Trust & Estate Planning
Contemplation of death isn’t a fun or easy topic. On occasion, during estate planning meetings with clients, a few people have even stated “if I die” rather than “when I die.” The mortality rate for this life is 100%; no one makes it out of here alive. Planning is part of being a responsible person. It’s easier for the people still here to have a set of instructions, rather than to go through the transition of a loved one’s final affairs without any guidance or road map.
If your estate plan is "no plan", then all your assets will be distributed per Indiana statute. Meaning, strangers have determined your beneficiaries: including that adult child you haven’t seen in ten years, your ex-spouse who is still listed as a beneficiary on your big life insurance policy (not your current spouse). What if you’re singe with no children, then your siblings and parents are your beneficiaries. Meaning, strangers have determined who your beneficiaries are. That adult child you haven’t seen in 10 years – he’s included. The ex-wife who is still listed as a beneficiary on your big life insurance policy – that goes to your ex not your current spouse. Single person with no children, then your siblings and parents are your beneficiaries.
Do you have a power of attorney instrument? What about a living will or advanced health care directive? Who will make decisions for you when you are unable?
What’s the First Issue to Tackle?
What is a Will, Trust, Power of Attorney instrument, or Living Will/Advanced Health Care Directive?
- A Will is a document that nominates a person to wind up your final affairs (Executor, Executrix, or Personal Representative). This person is tasked with collecting all your assets, paying your final bills and taxes, then distributing those assets as instructed in the Will. Depending on the value of the estate, the Personal Representative will most likely have to paperwork filed with the Court before the Estate can be opened.
- A Trust is an estate planning vehicle. Depending on how the trust is written, it can be used to hold assets while the Settlor (the person creating the trust) is still living, when the Settlor passes, or both. Depending on how the trust is written, it might be amendable or not. When the Settlor passes, the Trustee or Successor Trustee will collect all assets that are in the trust or that become part of the trust, pay outstanding bills and taxes, and distribute those asset as instructed by the Trust. The Successor Trustee does not have to file paperwork with the Court to start the final distribution phase of the Trust.
- A power of attorney (POA) instrument can be very broad or specific in the powers it conveys. Usually in estate planning, a general durable POA is utilized. This has very broad powers and goes into effect the moment it is signed. It allows the agent to act for the principle.
- A Living Will is a document used to appoint a Health Care Representative who will make final health care decisions for you when you are not able.
The Second Issue to Tackle?
After meeting with estate planning attorney to determine what best fits your needs, the next decision is what to do with your belongings? Are there specific items that you would like specific people to have? Are there people in your life that you do not want to inherit your estate? How do you want the remainder of your estate to be distributed? Do you have any beneficiaries who have special needs, or money management issues? Are any of the beneficiaries minors? These are just a few of the numerous issues to be considered when planning estate documents.
The next thing to think about is who would be a good person to nominate to be your Personal Representative? Who should be your agent under POA or your health care representative? Pick someone who:
- has time available to act in this capacity
- is fiscally responsible
- is ethical
- good with money or understands hospital/healthcare issues
Do not pick someone to act in such a capacity for you:
- soley based on birth order
- soley based on gender
- who has money issues
Seek Guidance from a Knowledgeable Estate
Estate Planning can be a very large, complex process or a very simple process. Having an experienced attorney to help you through your estate plan will relieve you of some of the stress and burden this process can entail, regardless of the size or complexity.