Written by Robert T. Nickerson
Estate planning doesn't just affect the people you want to address like your family; it can affect the family for generations in the long run. A good example of this is from the founding father and first president, George Washington. According to his will and last testament of 1799, George Washington granted "use, profit, and benefit" of his property to his "dearly beloved wife Martha Washington." He also set up to finance the creation of an orphan school, forgive many debts from family members, had set aside accounts for the creation of the Washington & Lee University and had arrangements made for those close to him to be cared for.
It was the goal of Washington to use what he's built to provide for the people he cared for, deal with any business debts, and be charitable to the needy. Even after 200 years, Washington's estate plan holds up and can apply for the modern era in the way families should consider with their own plans.
Washington was open about the displeasure of creating such a document, one that reads at over 5,500 words… which is about nine pages, single spaced. But it's still impressive to at least see how close modern estate plans cone to it.
Admittedly, creating an estate plan is no Disneyland vacation; it can be expensive and time consuming. We can still take a history lesson from Washington, as he wrote it. This gives us a glimpse into his thoughts and where he wanted his legacy to go when he was gone.
Every estate plan should cater to yourself and the people you care about. A good estate plan should be reflective about your own legacy and what it's going to mean to everyone else. This could mean setting something up for someone with special needs or even setting aside assets to go to your heirs.
In order to ensure a lasting legacy and ease of mind, a good estate plan should consider three focal points in order to have something as effective as Washington had planned; Communication, clarity, and customization.
The first involving communication is meant for your family. Don't get me wrong; a proper estate plan will have a lot of language that will come off as technical and is meant to follow the rule of the law and court, ensuring that on paper, things are going without trouble. But who is the estate plan for? Your lawyers or your family? If you answered family, your correct!
Before walking into an office to declare you want an estate plan, its important for both spouses to have the right information about their families. Both people need to be involved in drafting the documents and being in contact with those that their responsible for. By talking to get all sides of the story, a family can understand what needs to be addressed and put within an estate plan before it's too late.
Where does the role of clarity come in? For the second recommendation, I refer to the words "will" and "last testament". For some people, this is all their going to need to fufil their legacy needs. But what about families where things are not as clear? Are they going to need more? Probably. Clarity refers to the idea of having all areas that need addressing down on paper. This is when I would refer to other documents like "personal statement of intent" or "letter of wishes". While a will is a registered document under specific probate laws, a personal statement of intent can be accessible to the people set up under it.
Something like a personal statement of intent can do a lot of things. For example, if your dividing your assets unequally, this can be a chance to clarify your not favoring one heir or the other, but rather have a good reason for doing so. This could prevent a family battle in court in probate. Another example could deal with vacation homes. A statement of intent could say that you want your family to continue using it for generations rather then selling it.
Clarity is important for families with nontraditional structures or are involved in situations that could appear unfair.
The last, which applies for everyone is customization. No estate plan is the same as each family is going to have several factors play a part; Your assets, your property, your family, any disabilities, and even the nature of your death. All of these things are yours and an estate plan will revolve around most of it. It's important to work with a lawyer or advisor who is experienced with such matters.
Let's say you have someone in the family who has special needs. Their going to worry about whose going to care for that person once the parents are gone. If someone doesn't want the responsibility, then a fiduciary is usually hired to ensure the guardianship and their financial position. An estate plan needs to verify this kind of setup with a customization that a lawyer can take care of.
George Washington was a founding father who was wise in a lot of things. His estate plan was one of them, and is something people in 2019 can take a lot of lessons from.
Written by Robert Nickerson
Estate Planning becomes a greater challenge when a loved one like a spouse or an offspring has a chronic illness like Parkinson's, senile dementia or multiple sclerosis.
Chronic Illness is Not a Rare Situation
If we were to look at the numbers, there are over a 120 million Americans that suffer with a chronic illness. It's bound to go up even higher by 2030. In fact, over twenty-five percent of those over sixty five have had their lives changed by a chronic illness. As with new generations and increasing age, it's likely the number will continue to climb. Since this is essential to estate plans, it's not only important to have something in place, but something prepared that will handle potential chronic illness; something that that covers a large umbrella.
Estate Plans for Those Already Living with Chronic Illness
Though those with chronic illness will need similar documents in an estate plan that regular people use, the difference here is that they need to be modified to serve your needs. This is why it's important to get them done as soon as you get a prognosis. Putting off too long could result in the illness impairing your ability to understand or even sign the right papers. This is understandably a hard and difficult decision, perhaps as much as the medical diagnosis. This is an important note to think about when searching for an advisor that can empathize with what your going though and can help.
Here are some documents that should be able to help you out when getting an estate plan together.
HIPAA stands for Health Insurance Portability and Accountability Act of 1996. This law prevents an unauthorized person from altering with your personal healthcare plans and protects your confidentiality of your healthcare information and insurance. The purpose of a HIPAA Release is that it assigns someone your know (family member or friend) to have access to your private health information. This is important for whoever your going to trust when communicating with doctors and insurance companies. Let's say you've become too sick to make any decisions and cannot take your medicine. The person on the HIPAA Release will then take that responsibility as instructed.
When making this decision, it needs to be in writing and that whoever is being assigned is doing so on a voluntary basis. It also needs to show how much medical information is available. Sometimes its everything and sometimes it's only what needs to be known. It should say where and what needs to be provided in order to care for an illness. It could be medical care professionals or the names of hospitals. It's doesn’t need to be specific, as it could just refer to a category.
Does it make sense to have an expiration date for a HIPAA Release? Not if you have a progressive illness. What does make sense is having the right to revoke any access to prevent abuse. This could be an explanation for them to be replaced if needed. This is why this is only necessary if your electing someone that isn't as close. This is why you should probably look to a close family member or friend.
Watch out for the standard form. Some law practices will simply hand you’re a "standard form" that looks like any typical document. You might be told it'll cover the loved one, even though there's no one better who understands their problem then you. Only look for a lawyer who will cater to ones specific needs and can get it all in writing.
Living Wills and Chronic Illness
A living will exemplifies one's health care requests. It's common for end of life wishes, but it can cover a lot of things. It's something that can be altered based on other medical requirements or religious beliefs that could affect them. It's language can be rewritten to suit about anything. But don't assume that just because you have one ailing illness doesn't mean you won't have another. Be sure to include similar instructions, but vague enough that more information can be put in later. But for the original illness, clarify what disease you have, what stage it's in and what course it's set to go in. Don't forget to add what and how it needs to be treated. Are you open to experimental treatments? Then you may want to add your more then willing to go through experimental treatments. But also add whether the one responsible for financial power of attorney is paying for this or if it's being covered with something else.
Health Care Proxy and Chronic Illness
What a health care proxy does is legally assigns a person to your medical power of attorney. This is called your "agent" who will make your medical decisions when your no longer in a position to do so. Be sure to discuss with them what you want even before you get it on paper. This also includes guardianship should you have children. Do you want them as guardians or someone else? That’s another matter that goes into ones estate plan.
Physician Order for Life-Sustaining Treatment
This is a specific document that's given to your doctor once completed by whoever is your agent in your health care power of attorney. This purpose is normally for end of life decisions, so this is not meant for broader medical information. This is also important for those that have no family to name.
Revocable Trust and Chronic Illness
This is one of the most common documents used in an estate plan. This is to prevent major trouble in probate court later on. This helps avoid those high costs and drawn out court proceedings. For someone with a chronic illness, this will help a lot when figuring out the successor and their management of finances. For example, if you want someone who will keep watch over the accounts, you can have them complete a review each year. You can even have an independent CPA to serve as a monitor, to at least have more protection and a safeguard.
Jeffrey C. Nickerson - Estate Planning Attorney - My Passion is Special Needs Planning!