If you’ve got older parents or relatives, says Fox 5 NY in its article “Why estate planning is important regardless of your age or wealth,” you’ll need to start having conversations with them about their estate plan. Don’t neglect your own, because whether you’re rich or poor, everyone needs an estate plan.
How can you have a successful conversation, without making your family members feel uncomfortable? The key to a successful discussion depends upon the right approach.
Try to always make suggestions, rather than demands. One great way to start the conversation with family members, is to mention what you're doing. You might say something like, “I just took care of my own estate planning. Have you done anything? Maybe we should talk about it.” That might get the conversation rolling.
Many people believe that, as they get older, they need a will. However, that’s just one piece of the puzzle: core estate planning includes a will, power of attorney, health care power of attorney, and asset protection.
For most of us, the asset we most want to protect is our home. Many individuals choose to re-title their primary residence into their revocable trust, which would allow an incapacity trustee to sell the primary residence if the individual needed to be admitted to a nursing home for incapacity purposes. Owning your home through your trust also avoids probate in the event of your passing, so that the house itself or the equity therein can pass to your beneficiary in a much more private and efficient manner.
You also need to find people you trust to help with finances and health care. A power of attorney is a legal document in which you grant a person the authority to handle finances on your behalf. Similarly, a healthcare power of attorney is an individual who makes healthcare decisions, if you get sick or are in an accident and can't make decisions for yourself. You can use one person to do both or separate individuals for each role. You can opt for a family member or a trusted friend. However, either way it should probably be a younger person, who won't be dealing with the same aging issues as you.
Some people think that a will is the only thing they need as it is usually more inexpensive than a trust, but what they don't realize is that a will can be more expensive in the long-run if their estate has to go through probate. Probate is triggered when their are assets titled in the name of a deceased person, and costly filings must be made with the court in order to allow for the proper oversight of the probate process. In addition to the time and expenses of a probate, probate is a public record and does not keep family affairs as private as some people would prefer. A revocable trust created during your life time can help you avoid probate, avoids the public administration of your estate, is usually less expensive in the long-run, and can provide asset protection for the assets that you leave to your beneficiaries. Though not a one-size-fits-all for every client, a trust provides many benefits that usually can't be obtained through just a will plan.
An estate planning attorney will be able to sort through all of your questions and concerns. At the Soto Law Firm we offer free consultations to help clients understand more about the differences between wills and trusts, and we focus on education throughout our process so that our clients are well informed about their options and the plan they choose. Contact us today to get the process started.
Reference: Fox 5 NY (December 12, 2018) “Why estate planning is important regardless of your age or wealth”