Many estate plans fail, and often not because of any flaws in the documents or the plans.
The failures frequently occur because of the implementation and execution.
Often the critical actions are taken by others, usually one or more of your children.
They’re likely to be the ones putting key parts of the plan into action, not you.
The actions often need to be taken when time is of the essence, so it’s best if the actors aren’t struggling to obtain information at these times.
To ensure success, the key players need to know certain things, and they need to know them as soon as possible.
To maximize the probability of a successful estate plan, your children, or others you name to implement your plan, need to be able to answer these questions.
Your estate plan isn’t complete until you’ve done your best to help your children answer these questions.
What are the details of your durable power of attorney and advance medical directive?
An estate plan often kicks in before a person passes away.
We don’t like to talk about it, but we’re all likely to have at least a brief period when someone else needs to handle our affairs or make medical decisions.
These documents empower people to do just that.
They don’t do any good, however, if no one knows about them when they’re needed. Your children should know that you have both types of documents and where they are located. They also should know who is appointed to act on your behalf, who the successors are, and how to contact all of them.
Anyone who’s likely to be contacted early in an emergency should have a copy or at least know the details about who is the decision maker, where to find the documents and what they say.
What about a living trust? Assets owned by a living trust avoid probate. They won’t be subject to the terms of the will or public scrutiny. But the holder of your power of attorney might not be able to manage the trust assets, depending on how the trust agreement and power of attorney are written. A successor trustee takes over when you can’t.
Your children need to know if you have a living trust, where the trust agreement is, and who the current and successor trustees are. They also should know which assets are owned by the trust and which aren’t.
Where’s your will? Of course, you should have an updated will. Your children should know at least who the executor is, so he or she can be contacted.
They also should know who the successor executor is if the original isn’t available. The executor, and probably key members of your family, should know where the original copy is kept. Many states require the original to be filed with the probate court. If the original can’t be found, there can be delays in settling your estate.
There’s no reason to distribute copies of the will, as there’s rarely an urgent need for the document. But it’s a good idea to let the children know its general contents so major surprises are avoided.
Who are the financial and legal professionals you work with? Those with the most urgent need for this information are the agent under your power of attorney, your executor and the successor trustee of your living trust. In most estates, an adult child fills one or more of these roles.
The professionals include financial firms where you have accounts, life insurance agents or companies, your attorney and any accountant or tax preparer you use.
You might use other professionals. The professionals can ease the process of settling the estate, filing insurance claims, finding and managing all the assets and more.
Be sure the contact information is readily available to those who might need it.
Of course, most of the professionals should know the details of your estate plan and have copies of the power of attorney, living trust and any other key documents.
Who are your doctors and what are your prescriptions? This basic information should be known by or accessible to anyone who might be around or contacted if you should have a medical emergency. Even if the person isn’t empowered to make decisions under the advance medical directive, your care can be improved when this information is provided promptly to medical professionals. Make it readily available to your loved ones and keep it updated.
What is your Social Security number and other personal information?Identity theft is a major concern these days, so medical providers and others have established safeguards. It’s hard to help anyone without establishing their identity and yours. That’s why your loved ones need details such as a copy of your driver’s license, Social Security number, date of birth, place of birth, mother’s maiden name, previous addresses and sometimes more. Access to your Medicare card and any other insurance card also can be crucial. Even an agent under a power of attorney or advance medical directive often has to provide some of this information before being allowed to take action.
If you can’t stay in your home, where would you like to live? Another way to ask this question is, how badly do you want to stay in your current home? If the home becomes too much for you to take care of, would you prefer to move into an apartment or a place with more services, such as an independent living or assisted living residence? Or would you like to pay for home care aides? Do you expect to move in with one of your children?
It is a good idea to consider these options and explore the choices in your area well before you need to make a decision. Otherwise, if the time comes someone will make the decision for you and it will be made in a hurry.
What final arrangements do you prefer? The children often disagree about what their parents wanted. It is not unusual for a child to remember a casual comment a parent made years earlier about funerals, burial, or cremations and interpret that as a last wish. Two or more children might have contradictory memories about such comments. This question is something you should give some thought to and write down any preferences you have.
As you can tell, all of the children need the answers to some of these questions, while it might suffice to give the details of the other questions to only one or two children.
The children should know the answers to these questions before the need is apparent. You’re unlikely to be able to help with the answers when the information is needed. One good way to make all this information and more available is by completing my workbook, To My Heirs: A Book Of Final Wishes And Instructions. It is available at www.retirementwatch.com. Roll your cursor over the “About Bob” tab the top of the page and click on “Bob’s Library.”
