KEY COMPONENTS OF AN ESTATE PLAN

            Whether you are young or elderly, rich or middle class, married or single, you likely own something of value.  It may only be valuable to you or it may also be valuable to others.  It may be your home, a car or boat, a bank account, some stocks or bonds, a house full of furniture and knick knacks, a stereo or a collection of vinyl record albums.  Whatever you own, regardless of its value, will “go” or “pass” at your death to someone else and become their property; their home, their knick knacks, their record album collection.

            You can direct who you want to receive your property at your death by executing a last will and testament; the first key component of an estate plan.  You can also direct who you want to take care of your property while you are alive if you become unable to manage it by executing a durable power of attorney; the second key component of an estate plan.  And, finally, if you are unable to make your own decisions because of some type of disability, whether physical or mental, you can direct who you want to be in charge of your medical decisions by executing an advance medical directive; the third key component of an estate plan.

            Let’s assume you die and never execute a last will and testament.  Then, subject to some limited exceptions, your property will generally pass at your death according to the laws of the state where you die.  The persons who receive your property are referred to as your “heirs”.  Most states’ laws set forth a list of “heirs” who take in a certain order of priority; heirs of the same degree or familial relationship usually take equal shares of your property.  By executing a last will and testament, you choose who receives your property at your death and how much they receive.  Otherwise, state law controls who gets what you own and how much.

            Most married people want their spouse to receive all of their property at their death.  If you die without a will and have a spouse but also have one or more children, your spouse will not receive all your property; he or she will share your property with your children.  So, your spouse could end up owning your home with his or her children or with your children, that is, with your spouse’s stepchildren.  In either case, it may not be an ideal situation and may not be what you want.  Ownership of your home by your spouse together with your children (or your spouse’s stepchildren) often causes a whole host of problems, some of which can easily be fixed, some of which cannot.  You can eliminate this from happening by executing a good, valid last will.  Not a homemade will, not one you get off the Internet or at an office supply store.  A well-drafted, legally sound, properly executed will prepared by a seasoned estate planning lawyer.  The old adage, “you get what you pay for” has never been more appropriate than with your will.  A lawyer-drafted will is a must (and a topic for another day)!

            Having a good, well-drafted will also makes the probate process easier after your death.  It allows someone to step up and take charge of your affairs, the person you select and name in your will as your executor (now most often called your personal representative). That person can very quickly be appointed by the local probate court and once appointed, have the authority to handle all of your affairs.  With a well-drafted will, they will have more authority to act and do what is necessary than if you die without a will.  Your will gives them added powers that state law only gives them through petitioning the court for authority, a time and expense that slows down the process and often leads to disputes and disagreements.  In addition, without a will, state law controls who can be appointed by the court to handle and manage your affairs.  With a will, you select who will be in charge.  These are just a few of the important reasons to have this key component of a good estate plan, a last will and testament.

            The second key component of an estate plan, a durable power of attorney, is just as important as the first.  A power of attorney is a legal document whereby a person (referred to as the “principal”) appoints another person (referred to as their “agent” or “attorney-in-fact”) to do and perform certain things for the principal.  Without a valid power of attorney, if you become unable to handle your own affairs, it is very likely that no one will be able to handle all of the matters that need to be handled for you.  These may include paying your bills, dealing with your mortgage lender, pension provider or social security, handling your life insurance policy, annuity, saving account or tax returns.  All that personal business that we face day in and day out to keep our lives, our families and our homes moving forward for our benefit and our family’s benefit.  The easiest way to make sure that someone can step in and handle all these personal, business affairs is to execute a good, broad, durable power of attorney.  Without such a legal document, your family is faced with the only option likely available: petitioning the probate court for control over your affairs.  Another costly, time-consuming lawsuit that is easily avoidable through your execution of a good, broad, durable power of attorney.  Another job for a seasoned, estate planning attorney.

            And, last but not least, the final key component of an estate plan is a medical directive setting forth your wishes and desires for medical treatment.  A directive that sets forth who should step in and direct your medical care (another agent) if you are unable to direct what you want at the time a decision needs to be made.  And, also a directive that addresses end-of-life care should you have a terminal illness or be in a permanent state of unconsciousness.  You can execute a health care power of attorney and select an agent to make health care decisions for you and give them broad authority but also direction by you as to your desires and preferences.  You can state your desires and wishes and direct that your family and health care providers follow your wishes should you be unable to direct your care.  Most people know what they want and have strong feelings about what they don’t want.  Putting your wishes on paper in a proper legal document that has the force and control of law behind it helps insure that your wishes will be carried out. 

            Making sure that you have these key estate planning components in place should you die or become incapacitated is important for all of us, no matter the nature or extent of our property and possessions.  These key components provide you with the peace of mind that you have taken care of these important matters for your family and loved ones, that you have put in place your plan to protect your property and affairs for them.  You have made it easier for them and have let them know your wishes and desires.  It’s the least that we can do.  And sometimes, it’s the most that we need to do.

(The information provided in this article is for informational purposes only and is of a general nature. The information should not be construed as legal advice.  If you have any questions about the subject matter of this article or related matters, you should consult with a professional advisor for advice. Deirdre W. Edmonds is the former Horry County Probate Judge and is the owner of The Law Office of Deirdre W. Edmonds, PA, located at 1500 Highway 17 North, The Courtyard, Suite 213, Surfside Beach, SC  29575.  The Law Office of Deirdre W. Edmonds, PA focuses on estate planning, probate administration and litigation, disability planning and elder law.  Contact Deirdre W. Edmonds via Telephone: (843) 232-0654; Website: www.dedmondslaw.com; and Email: dedmonds@dedmondslaw.com.)