ESTATE PLANNING * PROBATE * TRUST ADMINISTRATION

What is "estate planning"?

 

Estate planning is about managing life transitions.  Your death or incapacity would obviously have serious and far-reaching effects on the people in your life; not only your immediate family and close friends, but perhaps also others such as business partners or employees, organizations you do volunteer work for, and whomever will have the job of caring for you or administering your estate.  Through the estate planning process we consider how your incapacity or death would affect those around you, and take measures to ensure that your loved ones are taken care of and your other responsibilites are met in your absence.  In addition, we organize your property so that your assets are passed to others quickly, easily, and in an organized fashion with minimal cost.

 

"Estate planning" sounds complicated.  Don't I just need a simple will?

 

Maybe.  The estate plans I craft are different for each client, because each client's life circumstances, goals, and values are unique to that person.  The intial consultation is an opportunity for the potential client and I to explore if the services I offer are a good fit for them.  Wills are usually part of the estate plans I craft for clients, but typically they will need other legal documents as well to meet their goals of minimizing administrative cost and difficulty when they pass away or become incapacitated, of passing assets to loved ones in a responsible manner, and of communicating the client's wishes with respect to health care and lifestyle in the event of incapacity.

 

What does a typical estate plan look like for parents with minor children?

 

Parents with minor children are often concerned with making sure their children are taken care of financially, physically, and emotionally should something happen to one or both parents.  The estate planning tools most often included in plans for these clients are:

 

• A "Pour-Over" Will.  The "pour-over" will serves two principal purposes for parents.  It 1) will direct assets accidentally left out of client's revocable trust to the trust when the client passes away, and 2) contains a guardianship nomination indicating to the probate court whom the client would like to serve as guardian of the client's minor child(ren).

 

• A Revocable Trust.  The revocable trust is an estate planning tool that can hold assets during the client's life in such as way so that the client retains complete control over the assets, yet upon the client's death the trust assets will not require probate in order to be passed to beneficiaries.  For parents with children, we often use the revocable trust as an "umbrella" document which will also contain the terms of other, continuing trusts that will spring into existance at the client's death and will appoint another adult, called a "trustee", to manage and distribute the assets to children over time according to the client's wishes and direction.

 

• A Power of Attorney for Asset Management.  The Power of Attorney ("POA") appoints an agent to act for the client with respect to the management of the client's assets that are not held in trust in the event the client is incapacitated.  The agent appointed by the POA may also have powers that allow the agent to act on behalf of the client in many other types of circumstances, such as filing insuance claims, managing litigation, filing tax returns, transferring assets to the revocable trust, etc.

 

• An Advanced Health Care Directive.  The Advanced Health Care Directive ("AHCD", sometimes referred to as a "power of attorney for health care") appoints someone to make decisions about the client's health care in the event the client is ill or injured and cannot communicate.  AHCDs usually include direction to the agent with respect to the client's wishes regarding health care and end of life decisions, but also with respect to organ donation, disposition of remains, memorial service instructions and other final wishes.

 

• The Nuts and Bolts of Caring for Children in Your Absence.  When I work with parents we need to not only plan for care of minor children in the long term should a tragedy occur, but we also need to think about short term care for children.  What happens if the parents are in a car accident while out on "date night" and don't show up to relieve the babysitter?  Whom does the babysitter call?  If the guardians the parents have chosen for long term care of their children are a plane ride away, we will need to choose someone close by who come relieve the babysitter. and care for the kids for a few days until the parents are discharged from the hospital, or until long term guardians can arrive.  We also need to make sure that babysitters have written authority to obtain medical care for children in their parents' absence.  This type of "nuts and bolts" planning is not a traditional feature of estate planning, but is an important part of my practice because making sure their kids are cared for under any foreseeable circumstance is the highest priority for my parent/clients.

 

We can't choose a guardian for our children!  We're stuck!

 

Often choosing someone to nominate as guardian for minor children is the single most difficult planning decision for parents.  Imagining someone else raising our children is very difficult.  But it's a shame when this one issue becomes the stumbling block that prevents parents from achieving their other planning objectives.  Suffice it to say that although I have had many parents come to me who have been struggling with this question for months, if not years, once we start working together we resolve the issue in short order.  Here are some things to keep in mind that I've found help parents come to a decision about guardianship nominations:

 

• We can't replace you.  A guardian is not a replacement for a parent; a guardian is someone appointed by a court to take legal responsibility for a child whose parent(s) cannot do so.  A child who has no parent available to care for them must have a guardian appointed, and the appointment is made by the probate court.  You may communicate your preferences to the court as to who you would like to be appointed guardian, but you are not required to do so.  If you do not communicate your preference to the probate court through your will, the court will make the the decision anyway.  Communicating your wishes, even if you are unsure if you have made the "perfect" decision, is better than giving the probate court no guidance at all.

 

• You don't have the final say.  Sometimes it is the gravity of the decision regarding who should be named guardian that prevents parents from moving forward.  It often is a comfort for parents to know that they cannot appoint a guardian - they are merely communicating their preference to the probate court.  The probate court has the final say.  If the individual nominated by the parent(s) is not able or wiling to serve as guardian, the probate court will appoint someone else.  We make decisions and communicate our preferences based on the information we have on hand, but if circumstances change in the future the probate court will take those changed circumstances into account.

 

• Making a guardianship nomination is often most important when you have many good options.  Sometimes parent clients with many involved family members feel that it is not important for them to communicate their preferences with regard to a guardian.  "They will all figure it out" is something I often hear.  However, I am more concerned for parents with large, involved families than parents with fewer options.  Leaving the guardianship decision to a large committee of family members can become a nightmare for the family, with everyone trying to imagine who you would have chosen, and where you would want your children to live.  The greatest gift you can give to your family in that situation is to make your preferences known and not create a guessing game for your family.

 

• We can nominiate multiple guardians in order of preference.  As mentioned above, by the time a guardian is required, your nominated guardian may not be in a position to care for your children for a variety of reasons.  For this reason we always nominate alternate guardians.  This gives nominated guardians the option to defer to a successor in the event they are not comfortable serving in that role at the time the issue arises.

 

• The financial circumstances of the guardian should not be a deciding factor.  In my opinion the most important factors to consider when nominiating guardians whether they share your values and perspective when it comes to childrearing, along with whether or not the prospective guardian has a good relationship with your child(ren).  The prospective guardian's financial situation should not be the most important consideration.  My clients often choose to provide their nominated guardians with financial support to help them accommodate the client's children into their household.  There many options for how to structure this financial assistance so that guardians are not burdened financially.

 

 

My kids are grown, independent, and financially secure.  Why do I need to do estate planning?

 

Some of the most challenging estate administration situations I have encountered involve a parent of grown children passing away, and the issues that arise among siblings and their spouses.  You may not be aware that your presence keeps simmering rivalries, jealousies, and resentments among siblings at bay.  Leaving your estate to be "sorted out" by siblings with no direction often results in confusion and miscommunication that can damage relationships.  Who is in charge?  Should the family home or vacation home be sold?  What if one child wants to keep the family home but doesn't have the financial resources to buy the others' interests?  What if one child has borrowed money from the parent in the past and the other haven't?  What if one child has helped the parent financially and the others haven't?  Determining how these issues should be handled after your death and appointing someone to be in charge of the administration process can be the greatest gift you can leave your children.  Our primary objective in estate planning is to help those you leave behind; leaving a legacy of confusion and chaos obviously does not benefit your heirs.

 

 

Please contact me for answers to your questions!