This week’s podcast and blog is going to be a totally different conversation than what you are used to talking about on here. It is an awkward conversation that you know you need to have, but you just don’t want to have it. In our lifetimes, you think that you have all the time in the world, but, you don’t know what will happen tomorrow. You have no clue what the next day brings us, not just with ourselves, but also with our family members. Which leads me to say, you need to have an Estate Plan in place for us and our loved ones!
This is why I asked my friend Amy Antonellis, who is an attorney who specializes in Estate Planning here in Massachusetts (full disclosure.. she is my attorney!), to give us some information on better understanding all of the moving parts and what you need to do to protect ourselves.
A lot of people think Estate Planning is an awkward conversation, but Amy views it as an empowering conversation! She says it’s a whole hell of a lot easier to start this from a place of knowledge and power versus waiting for the panic to strike and you are in a hospital or rehab facility and don’t know what to do for our loved ones.
Alright, so you the reader are 40 something right now, have kids, and wondering,” Why should I do this?”. “Why is this so important for myself and my family?”.
As I mentioned in the intro, this was recorded shortly after Kobe Bryant’s death and then the corona virus hit. I think many of were caught off guard by how quickly life can change. Now with Covid-19 we are seeing that families are even getting a chance to say to good bye to their loved ones. The key is is that you don’t want to get caught off guard. This virus is not discriminating.
Ladies, I can’t stress enough how important to have something in place such as a Comprehensive Estate Plan especially when you have children involved. And it is really a two-fold approach. One, you want to make sure that you have someone who can step into your shoes and make decisions if you lose mental capacity. And second, you want to have a road map as to where the assets will go, how they will get there and who will manage them.
This applies to you even if you don’t have a lot of assets or money, this applies to you if you have children, this applies to you if your children at 18 or older, this applies if you are 18 or older.
And this is something you need for medical reasons as well which would be a Medical Proxy, which is someone to step up to give direction when are you not able to do so in the hospitals. The Power of Attorney is needed as well to step into your shoes. They will be there for you and your children to make legal and financial decisions. This person will do these things for you and if it isn’t in place than courts get involved and that is what you want to avoid at all costs. The government works on their own timeline.
Now the other spectrum of this is our elderly parents. It isn’t stuff you talked about as kids, right? So if they are 70 or older, it is a critical time to talk to them about this and get these things done. And it has to be done before someone loses mental capacity so that they have a document will be in place to say that you can make decisions if they cannot.
A lot of people, as well as our parents, just have a will in place and a think that this is all they need and that by having one, the courts will not be involved. But this is not the case. You definitely need a will, but you also need something called a Trust, which is what will help keep you and your family out of court and avoid the probate process. Your Will, will tell how the assets get from the individual to the family, but the Trust will get courts out of your life and give you instant access to everything. Trusts are very important for people who want to keep things private, keep out of courts and who have minor children involved.
A Trust isn’t for people who have a ton of money either. It is really for everyone. If you have life insurance or retirement, not just money in your pocket right now, but a large sum of money that will need to be distributed especially when a younger child becomes of age than you want to have this in place. Even if you don’t have a lot of money, but you own a home than you need this as well. The Trust will keep the control WITHIN the family and would give the Trustee control to decide instead of the courts. AND THAT is your ultimate goal, to keep things out of the courts!
What about when you have kids and your sister or someone else is going to get them? What do you do in this situation? What needs to be done?
What are the logistics when you something happens to you and your children are going to go to a family member? Your sister lives in California and cannot get to your kids in time if something was to happen?
For this, you would have to get something called a Guardianship, which would include a Permanent Guardianship. And in the instance that family member cannot get there in time, a Temporary Guardianship needs to be appointed until that Permanent one is available. For this, you will need the proper documentation to tell the state and school authorities to release the children to who you want them to go to. [You can also make someone who is the permanent guardian but have someone else who is responsible for the trust if that guardian is not great with money. A TRUSTEE who manages the finances and the assets. ]
Courts have very hard and fast rules when it comes to these kinds of things, about the bloodline and what people inherit and what that looks like. And in these types of situations, emotions do not matter. So, it is important to have things in place with parents, spouses and children. There is NO automatic assumption in the courts. You need documentation to have things provided for the right people. And do not try and cut costs when it comes to this and try to do it online. This really needs to be done by someone helping you and guiding you so having counsel to help you is the best way to get it done.
I will urge this again… it is so important to have these conversations with your spouse, parents and grandparents and you need to know where the documentations are for Estate Planning. You owe this to yourself and to them so that if something were to happen, you have a general sense of what is going on and where you go next.
What are the most important documents that people should have to get their Estate Planning all in order?
- Standard Trust Plan
- A Trust which will help you to avoid going to probate.
- A Medical Proxy that will make medical decisions for you if you cannot do it for yourself.
- A Power of Attorney which will allow someone to make legal and financial decisions for you if you cannot make it for yourself.
- A Living Will is a document that will say whether or not you want to be kept alive if hooked up to machines and are in a permanent vegetative state.
- HIPPA Releases are important for children who turn 18 and it gives the doctors permission to speak with someone other than them. You don’t have the rights as parents to hear medical info once they are over 18.
- Guardianship, both permanent and temporary.
- Make sure you also have a Last Will in the Testament in case something doesn’t make it to the trust.
**If the documents are drafted in Massachusetts but you move, the Trust can be taken with you wherever you go. But the local documents, medical proxy and power of attorney or will, you may need to meet with an estate planning attorney to where you move to and get it updated for their state-specific.
These documents are not one and done. They are a living, breathing, evolving thing that changes as you change and age and evolve. Every 3 years or so you should touch them. Take them out, review them, look at them, but the main benchmark would be a life change. Think a birth, death, divorce, change in the immediate family that would be helping you if something were to happen, anything like that then they should be looked at again and possibly revised.
Having this information is really the best thing you could do for yourself! Don’t assume your parents have taken care of this, don’t assume your spouse has taken care of this. Actually, ask the questions and get a better understanding of their wishes. All it takes is 5 minutes to cover your ass!!
The best person that knows your family is you and not the court. So, you want to keep this out of the courts’ hands as best as possible!
I hope you guys found this helpful considering everything that is going on right now. If you have any questions magic makers, please reach out to Amy! She is truly amazing and so helpful!
Amy, what is 1 thing that makes you feel magical?
Just knowing that I am waking up every single day putting my heart forward to serve people. I am living my purpose and I know I am doing good in this world!
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