Financial planning is an integral part of family life, whether budgeting to pay monthly bills, planning for severe illness or other crisis, or working toward a goal (purchasing a home, educating children or retirement). A comprehensive estate plan is an important part of the overall financial plan for any family and should include a Will, a Trust (if appropriate), a financial Power of Attorney, a Health Care Power of Attorney and a Living Will.
When I speak to groups, I often ask how many in the audience have a will; usually few have. If you have not created a will of your own, then the intestacy laws of the state in which you live impose a will on you and dictate who will inherit your assets. The results can come as quite a surprise. Consider the recent widow who assumes that she will inherit all of her wife’s assets, but ends up co-owning her home with her in-laws; or the widower who finds out days before closing that he must deal with his late husband’s ex-wife and go to court for permission to sell the home that he now co-owns with his minor step-children. It is easy to avoid these issues by preparing a will.
In addition to directing who inherits your assets, a properly-drafted will can: (1) name an executor, the person who will wrap up your affairs after your death; (2) nominate a guardian for your minor children in case no legally-recognized parent survives; (3) waive bond, avoiding a possibly unnecessary estate administration expense; and even (4) include trust provisions for a child or disabled beneficiary.
An estate plan includes other integral documents to protect you and your loved ones both during your lifetime and after your death. A financial power of attorney lets you name another person to pay your bills and handle your financial affairs, for example, in case you become disabled. A health care power of attorney lets you name another person to make your healthcare decisions if you become unable to do so. A living will lets you specify what type of care you do or don’t want at the end of your life.
You probably also need a trust if: (1) you or your spouse/partner has children from a previous relationship; or if you want to provide for a loved one who (2) is a minor; (3) is disabled; (4) has a history of substance abuse or other compulsive behaviors; or (5) lacks the ability to handle money effectively. Clients with significant assets might use a trust for tax reasons or to preserve family wealth for multiple generations.
Other documents that might be important for your estate plan include pre- and post-nuptial agreements, deeds and documents related to succession planning for a business.
An estate plan is crucial for couples who choose not to marry, for blended families, for parents of minor children and for non-traditional families (triads, polyamorous families). Even with marriage equality, an estate plan is still an important tool to ensure the integrity of a relationship during crisis and to protect your loved ones. It can lend legitimacy to a relationship in the eyes of homophobic parents and others who might discount or choose to ignore the relationship. An estate plan is also important for a married couple who has any degree of open relationship.
Individuals not related to each other by blood, marriage or adoption lack any sort of legal protection in many states. The laws of some states severely punish married partners who are non-monogamous via claims for alienation of affection or criminal conversation and by barring claims for alimony. A comprehensive estate plan can address these issues.
A properly-qualified estate planning attorney will take time to learn about you, your family, and your goals to create a comprehensive and coherent estate plan specifically suited to your needs. Good questions to ask an attorney with whom you want to work include: (1) how long have you been practicing estate planning; (2) what portion of your practice does estate planning comprise; (3) what’s the nature of your experience with estate planning for members of the LGBTQIA communities and non-traditional families; (4) do you charge an hourly rate or a flat fee; and (5) what are those fees and how will you bill me?
As an attorney whose practice focuses on estate planning, I frequently meet with families in crisis whose options are limited by a lack of planning. Don’t wait for a crisis; make a plan now!
info: Justin R. Ervin, III is an attorney in practice at Johnson, Peddrick & McDonald PLLC in Greensboro, N.C.
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