We’ll talk about it another time. I don’t know where to begin. We’re not wealthy enough to need one. Those are just a few of the reasons why family members often put off conversations about estate planning. In fact, the prevalence of estate planning has trended in the wrong direction in recent years: While almost half of Americans said they had an estate planning document in 2017, in 2020, that number is down to less than one-third (Caring.com survey).
The good news: In these times of uncertainty more people are finding time for these important conversations. Everyone benefits from estate planning, regardless of your age, income or the size of your “estate” or nest egg. Ultimately, estate plans serve to protect you and your loved ones, ensuring that your wishes are carried out. And certain fundamental elements of estate planning apply to almost everyone.
Here are some essential elements of estate planning to include in your conversations with family members and your attorney:
A will provides a blueprint for asset distribution upon your death—and, for families with minor children—clear instructions for children’s guardianship in the event of tragedy. It both ensures your wishes will be honored, and avoids a complex and costly probate process, where decisions would be left to courts and Connecticut laws without regard to your wishes.
While a will may seem simple enough to complete using a DIY online service, there are considerations—such as evolving statues, witness and notary requirements, and other specifications that may not be addressed by those services. So use caution when it comes to creating a will without the help of an attorney, since an improperly executed will may be invalidated by the probate court—and the decedent will be considered to have died without one.
The Health Care Proxy and Power of Attorney
It’s also important to make your health and financial wishes clear in the event that you are no longer able to make decisions for yourself. That’s where a power of attorney and a health care proxy come in.
Naming a power of attorney appoints someone who will act on your behalf for financial matters while you’re still living—including paying your bills if you are hospitalized, or managing your finances if you are incapacitated. A springing power of attorney literally springs into action if certain events occur, while a durable power of attorney is in place right away, until you rescind it. Either way, appointing a power of attorney ensures your financial wishes are observed in the context of unforeseen events.
In addition to making sure your financial wishes are honored, a healthcare representative is a vital element of your estate plan. A living will and a healthcare proxy will give a loved one the authority to make medical decisions on your behalf, and the medical community a clear indication of your wishes. This is not only important for older adults, but vital for young adults as well, as they turn 18 and head to college. Once 18, young adults are entitled to privacy when it comes to their medical records; a healthcare proxy and power of attorney are necessary to ensure that parents, can get information about their children’s medical condition and help make critical decisions for them, if needed.
Write Now, Revisit Later
Your estate plan, including the above documents, should be revisited every 3-5 years as your situation evolves; factors such as children reaching 18 and changes to your health status and financial situation will impact their verbiage. It’s also critical to name a successor representative, in case your primary choices are not able to handle the role.
Outdated documents can interfere with your representatives’ ability to ensure your needs are met; hospitals and financial institutions may even refuse to honor documents considered too old. All the more reason to see this unusual time as an opportunity to prioritize estate planning.