Planning to Die: A 5-part guide to understanding the values of wills / Part 3 The Legal/Financial Perspective

 In Advice, End-of-Life Planning

Guest Blog: Katie Ortman, blogger

My lawyer/friend Julia recommends that people think about estate planning holistically and consider ensuring that they have a Will, Living Will, and Powers of Attorney. Most of her clients end up including all of them when going through the process, but if someone simply wants one of the documents I outlined in Part I, she will happily work with them, too. She also thinks it’s important for everyone, regardless of age, assets and health status to do a Will.

She often meets with couples with young kids who are going to leave them for the first time with relatives. That’s one of the life stages when the hypothetical “if something were to happen to both of us” conversation happens.

Her clients’ intent in creating a Will is to feel like their family is taken care of and their wishes are going to be observed. Where she sees conflict is when a Will is not in place and families dispute over “what the person would have wanted.” The process of estate planning gives the client an opportunity to clearly state what he or she wants. She also sees a lot of people wanting to donate items or a certain amount of money to charitable causes. A Will gives you a chance to do that.

Julia observed that when a Will is in place and someone dies, everything tends to go a lot more smoothly. She had a client whose sister was the Personal Representative in her Will. When her client passed, the sister was left to sort her affairs from another state. It would have been extremely difficult for her sister to accomplish everything without a Will in place.

“People want to be sure they are leaving a legacy. The biggest piece of mind is that they are not creating a mess for their family,” she explained.

For Julia, the process takes a month to two, on average (Nick and I are the outliers!), typically over three meetings, although it can go a lot faster if clients prefer that. The first meeting, she walks her clients through a questionnaire. Then she fills out all the documents and sends back for review within a week or two. A follow up phone call takes place to review the documents, then the person or couple comes in for signing.

Julia mentioned, “In my experience, it isn’t atypical in a couple to have one person who is ready to sign and the other person to be having an existential experience.” She understands this and works through this with her clients.

Julia stressed that you can always go back and change things. “What you want to have happen with your money for your kids when they are 2-years-old is a lot different than what you’d want done when they are 40,” she gave as an example.

Speaking of your money, if you do not establish a Trust (or a Testamentary Trust in your Will), you do not get to choose who will manage your money for your children. Whatever money is inherited by your children gets paid to them automatically on their 18th birthday (or 19th birthday depending on the emancipation age in your state). A Will allows you to decide who manages your kids’ money even if they have another parent to raise them. Without a Trust (or a Testamentary Trust in your Will), your spouse will raise the kids and manage their money. When that becomes tricky is when said spouse is an ex-spouse. A Testamentary Trust is a set of trust provisions included in your Will, but a Trust is only established if certain criteria are met (ie both parents die and the child hasn’t reached the age of 25 or hasn’t graduated from college or a trade school).

To reiterate, from the legal, financial and medical perspective, if you are not clear with your loved ones on your wishes, you are only setting them up for confusion, guilt and heartache on top of the devastating loss they will experience with your passing.

On Tuesday, I’ll explore beneficiaries and belongings, two things often over-looked in the process.

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