Due to the coronavirus pandemic, we are getting a lot of client calls about estate planning. What is it? Do I need it? If I already have an estate plan, do I need to change it now?
The concerns are understandable, and the questions are fair.
In times of uncertainty, we all want to control what’s within our power to control. Estate planning is one of those tools, within your control, that you can use to plan for your future and the future of your loved ones. It can provide real value and peace of mind, especially during these historic and challenging times.
Here, we’ll cover a few estate planning basics.
What is Estate Planning?
Estate planning means that you’re putting together a legal plan to ensure that your assets and finances are passed on to your loved ones in the way that you want, not the way someone else thinks it should be.
That’s the goal; to have your wishes carried out at the end of your life.
Estate planning can also help you save more money, pay fewer taxes, and pass on important family heirlooms or finances while you’re still alive.
Common Estate Planning Tools
Although every estate plan is different, depending on the circumstances and needs, there are a few estate planning tools that are widely and commonly used.
Wills and Trusts
The two most common estate planning tools, wills and trusts are often confused as being one-in-the-same. But they are, in fact, two vastly different documents.
A will is a document that clearly defines how you want your assets and belongings (your ‘estate’) to be distributed upon your death. Wills are typically processed through your local Probate Court where a representative will ensure that your will is carried out properly.
A trust, on the other hand, is a document that can take effect before your passing. Instead of going through Probate Court, trusts are usually managed by a Successor Trustee, who is literally trusted to honor the Trust and carry out its directives.
Durable Power of Attorney
This is a tool that we recommend to just about anyone, no matter who you are, how big or small your estate may be, or what the current circumstances are.
A Durable POA gives someone, of your choosing, the authority to act as your agent (or representative) in the case that you could not act on your own. For example, if you’re in a car accident, and you are not conscious, someone needs to be able to pay your bills while you are hospitalized, communicate with the insurance company on your behalf, or make decisions about your business or bank accounts while you are unable.
Medical Power of Attorney
A Medical POA is similar, but it specifically gives an agent the authority to make medical decisions for you if you are unable. In Colorado and Wyoming, we are lucky enough to have access to tools within the Medical POA that allow us to make medical decisions in advance about issues like life support, resuscitation, and feeding tubes. This means that you can leave your assigned agent specific medical instructions in the POA, as well as the authority to make medical decisions for you during situations that were not planned for.
A Living Will is an end-of-life tool that is also used to help ensure that your medical wishes are carried out. Unlike a Medical POA, a Living Will does not have an assigned agent. That means that your Living Will must be very specific and detailed because there is no agent to fill in the gaps for you.
Living Wills are often thought of as Plan A, and the Medical POA as Plan B. If the Living Will does not cover a medical situation, then the Medical POA and your agent may provide more flexibility and choices.
How to Get Estate Planning Help
Whether you are concerned about the Coronavirus or not, estate planning is an important tool. In times of uncertainty, though, it’s especially important to make sure that your estate plan is up to date.
At McDonough Law, our goal is to ensure that your wishes are carried out, and that your family and loved ones are taken care of. If you have questions about your estate plan, or want to get one started, please give us a call today. We’re standing by to help.