I read an interesting question recently, which brought back to me why we do estate planning at our firm. The question was:
“If something happens to you today, how would your family be affected tomorrow?”
Estate planning focuses on wills and trusts, powers of attorney and the potential for guardianship. The documents that are completed during estate planning are meant to protect your family in the event that something happens to you. This may be that you have died in an accident or you may be still alive, but unable to care for yourself. While we cannot predict the future, without you having these documents in place, the only certainty is that your family will be relying on the statute and what that statute says that your family will have to do.
For instance, if you are alive, but unable to care for yourself, your family will have to go to court to have you declared incompetent to manage your own affairs and have a guardian appointed. The guardian may be someone that you might desire or it may be another person that you would not have selected. The court might have preferred a spouse to be the guardian, who might be overwhelmed at your condition and dealing with the physical nature of it.
A better approach would be to have your road map set out in the estate planning documents that you complete. Instead of a guardian, you may have a financial power of attorney that you have appointed in a document who starts in that position at such time as you become disabled, coupled with a living trust that selects a trustee to act if you are unable to do so. That trustee will pay your bills, invest your assets, make sure that your income is deposited and in general, do whatever you may currently do for yourself.
So, if you are still not convinced to do your estate planning as it is not enough for you to wonder how your family will cope with the financial aspects of your disability or death, what if you also have either minor children or you have children or family members with special needs? Who will be their guardian and care for them? A child in Illinois is considered to be an adult at the age of 18. Is that the age that you want that child (now considered an adult) to obtain your wealth? Imagine that you have two minor children, an estate of $2.0 million and no spouse that survives you, do you want your children to each receive the amount of $1.0 million at age 18?
The situation is more pronounced if you have a child born with special needs. Who will care for that child in the event that you are not around to do so? In addition to having a provision in your will to appoint a guardian, you will also need to file guardianship proceeding in court at about the time that child will attain the age of 18, as that child is considered an adult at age 18, in spite of any medical condition to the contrary. This means that you are not able to even inquire about medical issues, as the HIPPA law does not allow you to do so.
The purpose of this article is not to scare you or make estate planning more complex than it is, but rather to suggest that you should be more proactive in these uncertain times. While many times, clients are uncertain about what choices to make, the worst choice is the one that is not made. Most documents are not irrevocable and you can change the choice if you later determine that you need to. Not making a choice is making a choice.