The Ten Biggest Problems with Your Estate Plan and How to Fix Them Problem #9: Your Situation Is Totally Different

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Most estate planning ads feature a smiling family with a senior couple surrounded by their children and grandchildren. These stock photos can backfire when a reader assumes that estate planning is only for those with spouses or children or generations of relatives that all get along well. The truth is twofold:

  • the actors in those stock photos represent a false reality; and
  • those who are not married and do not have children have an even greater need to plan.

All adults need to make a plan which designates who will take care of their estate in their incapacity or death and who should receive the assets they leave behind. Otherwise, the state will make that decision for them.

Too Much or Too Little Help

The default laws of intestacy (dying without a will—see Problem #1) and finding an agent for health care decisions are tilted toward the nuclear family and do not always fit other situations. The default laws assume that all children take an equal amount and have equal authority; however, this may not work for a situation when a family member is estranged.

A single adult can find himself or herself with either no one willing to step up and serve as guardian, agent, or trustee—or may find a host of well-intentioned but unwanted family offers of assistance. If there is no will, any person can step up to administer the estate after sixty days if no one else has qualified with the Probate Court to do so.

For medical decisions, the default rules look to family members in order of how closely related they are to you. You may have a favorite nephew, but he will not have any more say in your care than a niece you have never met unless you legally designate otherwise. If no family member comes forward to be your health care agent, state law says any person who “has exhibited special care and concern for the patient” can act as your proxy. You need to make sure your health care agent is someone you choose, not someone chosen by state law or any well-wishing volunteer who may or may not follow your wishes.

Many Couples Are Not Married—The Law Treats Them as Strangers

The stock estate planning advertisement prominently features a happily married couple. In fact, many modern couples cohabit for a long time but do not formally marry. Virginia does not recognize common law marriage. No matter how long a couple lives together, they are deemed to be roommates and not spouses. Simply living together grants no rights to hospital visitation, inheritance, or appointment as a guardian or trustee. The only way your partner has any authority or access is if you grant that authority in a legal document.

All I Care About Is My Sick Loved One

When a person has a dependent who is sick or who receives Medicaid or Supplemental Security Income (SSI) for a disability or special need, that concern trumps all others. Most have no idea they can provide for their loved one with a Supplemental Needs Trust (also called a Special Needs Trust) in which they can set aside funds for a family member with special needs and still protect that person’s Medicaid and SSI qualification.

In the case of an infirm parent, some people choose to set up trusts that provide a sum of cash to take care of Mom or Dad for their parent’s lifetime, and then after the parent’s passing direct the remainder to other loved ones or charities.

Sometimes the Heirs Aren’t People

Sometimes the main beneficiaries of an estate are beloved pets or charities that are important to the client. Virginia law now allows for enforceable ‘pet trusts’ that can provide resources to care for animal companions and instructions for the caregivers who will shelter and care for the animals when you cannot.

Charitable giving has always been an important part of wills and trusts. While charities do get tax exemptions, they are not exempt from the fees, delays, and misery of the Probate process. Living Trusts can direct funds to charities directly without the interference and cost of Probate. Vessels like Charitable Remainder Trusts help those who want to provide both to family and philanthropy by giving an income stream to loved ones before distributing the principal to the preferred charity.

Answer to Problem #9

Many people feel that the standard off-the-shelf will does not fit their needs. The solution is to talk to an expert who specializes in estates—the general practitioner may not have enough experience in the area to provide useful context and advice.

At JGB, we help our clients through the planning process by identifying the goals that are important to them:

  • Taking care of the client for life
  • Designating and empowering trustees and agents to manage affairs in life and after death
  • Identifying the people, causes, and creatures of importance and making sure they are properly cared for
  • Making sure medical wishes are expressed and health care agents are named and given the proper authority

Estate planning is the process of taking control of who is in charge of your affairs after your incapacity or passing and of providing them clear instructions on how to care for you and how to implement the wishes you leave behind. This process is important for everyone, particularly those for whom the default laws of the state are unhelpful. You can always count on JGB to work with you to take care of you and your estate planning and estate administration concerns.

Our next installment will focus on Problem #10: Your Plan Will Not Work.

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