Endnotes

Copyright 2014 by Peggy R. Hoyt
ISBN-13:978-0-9912501-8-9

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This book makes no financial recommendations to the reader and should not be viewed as a substitute for the need to review this topic with a trusted advisor, resource or expert.

CHAPTER ONE
Why is Estate Planning Important?

It’s never too early to plan, because, you never know when it will be too late.

Americans are optimistic.

Have you ever heard someone say, “When I win the lottery,“ and “If I die?” It’s the way we think—someday we are all going to be rich and none of us is ever going die. Even in a perfect world, these would be lofty goals. The reality is that few of us will ever win the lottery or even inherit significant amounts of money and none of us will get out of here alive. It’s no wonder, however, that we are hesitant to think about, talk about and plan for those events in our lives that are inevitable and have real potential for creating unnecessary grief and expense for our family.

“I don’t have anything.” Often, this is the response when a conversation about estate planning starts.

The truth is, you have more than you think.

First, you have people you love. In addition, you may have a home, some financial assets, a retirement plan, possibly a life insurance policy or annuity and some personal property. You may have pets that are important to you. Everyone has someone or something they need to plan for. Many people believe an “estate plan” is having a will, but it’s more expansive than that.

Who has an estate plan? Everyone!

That’s because if you don’t create your own estate plan, your state of residence is happy to create one for you. Sadly, it is rarely the plan you would create for yourself if you had the education and tools necessary to make well-informed decisions. Hopefully that’s why you are reading this book—for the purpose of educating yourself about your estate planning options.

You might be surprised to learn that most estate plans don’t work. If you’ve ever heard someone say about a loved one who passed away, “Boy if they only knew what was going on, they would be rolling over in their grave!” then you’ve experienced the classic expression regarding an estate plan that didn’t work. Something went wrong. What that something was could be any one of a variety of things—perhaps an unwanted probate, unexpected taxes, unintended beneficiaries, unequal distributions, business succession issues, family hostility, and the list goes on.

A primary goal of estate planning should be to create a plan that works—for you and for your family. No two families are alike and as a result, no two plans will ever be alike.

Estate planning is not for the faint of heart and should never be left to a form found online—there are too many unexpected and potentially devastating consequences. Contrary to what you may have heard, there is no boilerplate “one size fits all” when it comes to estate planning.

Estate planning implicates many other areas of the law. These can include family law, real estate law, banking law, homestead law, guardianship law, probate and trust administration law, tax law, asset protection law and contract law, to name a few. Unless you’re an expert in each of these areas of the law and know how they affect your family, then getting a professional on your team will increase the likelihood of creating a plan that will work for you and your family.

Every day you meet well-meaning individuals and professionals that will inadvertently give you estate planning advice. You’ll find them in the form of realtors, bankers, financial advisors, insurance agents, title agents and car sales personnel, just to mention a few. For example, when you open a bank account, you might be asked for ownership instructions or a beneficiary designation. This is where the trouble begins. How you title your account and who you name as beneficiary should be consistent with your intended estate plan or you may be creating problems down the road.

Your estate plan should be designed to accomplish a variety of goals.

For instance, what happens if you become mentally disabled during your lifetime? Statistics indicate we are more likely to become disabled for a period of time, rather than just “simply” dying.1

And, at the time of death, what are your goals? Avoiding probate shouldn’t be your only goal. Protecting your family and making sure your assets are distributed when, how and to whom you want should be a central focus.

Remember, it’s your family, your loved ones, and your wishes and goals.

The best course of action starts with working with a qualified legal professional who has expertise and experience in estate planning and elder law—and someone who will listen, answer your questions and help you understand how your plan will work. Only then can you have certainty that your plan has the greatest probability of success.

CHAPTER TWO
Should I Plan for Mental Disability?

No book on estate planning would be complete without a conversation about mental disability. As a nation, we are living longer.2 Living longer may mean more health related issues, including the loss of mental capacity. As a result, a key opening question is, “Who will make legal and health care decisions for you if you can’t make them for yourself?”

What would happen if tomorrow you were involved in a car accident that wasn’t your fault, but that resulted in serious injury, including a coma? Are you prepared?

Without a Health Care Power of Attorney (Health Care Surrogate) there will be no one legally appointed to make medical care decisions for you. Without a Durable Financial Power of Attorney there will be no one legally appointed to make legal and financial decisions for you. The results could be catastrophic. Likely, your family will be forced to subject you (and your assets) to a guardianship proceeding.