Resolve Now to Get Your Will and Other Key Documents Updated Now For 2016
December 15, 2015
NORTH CONWAY, NH – How much money you have does not matter. Everyone needs an estate plan, for two reasons.
First, you need to choose who is going to take care of you and your assets during any time in which you cannot care for yourself. Look around – how many people do you know in their 80s, 90s, even 100s ? That could be you. Plan for it.
Second, you need to organize your assets so that the people who inherit your property won’t be overwhelmed by the details. No matter the means, most people treasure their belongings to some extent and don’t necessarily think of their material culture as “stuff” or a mess. It will be easier for you to organize your things than it will be for them. Just do it.
Start by making lists. Who are the people you can count on to be helpful? Look in your own generation, and in the next younger generation. Come up with at least two names. These two names are one of the most important parts of the estate plan. Complete the plan to give these people the legal power they need to carry out the plan.
List your key advisors – doctors, dentist, accountant, financial planner, lawyer. Also make the kind of list you might make when you go on vacation: plumber, electrician, pet sitter, whoever knows the details of your life. Include contact information.
Then list your assets, carefully noting whether each is owned by you individually, jointly with another person, and whether or not there is a beneficiary designation in place. Call insurance, annuity, and brokerage firms and find out who they think is your primary beneficiary, and your contingent beneficiary. You may be surprised by the answers.
List which assets you would expect to sell first if you needed cash for a medical expense, or to hire a caregiver in your home. Think about a time when you can’t physically or financially stay where you are now – where would you want to go?
With those lists, go see a lawyer. You could get the key document forms online – even lawyers start with forms. A seamstress starts with a form, or pattern, too. But like a seamstress, the lawyer’s skill involves getting the right information about you to know which form is best for you, and to then customize that form for your situation.
Every estate plan should include powers of attorney for financial matters and for health care. These give your agents (those two people you are going to choose), the power to manage your life for you if you can’t do it.
A power of attorney for finances can be very narrow – only allowing your agent to perform a limited number of tasks, and only if your doctor finds you incompetent. Typically, powers of attorney are much more broadly drafted, because we don’t know what problems your agent will face on your behalf, and we want that agent to have all the power that is needed.
Of course, this gives your agent the ability to do things you might not want done. So choose your agents carefully.
In New Hampshire, a power of attorney for health care is called an Advance Directive. Many people call it a health care proxy. You can get a good form – free – at Memorial Hospital in North Conway (www.memorialhospitalnh.org). Most lawyers include this form in the flat fee for an estate planning package.
No matter where you get the Advance Directive, the most important decision is who to name as the primary, and then alternate agent. The basic form comes with instructions, and if you have just spent months at the hospital helping a relative or friend through the process of dying, you may be able to complete this form on your own.
If you don’t have that recent knowledge of the dying process, take advantage of one of the free local seminars on completing this form. Or plan to talk it through with your lawyer.
Another key part of your estate plan is a Will. After you die, the Will is taken to the probate court and the court supervises the person you have named as an executor in the process of collecting assets, paying bills, and distributing what is left.
All of our NH state courts are underfunded, understaffed, and unable to move your file as quickly as you would want it moved. Right now, in Carroll County, NH, we only have a judge on Mondays – and not even every Monday. The court personnel are wonderfully helpful, but there aren’t enough of them.
Minimizing the amount of assets that need to flow through that process is therefore a really good idea. That means planning ahead.
Trusts are a more sophisticated way to manage some or all of your assets. Again, you need to carefully choose the list of people who could serve as the trustee, and you need to think carefully about how the trustee will manage your assets, and for whom.
Many people think that trusts are only for the rich – and trusts are certainly very helpful to people who have real estate in more than one state, complicated assets, or just plain lots of assets.
But a trust can minimize probate, and also, if you have a beneficiary with special needs, or substance abuse issues, or spending issues, a trust may be a necessary part of your estate plan. These trusts save the beneficiaries money in the long run.
Set aside time to make your lists, locate your important documents, and think about how your own disability and death might play out. What a great task for the long winter nights ahead.
Deborah Fauver is an attorney at Cooper Cargill Chant PA. She focuses her practice on estate planning, probate and trust administration, and related real estate transactions. For more information, go to www.coopercargillchant.com or call 603-356-5439.