If you become incapacitated or pass away without an estate plan, then your home state will reach its default rules to make decisions for you. Unfortunately, those default rules may be entirely the opposite of your wishes. Moreover, those default rules may result in a lot of family conflict and money wasted on attorney fees. Did you want everything to go to your spouse? Did you want your spendthrift relative to have control of your finances? What about health care decisions? Would you want your family agonizing for years over the decisions they made about your healthcare?
The state is not psychic, nor are your family, and nobody can guarantee they will know what you thought was best. The best way to ensure your estate is not wasted on fighting attorneys and that your wishes are followed is to spell them out with estate planning.
Let me give you a few examples based on all too common fact patterns:
- Junior’s father, John Senior, passed away unexpectedly. John Senior had been helping Junior through college and provided the down payment for Junior’s first home. John Senior did not have any estate plans in place at his passing. John Senior did not have a Will, nor did he have a Financial Power of Attorney. Junior’s two siblings, Greed and Envy, feel cheated over the assistance he got from dad. Greed and Envy fight to get control over dad’s estate in court then allege that the money Junior received was an “advance” on his inheritance and as a result, he should get less. Tens of thousands of dollars in attorneys later and untold damage to their relationship, the kids settle because the cost in attorney fees is overwhelming. If John Senior had completed his estate planning, it would have resolved these disputes before they happened, saved money, and saved family harmony.
- Alex and Betty are middle-aged siblings. One day they get a phone call that their father was in a terrible motor vehicle accident. The father sustained terrible injuries, and it was uncertain if he would ever regain consciousness. Dad is on life-support and does not have a living will or a health care power of attorney. Alex and Betty venomously disagree on what dad would have wanted. Alex recalls his father saying he lived a long and wonderful life and he would never want to remain attached to machines for basic survival. Betty argues that dad was a fighter and has many more years left to live if he recovers. Alex and Betty go to court to fight over dad’s health care decisions. While the court fight is ongoing, a miracle happens; Dad regains consciousness. Betty is present for this, and she explains what happened to him and how glad she is that he woke up, proving Alex wrong. Dad tells Betty she got it wrong, he did not want to rely on a machine to breathe for him. Betty is crushed and feels that she has damaged her relationship with her dad and her brother. Dad has an attorney visit him in the hospital and finally signs off on his health care directives. Shortly afterwards Dad passes, but the damage to the siblings' relationship will linger for years afterwards. Betty’s final memories with her father will be indelibly marked with the feeling she did not know her father as well as she thought. These long-term effects on the family could have easily been avoided with proper estate planning.
What we are trying to convey to our readers is that Estate Planning isn’t just about you. Yes, it’s about your wishes and preferences, but it goes beyond that; Estate planning is for your family. It’s for your legacy. Protect your legacy and loved ones by planning for your passing and preparing a better future for those you care about most.