Your Most Important Love Letter

by | Feb 1, 2012

(… and BTW, don’t leave a mess)

For February, the month of Love and Valentine’s Day, I thought it would be perfect to devote our attention to estate plans, those plans that come to life during and after one’s last life transition. The typical “basic” estate documents and a brief definition are outlined below. Depending upon your situation, including the state in which you reside, you may or may not need all of them. I highly recommend that you make a conscious decision about each.

Durable Power of Attorney for finances – lets you name a person to handle your finances in times when you are unable to handle them yourself.

Durable Power of Attorney for health care, or health care proxy – lets you name the person you want making your health care decisions if you are unable to make them yourself.

Living Will – spells out your wishes regarding end-of-life care and removes the burden of making these decisions from your relatives.

Last Will and Testament – lets you provide direction about how your assets are to be distributed and who is to be the guardian for minor children.

Revocable Living Trust – enables the assets you put in the trust to be distributed to your heirs without going through probate. Also enables you to name a successor trustee who can step in to manage the trust assets during your lifetime, if you become incapacitated.

Estate documents are the last formal communication from one family member or friend to another. The motivation for drafting and executing estate documents is primarily money – preservation of wealth, ensuring funds for specific goals (college), survivor income, avoiding probate, charitable giving and more. I would like to suggest including another motivation: your heart. Consider the opportunity to pass along a beautiful gesture of love infused in your well-planned estate documents. You can accomplish this intention several ways.

First, simply include the presence of the heart when you draft and execute your documents. Second, depending on your state of residence and whether “non-legalese” is allowed in the legal document, include a statement or two in the document that expresses your heart’s desire. Third, consider writing a non-binding letter to your heirs that casually communicates what your formal legal documents could not. These are sometimes called Ethical Wills.  There are many processes to support your clarity and creation; in February’s MoneyMoves™ News under Be Inspired I offer a favorable process and resource developed by Susan Turnbull. Lastly, I recommend that you communicate with your heirs, prior to your demise, all of the details, appointments and intentions that are written in your estate plan. This action can be a challenge and some professionals hesitate to encourage that interaction. However, if you desire for your family to easily move through the estate transition process, transparency and open communication support that desire better than any other.

Consider the following documents. Ask yourself these questions:

  • Do I have a current executed _____________ (name of document)?

We recommend that when life circumstances change and/or the estate laws change, you consider updating your last will and testament and revocable trusts. Durable powers need to be “refreshed” every three years so that financial institutions will accept them as current.

  • Do I need a _________________ (name of document)?

Depending upon your situation, you may or may not require all of these documents. Everyone has a last will and testament; the question is whether it is written by you, or by your state of residence. If you have not declared your last will, the state statutes dictate how your estate affairs will be handled. This distribution may or may not be what you desire. Some states dictate which document is binding for health matters. For example, in Massachusetts, a health care proxy is preferred over a living will.

  • If I do need this document and my version is old, what is the ultimate result I want to achieve?  Then, what is the process to achieve that result and what is the next step to move this goal forward?

Once you are clear about the documents you need, create a process to follow, with specific action steps to complete. State-specific online resources may be helpful for getting a basic idea of what to include in each document, but if you have any questions I recommend a review by an attorney to ensure they are current. If your situation is complex, you may need to hire an attorney for the entire process.

After your written estate plan is executed, consider if there are any other “end of life” matters that call for your attention. These include your health documents, your long term care insurance, possessions that are more burden than pleasure, communication in relationships and so on. While these are not the subject of this article, they remain important in holding the motivation to not leave a mess! In fact, bring to mind the intent of your last act of love without any messes – what does that look like?

 

Please note: the above article is for information only and should not be construed as legal advice.