When people think of estate planning, they tend to think of middle-age or older people, who are more settled in life, and most likely have some assets to preserve, and children to care for. Although that may be the “typical” estate planning client, once a person attains the age of majority (i.e. age 18), he/she is really not too young to draft an estate plan.
To have an estate plan, you don’t have to be rich and have a lot of assets. You also do not have to be further on in life, nor do you need to have children that you need to plan for in the event of an untimely death.
An estate plan typically consists of multiple documents that plan for your incapacity (in the event of an accident or illness), in which case someone can make medical decisions for you, and someone can attend to your personal business affairs. An estate plan also typically contains documents for the distribution of your assets after you die.
As far as estate planning documents for incapacity, the three most common documents are a Durable Power of Attorney, Health Care Proxy, and Living Will.
The Durable Power of Attorney permits someone you trust to conduct your personal business affairs (such as banking, paying your every day bills, filing taxes, and so on), which you would otherwise handle yourself, but are unable to do so due to being incapacitated as a result of an illness, injury, or accident. If you do not have a Durable Power of Attorney appointing someone to conduct your personal business affairs, then in the event you are unable to conduct your own personal business affairs, someone will have to seek appointment as a conservator by the court to conduct these affairs on your behalf. A conservatorship requires a legal action to be commenced in the Probate and Family Court, which would be formal litigation. This is a time consuming and costly process, and in the case of personal business affairs, some things usually need to tended to right away. If there is no Durable Power of Attorney, then you must wait for the order appointing a conservator, which can take several weeks. Having a Durable Power of Attorney avoids this problem in advance.
Another common estate planning document for incapacity is a Health Care Proxy. In this document, you appoint someone you trust to make medical decisions for you when you are unable to make medical decisions for yourself. This can be a very helpful document for medical providers if there is a sudden accident requiring quick medical decisions.
The third common estate planning document is a Living Will. A Living Will states a person’s preferences for end of life care and treatment. Through a Living Will, a person can state whether or not he/she wants any extraordinary life sustaining measures, or if he/she wants only palliative care provided while the person is allowed to die with dignity. Under existing Massachusetts law, a Living Will is not a legally binding document. However, when there is a dispute as to your wishes for end of life care, the document can be considered as evidence of your wishes for this type of medical care.
Although no one ever wants to think about being sick, injured, or disabled, having these basic documents that plan for potential incapacity can avoid a lot of headaches if an injury or illness does occur, and then a court order would be required for providing medical decisions and care, or managing your personal business affairs. Anyone who is 18 years old, or older, can have these documents prepared as part of their estate plan.
Other estate planning documents include a Last Will & Testament and trusts. Wills are probably the best known and most common estate planning document. Through a Will a person can outline how they wish their assets to be distributed after they pass away. A Will nominates a Personal Representative (formally known as an Executor) to carry out the last wishes. A Will can also nominate a guardian for minor children. If someone dies without a will, they are considered to die “intestate”, which then requires the Probate and Family Court to administer the decedent’s estate in accordance with the laws of inheritance.
Trusts are more complex than Wills. Trusts are a means by which property can be owned or conveyed for beneficiaries, and simultaneously avoid the probate process. The trust property is managed by a trustee for the benefit of the named beneficiaries. There are advantages and disadvantages to trusts, and trusts are not always the best option for everyone. If you are considering a trust, you should consult an attorney knowledgeable in trusts and estate planning to see if a trust really is right for you.
Having these basic estate planning documents can avoid a lot of headaches for you and your loved ones down the road. You don’t need to be rich, or further on in life to establish an estate plan. Although no one wants to think about dying or getting sick, it is wise to have these documents prepared earlier on in life to be prepared just in case the worst possible scenario happens.
These documents can often be drafted for a reasonable fee, usually a flat fee, which can avoid much greater fees down the road in a guardianship, conservatorship, or administration action before the Probate and Family Court.
Also, once you have an estate plan in place, it is important to review it every few years to make sure it is still current with your life circumstances. If it is outdated, then you should go back to your attorney to have the documents updated.