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Estate Plans are Scary

The hesitancy to plan for death, out of fear, procrastination, or due to perceived misconceptions about the cost, are common excuses for not having an estate plan. However, it’s important to remember that your estate plan should be thought of as living documents, meaning you can change them at any time while you are still alive and have capacity.  In fact, your estate plan should reflect your life circumstances and should be changed as life goes on, such as in the event of a birth, adoption, death, marriage, divorce, incapacity, or due to a change in your family or financial circumstances.  Some of the reasons for having a properly drafted estate plan are described below.

Everyone in my family knows what I want so I don’t need one.

Many people feel that creating an estate plan is an unnecessary expense.  Contrary to common belief, all non-trust estates must go through the probate process, with or without a Will. (Probate is the court-supervised transfer of property from a deceased person (decedent) to his or her heirs and beneficiaries).  Having a legally binding Trust or Will in place answers the questions of “who, what, where, and when” and speeds up the entire estate administration process, and answers questions about what happens upon the incapacity of you, or your spouse. Your estate administration will be faster, more cost effective, and provide a greater to your beneficiaries, if you have an estate plan in place.

Maintaining Control over the Distribution of your Estate.

In Oregon, when a person dies without a Trust or Will, the laws of intestacy of the State of Oregon will determine who will receive the assets of the estate and when those assets will be distributed to him or her. The default laws of the state of Oregon may be drastically different from your intent or preferences.  Regardless of the size of your estate, you must have a Will or Trust to pass property to your spouse, children, relatives, friends, or charities in proportions different from the default law.

Decide on who will be in charge of carrying out your wishes.

Another important function of an estate plan that includes a Trust and Will is the appointment of the individuals who will serve on your behalf, as personal representatives, trustees, and guardians or conservators for you  upon incapacity. The people serving in these various roles are known as fiduciaries.  To ensure the selection of an acceptable fiduciary, you must execute a Trust or Will that nominates the person or people who will serve as your fiduciaries.  If you have not executed a Will or Trust, the probate court will appoint an individual to act as fiduciary, based on the preference dictated by the default law.  It is important to note that the court-appointed fiduciary could be anyone, including a creditor of your estate.

Nominate A Guardian For Minor or Disabled Children.

A Trust and Will may be used to nominate a guardian for your minor children. when minor children are involved.  Absent a Trust or Will, the court will choose among family, or name a state-appointed guardian.  This also applies to individuals who are dependent upon the person making the will (for example, Grandma with dementia).  The court will abide by the people you name in your Trust or Will so  long as the person/persons you named have the capacity to take care of you, upon incapacity, or care for your minor children.

Failure to plan can have all kinds of unintended consequences. Waiting until there’s an emergency situation to prepare documents may cause planning to be rushed, poorly thought out, or impossible to complete.

Estate planning is about more than Transferring Wealth.

A good estate plan does more than transfer wealth. It includes planning for illness and incapacity as well. Younger family members are often named as decision makers in their parents’ documents, whether that be as a personal representative, successor trustee, attorney-in-fact, or healthcare representative. Having an open conversation about end of life healthcare planning, funeral wishes, planning for long term care costs, or simply deciding who gets the family silver can take a lot of pressure off of your family in the future.

A discussion about estate planning today may avoid conflict down the road.

Families aren’t always at their best in the wake of a loved one’s passing. Old wounds, perceived favoritism, and good faith misunderstandings can all create issues when families need to be working together the most. In addition, you may have specific ideas about passing your wealth to children, grandchildren, or charitable entities, and those thoughts or ideas may surprise the younger generation. An open and honest discussion now about your wishes can avoid future conflict and ensure your family knows exactly what your wishes are.

Plan to follow through on your discussions. 

Finally, even if you have an estate plan in place, it is important to review existing wills, trusts, powers of attorney, and healthcare documents to ensure that they are accurate, up to date, and properly reflective of your current wishes. You should make sure the contact information in your healthcare documents are up to date, and if a document is more than a few years old, you should consider whether the nominated fiduciaries are still trusted and able to act. Consider changes that have taken place since you last executed your documents. An estate plan that is executed while your children are young will need to be updated as they age.

If you or a loved one don’t have estate planning documents, plan to meet with an attorney to discuss what documents are appropriate. 

Estate plans are not one-size-fits-all. Depending on age, wealth and family dynamics, it may be more appropriate to have a Will or a Trust. If planning for family members with special needs is a concern, documents may need to create a special needs trust to avoid an inheritance causing a disruption in services.