James A. Carolan, CWS®, CTFA
Sr. Estate Planning Attorney
[1] Daniel Cobb, 2021 Wills and Estate Planning Study, Caring.com, https://www.caring.com/caregivers/estate-planning/wills-survey/ (last visited August 17, 2021).
Executive Wealth Management and EWM Legal Solutions are separate but affiliated companies. Executive Wealth Management (EWM) is a Registered Investment Advisor with the Securities and Exchange Commission. Reference to registration does not imply any specific level of qualification or skill. Investment Advisor Representatives of EWM offer Investment Advice and Financial Planning Services to customers located within the United States.
