Updated: Aug 28
Creating an estate plan can be an emotional minefield for a couple. Confronting the prospect of each other's incapacity or death can be extremely uncomfortable. And, it can be difficult to formulate an estate plan when you need to be in absolute agreement with another person.
Thankfully, open conversation (and with some compromises here and there) can ensure that both parties understand and are aligned on the big issues. Here are some things you might want to discuss as a couple before making an appointment with an estate planning attorney.
What is an Estate Plan?
An estate plan consists of several written documents that, working together, provide for the management of your person and estate if you become incapacitated and the distribution of your estate upon your death. A basic, well-rounded estate plan includes the following four foundational documents:
• A Trust to specify how you would like your assets managed during life (if you become incapacitated) and distributed after death.
• A Pour-Over Will to ensure that any assets titled in your individual name when you die (i.e., not in the name of your Trust) will be “poured over” into your Trust, thus ensuring a unified plan to distribute your assets.
• An Advance Health Care Directive to appoint an agent to make health care decisions on your behalf if you become incapacitated and to provide guidance as to your medical treatment preferences.
• A Durable Power of Attorney to appoint an agent to make financial decisions on your behalf if you become incapacitated, but only as to assets not held in your Trust (such as 401Ks or IRAs).
Purpose of Estate Planning
Estate planning serves many purposes beyond just controlling who inherits your estate,. By documenting your wishes beforehand, you can:
• Control who receives your assets after death
• Ensure your family is provided for financially
• Specify a Guardian for minor children
• Avoid costly court proceedings to manage a minor child’s inheritance
• Provide for the care of pets
• Specify an Agent for medical treatment (and avoid a costly Conservatorship)
• Specify medical treatment preferences
• Avoid court oversight of your estate administration
• Choose a person you trust to administer your estate
• Streamline the passing of assets to beneficiaries or your spouse
• Keep your estate details out of the public record
• Reduce or eliminate estate taxes
• Keep legal fees low
• Reduce the stress of funeral planning
Some Issues to Consider
Your estate planning attorney is going to ask you questions about yourself, your family and your estate in order to be able to draft documents tailored to your particular situation. They are likely going to raise at least some of the following issues with you. Having a thoughtful discussion beforehand can ensure that you are both on the same page and feel prepared to discuss your preferences.
• Your Financial Legacy- Who would you like to receive your property? Is there anyone you would not want to receive your property? Do you want to leave anything to friends or more distant family members? Do you want to leave anything to a charity, university, church or other organization? If you intend for your children to inherit your estate, do you want them to inherit their share outright, in stages over time, or through a trust (if the latter, then when and under what conditions are your children to receive the income or ask for principal distributions)? Should you consider spendthrift or creditor protection strategies for your beneficiaries?
• Complicated Family Dynamics- Do your children generally get along with each other? Do you expect them to continue to do so after you are gone or are there unresolved rivalries that may surface to create issues? If there are children from a prior relationship, do they get along with your partner? Do your children or beneficiaries have certain expectations about their inheritance (especially if these expectations are unwarranted)?
• Care Of Your Minor Children- Who do you know that is capable of caring for your children emotionally and physically? Is this person dependable? Do they have enough energy to devote to this responsibility? Do their beliefs and values match your own? Does this person have a relationship with your children? Does this person have children already (if so, how would your children ideally fit into the mix)? Does this person live locally or are they willing to relocate? How much do you want to financially compensate this person for taking in your children?
• Who Should Manage Your Estate (If You Become Incapacitated Or After Your Death)- Who do you know that is honest and responsible with money and investments (or is responsible enough to hire someone to assist them with money and investments)? Does this person have the time to devote to managing your estate, paying bills and making distributions? Can this person separate their personal feelings and interests from their role as Trustee and act impartially? Does this person have any conflicts with other beneficiaries of the estate? If you are thinking of naming two or more persons to serve, have you thought about what happens if they can’t agree on a course of action?
• Who Should Manage Your Medical Care (If You Become Incapacitated)-Who do you know that will respect your right to get the medical care you want (even if they do not completely agree with your wishes)? Do you feel confident discussing your wishes with this person? Will this person be assertive in carrying out your wishes in the face of conflict from medical personnel or family members? Does this person have the time to devote to handling your day-to-day care? If this person isn’t local, are they able to travel to take you to doctor’s visits, to visit you in a hospital or other health care facility, or to supervise treatment?
• Your Medical Care (If You Become Incapacitated)- What are your opinions on surgeries, blood transfusion, organ donation, etc.? What are your thoughts on artificial life support, artificially administered food and water, and comfort care if you have a terminal condition, enter into a coma, or you are in a persistent vegetative state? Do you want to leave instructions for your funeral arrangements? Do you want to donate your organs or body to science?
Start The Conversation Today
With any major financial decisions, the sooner you start the conversation, the better.
The issues raised above are not an exhaustive list. Given the complexity and number of considerations of creating an estate plan, it's important to consult with a professional to evaluate your situation and to ensure you've weighed all of your options. To learn more, call us for an appointment.