T he good news is that setting things up the right way and doing the right thing by your family can be easy once you know what to do. And the process of getting things set up the right way can be downright enlightening, as it helps you to gain clarity about what’s most important to you and what you really want for your children. Let’s start with the bare minimum of what you need to have in place to make life as easy as possible for your kids and the people who will care for them should anything at all happen to you.
Document Set #1:
Kids Protection Plan Regardless of the size of your bank account, if you have a child at home who depends on you, you need to have a comprehensive Kids Protection Plan® (KPP) in place to ensure your child’s well-being and care in case you can’t be there. A KPP begins with naming legal guardians to raise your children if anything happens to you and your spouse. But that’s just the beginning. A comprehensive KPP will also name local friends or family as guardians for the immediate/short-term care of your children so that the authorities never have to take your children out of your home and into the care of strangers. With a KPP in place, you’ll carry an ID card in your wallet listing the names and addresses of your immediate/short-term guardians, as well as provide written instructions to all of the people who care for your children, such as babysitters and schools. Finally, a KPP will confidentially exclude anyone you know you would never want to serve as guardian of your children to ensure there are no court-room battles over your child’s care, in addition to providing detailed instructions about things like health care, education, discipline and your values, so your children are raised the way you want, no matter what. If you are not yet working with an attorney to ensure your wishes are properly documented and disseminated to the appropriate recipients, you can get started at www.kidsprotectionplan.com. This site offers a fast and interactive process to help you chose the right people to raise your kids if you can’t, and then easily document your choices… legally. Best of all, this site is totally free, so there’s no excuse not to get things taken care of anymore.
Document Set #2:
Financial Durable Power of Attorney A financial durable power of attorney is something every adult needs, even if you don’t have little kids at home. This document is what will let your family access your bank accounts, pay your bills, and make financial and legal decisions for you if you are hospitalized or otherwise incapacitated. T his story should bring home the importance of having a durable power of attorney in place: My law firm was contacted by a young woman after her father was hurt at his janitorial job, hospitalized and unable to communicate. This man thought he didn’t need estate planning because his income was very low and he had less than $10,000 in the bank. Unfortunately though, his failure to plan left his family in a lurch. T hey needed the little bit of money he had in the bank, but couldn’t access it without going to court because the account was in his name and he didn’t have a durable power of attorney naming anyone to act for him legally. T he cost of going to court was going to cost their family more than the money that was in the bank! Don’t leave your family in this kind of a painful situation, unable to access the limited resources you have because you didn’t do what you need to do. Be sure you have a financial durable power of attorney in place and make sure it’s comprehensive and will work when your family needs it.
Document Set #3:
Health Care Directive (Living Will) A Health Care Directive (also known as a Living Will or Health Care Power of Attorney) is another document set that every adult needs, even if you don’t have little ones at home counting on you. These sets of documents do two important things: 1. Appoint the person you want to make health care decisions for you if you cannot make them for yourself; and 2. Tell your appointed decision-maker how you want those decisions to be made. Each state has its own rules for how these documents should be prepared. In some cases, your instructions can be all in one document and in others they need to be two separate documents. The most important thing is that you get something down in writing. And, once again, make sure you’ve got something that will really work when your family needs it. I recommend giving broad discretion to someone you trust to make decisions about all of your health care needs, including life-saving medical care, such as respiration, but also continued nutrition and hydration in case you are incapacitated. If you recall the Terry Schiavo case from several years ago (in which her husband and her parents fought over whether she should be kept alive or not and the case was brought all the way to the Florida Supreme Court), the issue was not whether to continue to keep her lungs pumping, but whether to continue to provide nutrition and hydration – so be sure your medical directive addresses these issues.
Document Set #4:
Will When it comes to estate planning, most people think of having a will. Unfortunately, having a will often provides a false sense of security to people who think “I have a will, therefore, I’ve taken care of everything.” Sadly, that’s a myth. In fact, your will is the least important of the five legal documents every parent must know about. A will sets forth what you want to happen to your assets at the time of your death. But, when there’s a will and your assets are owned in your name, the will merely acts as instructions to the court as to what to do with your assets. T hat means your family is stuck dealing with the court after you are gone. Nobody wants that, trust me. T he court process for handling your assets after your death is called probate. It’s typically expensive time-consuming, and always totally public, which means anyone in town can find out how much you’ve left behind, who it went to and when they get it. That puts your loved ones on the radar of every con artist in the neighborhood. A will alone is really only appropriate for parents who have no (or very limited) assets titled in their name. If you have assets, such as a home, bank accounts, life insurance, and retirement accounts, you need to have a living trust to keep everything out of court, totally private and make it easy for your loved ones. You may have heard that if you only have life insurance and retirement accounts, you can simply name beneficiaries on those assets and avoid probate. That’s true, but not going to work if you have minor children because they are too young to be the beneficiaries of your assets and would end up in court with a guardian appointed to handle them—which I can tell you from experience is not what you want.
Document Set #5:
Trust If you have financial assets or real estate, you want to have a living trust. A living trust is the single best way to make life as easy as possible for the people you love, bar none. It keeps things totally private, out of court, and ensures your assets are passed in the way you want, to the people you want, easily and quickly. But, and it’s a big BUT, most people who have a living trust in place have one that won’t work when their family needs it. It’s the same for each of these documents I’ve talked about; they are only going to work the way they were designed to work if the law stays the same and your life stays the same. As your life changes, the documents need to change. As the law changes, the documents need to change. And, for your living trust, it won’t work unless all of your assets are titled in the name of it, not just once, but every time you acquire an asset in the future.
If you or someone you care about has been in an accident, we’re here to talk.
Contact us today for a free consultation.