Your Kids Will Thank You

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Your Kids Will Thank You

One of the questions I often ask people who come to our workshops, is “What do you want to accomplish when doing your estate plan?”  Most people tell me they want to protect stuff from the nursing home, while others want to be smart about taxes. Some people say they just want to make things easy for their family. They don’t want to be a burden and they want to keep the family peace. 

With this goal in mind, I want to share some tips on how we can put together a meaningful plan for your family to reduce their stress when you are affected with health issues. When you pass away, your family will go through the grieving process, but you don’t want it to be a stressful time from a financial and or legal standpoint. Rather, you want to set your kids up for success.

What does it mean by “Setting your kids up for success”? 

Often, when people do an estate plan they’ll want to write a Will. When they pass away, the kids tend to take over as executor or trustee. If a parent gets sick before they pass away, the kids may take over as power of attorney or guardian. 

What is Guardianship?

Let’s assume that people don’t do any planning, and have no legal documents. Should they become incapacitated, their kids will end up in guardianship. Let’s take Fred for example, who hasn’t done any planning, and is a widower. If he has a stroke, his kids need to get control of the money and make decisions. However, if Fred has not done any planning, his kids cannot make decisions simply because they are his children. They have to go through a process called guardianship. This means taking Fred into the courthouse to be declared legally incapacitated, by a judge. The judge may request that the guardian reports back regularly, so that the judge can make sure the guardian is the right person to make the decisions. This can be an expensive legal process, which can also be emotionally challenging.

Can Guardianship Be Avoided?

It’s easy to avoid the guardianship process by simply having a Power of Attorney document. This document lists somebody to be your agent, who will be your legal and financial decision maker. In the event that you become incapacitated, somebody else can act on your behalf. They can walk into any bank or financial institution with the Power of Attorney document, and do what needs to be done, while acting in your best interests. Fortunately, we don’t need the courthouse to make it happen. While we cannot prevent getting sick as we get older, whether it’s having dementia or a stroke that affects us, we can give our kids the legal authority to make decisions. 

Communicate with Your Kids

In addition to having a Power of Attorney, you also need to have a Will or a Trust in place. We encourage our clients to use a trust instead of a Will, to avoid going through the probate process. Regardless of whether your child is the executor of a Will or the trustee of trust, when you pass away, they will have roles and responsibilities. It is important for you to communicate with your children to tell them about what their future roles and responsibilities will be. It is not enough to just create a document and leave it on the shelf. You need to tell your kids where your assets are, where you bank, who the financial advisor is and who the attorney is. 

Avoid The Stress

It often happens after a parent has passed away, that the adult children come to us with a bag of their parent’s documents and paperwork, trying to make sense of it. The kids are not only grieving after losing a parent, but they now have to sort through mom or dad’s belongings and paperwork. They are also confused about what their responsibility is as an executor or trustee. I urge you to make it easy for your kids to fulfil their roles, by sharing details of where your assets are. You don’t have to share details of the value of your assets while you’re still living, but I encourage you to share the necessary details with your kids. This will help them with the administration and avoid a stressful situation.

Why You Need an Advanced Directive

Who would make any health care decisions, if you are affected by a health issue and cannot make decisions? You need to decide who that person will be, and communicate with them. If you are elderly woman with no surviving spouse, one of your children will have to make decisions if you are unable to. You would need a document called an Advanced Directive, stating what must be done if you get sick or become incapacitated. It is wise to appoint two different family members to make financial and healthcare decisions respectively.

Consider Having a Life Care Plan

I encourage you to consider enlisting our help to create a Life Care Plan, which we offer at Sechler Law Firm. This plan takes into consideration where you will get care, and how you will pay for it. It means your family will not have to worry about whether they have made the right decision about your care. We have a social worker and a healthcare professional on our team, because life care planning is more about healthcare planning than it is traditional legal work. However, we consider it to all be part of doing estate planning. 

To find out more, call 724 546 4227. You can learn more by coming to one of our Three Secrets Estate Planning Workshops. Register here for a workshop. See you there!