Everyone has an estate plan even if you haven’t created one yet. If you haven’t created your own, the government is going to create or has created one for you. This means a couple of things: a) it’s more expensive if the government does it; b) you don’t get to get any choices with regards to whom your people are; c) you don’t get any choices to who gets your stuff.
The four basic documents are power of attorney, medical power of attorney, health care directive and your will. The power of attorney, medical power of attorney covers you while you’re alive. The power of attorney covers your financial decisions and management of your money. The medical power of attorney covers you for medical decisions. If you don’t have these, let’s say, if you meet an accident and you’re in coma for six months, someone would have to petition the court to have a guardian appointed to you. It costs money, it takes time and it takes paper work. The court is gonna decide who takes care of yourself. More often than not it’s not a family member, usually it’s a professional guardian and they might not know what’s important in your life. If you have a power of attorney you would have picked them.
There’s this little thing called HIPA which is a medical privacy law which prevents the doctors from sharing your medical information to the people who aren’t allowed to have access to it. This means everybody except for your spouse. That’s the first area that the estate government doesn’t really take care of you. It’s really gonna be difficult to have your wishes followed.
There’s a reality show called ‘Hollywood Medium’, he goes around an does readings. He’s very good at what he does. It’s really interesting that people talk to him and what they often want to know is “Did I do the right thing? Did I honour my special person? Did I give them what they wanted?” People want to know. If you don’t have estate planning, you just lose the opportunity to do that. You’re gonna leave your family thinking if they did the right thing. Nobody wants that.
If you don’t have a will and you’ve got kids, the court is gonna choose the guardians of your children. This often creates tension between people who want to be in charge of raising your kids. It may turn to the best person for the job or the people who are not the best person for XYZ. It can be a cost of family strife. The judge does not know your political, religious, educational beliefs. Your beliefs when it comes to money. They don’t know your values and philosophies. They just know people who are good on paper but may be terrible for what you think is important for raising your kids.
The other thing is you won’t get to pick who gets your stuff. If distributing your assets is important then have estate planning. If you don’t have one, the court will just look to a specific set of rules that the state dreamed up. If you’re married, your significant other would get most of the stuff. If you’re not married, your significant other gets nothing; your friends get nothing, charity-nothing. It will all go to your parents, siblings and then down the line.
Everybody has an estate plan. Make sure that you have the estate plan that you want. If you want the government to do it then that’s fine but the show helps you make informed choices. Stop making choices in the dark. Stop guessing. Learn the stuff and make the best choice.
First things first, the power of attorney.
Christopher Small is the owner of CMS Law Firm LLC a Seattle estate planning law firm. Click here for a free strategy session.
