Estate Planning - Part 3

So, now that we have your insurance needs straightened out, we’ll talk about estate planning. Estate Planning is the number one thing you can to do tell your family that you love them.

I worked for an Estate Planning attorney in Las Vegas, and that was probably the most beneficial job I’ve ever had. I learned many valuable things about estate planning during that time. Now I’m not an attorney and am not 100% familiar with Tennessee state law, as I only worked with Nevada state law, so you need to seek the council of a certified professional.

There are 4 main documents you should have and they are: A Will, a Living Will, a Durable Power of Attorney, and a Trust. We're going to break each one of those down so that you can understand why and when you need one.

Wills

If you hate your family, do not get a will. A will is the single most important estate planning document that you can get. Why? Because a will not only distributes your property, but it names guardians for your minor children and appoints and Executor of your estate. A will also helps you speed through the probate process.

What happens if you do not have a will? Well, the state does all that stuff for you. And to be perfectly honest, do you think it's a good idea to let the STATE decide who gets your assets, who gets your children, or who distributes your estate? NO. It's a terrible idea, which is why you need the one to lay all of these things out before your death.

Another reason to have a will is that the state does not work for free. Naturally, if the state has to step in and distribute your assets, then the probate fees and costs are going to be much higher. If I am leaving my family something behind, I don't want the state to take more than is absolutely necessary.

So again, a will is very important and will make your family's life much easier upon your passing.

A Living Will

A living will is a document where you decide if you wish to remain on life support or if you wish to die. It also generally expresses your wishes regarding organ and tissue donation. It's main goal is to make sure your choices are honored in the event you are unable to express your wishes, and to take the burden off of your loved ones should the un-thinkable happen. When you have this document and express your wishes, then no one is left wondering what you would want. No one is left with the unnecessary burden of artificially prolonging your life or painfully "pulling the plug" which is a painful choice. This removes the added, unnecessary pain that your loved ones could go through.

A Durable Power of Attorney

This document appoints someone to act in your behalf should you become incapacitated or unable to make decisions for yourself. Obviously, you should name someone that you trust and to whom you can explain your wishes ahead of time. The person who you name in this document will be able to carry on every-day actions in your name, as well as make healthcare decisions, decisions to handle your property, income, bank accounts. Generally speaking, a spouse is named as the one to handle these issues.

If you wait until you need one, then it is too late. One of the sisters in our class explained a time when she needed one of these, and she took it to her husband, whose health was failing, and he no longer remembered how to write his name. That is a prime example of why you cannot wait to get one until you need one. Generally speaking, you can pick one of these up at your doctor's office for free, or you can get them for a low price. It's a very valuable document and one I suggest everyone getting.

A Trust

You need a trust if you have some assets. If you do not have any assets, then at trust is essentially pointless. Since we only own our vehicles and have very little wealth built up (just our mini emergency fund), we do not have a trust. It would be overkill in our situation. But when we begin getting some investments going, we have that fully-funded emergency fund, and we own our home….then we will get a trust.

A Trust protects your assets while you live and after your death. That is why they are generally refered to as "A Living Trust" because you can utilize the wonderful abilities while you are still alive.

One such example of this is that all of your assets are signed over to the trust. This is wonderful because if someone sues you, they cannot take your home, your property, your assets, etc. Why? Because it no longer belongs to YOU, it belongs to your estate – held in the name of the trust. Now in some states, someone can sue a trust, but it is very difficult and there are a lot of protections on trusts.

Another reason trusts are great is that you can not only outline what goes to whom, but you can put limitations, restrictions, and guidelines for disbursement. When I worked for the Estate Planning Attorney in Las Vegas, a casino owner had passed away, and in his trust there was a section about one of his sons. In order for his son to receive his portion of his inheritance, he had to pass drug tests. He also had to have random drug testing over the course of so many months and years in order to keep receiving his portion of the estate. While I don't think many of us would have to worry about that particular instance, it is nice to know that you can say that your child will get ____ amount of money when they graduate college, with a bonus of ______ dollars if they get a 3.5 or higher. Then ______ goes to them on their wedding day, and ______ when they have their first child, and so on. It's very nice to be able to outline everthing like that.

The most important thing a Trust does is that it keeps your estate out of probate. And why do you want to avoid probate? Because it is a LONG process, it is very costly because of all of the fees, and your estate becomes public record. If you have a lot of assets, you do not want money to go to the state and for your assets to be listed as public record for all to see.

Where Do You Get Estate Planning Documents?

Well, there are attornies that deal specifically with Estate Planning. They are very good at what they do, and their number one goal is to make sure you and your family are protected in the event of your death. However, they can be a bit more expensive than many people can afford right now. If I remember correctly, a very very basic will for one person cost about $50 at our office.

However, there is a website that will send you a state specific will. It is US Legal Forms (www.uslegalforms.com). We use US Legal Forms and for a Will, a Living Will and Durable Power of Attorney for both my husband and me, it cost $44.00. That is quite a bit less than what you will pay at an attorney’s office…believe me, I know.

Now Trusts should be done at an attorney's office. This document is far too important to try to take it into your own hands. It is a very long, lengthy document and Estate Planning attornies are the best choices for handling this matter. Depending on the size of your estate and what is involved with distribution, the price can become expensive quickly. When I would type up the trusts, I was amazed at how much work really went into them. We handled many celebrities and casino owners, so the estates were really large and very complex….some paid thousands of dollars for their trusts. However, the regular people with regular stuff didn’t pay nearly that much.

As part of the Nevada State Bar Association, attorneys were required to complete a certain number of pro-bono (or free of charge) cases each year. I believe that requirement exists in many states, so you may be able to talk to an estate planning attorney and see if they’d be willing to draw up a trust for you pro-bono if you have assets and would like to get a trust. It never hurts to ask.


While this was not a thrilling, fun-filled lesson, I hope that it did clear up some confusion you may have about Insurance policies and Estate Planning. All too often people go through life without adequate coverage (both estate planning and insurance) and their families are left scrambling after their passing. I do not want to see that happen to any of us. I do not want us to find ourselves bankrupt because we didn’t carry adequate liability coverage. I do not want to see us or our families struggling with making hard decisions about elder care, life-support, or going through a lengthy probate process.

There is too much pain in the lives of those who did not plan ahead accordingly, and the pain is left for those they leave behind. Do not put this stuff off for another day. Do not say that you will do it later, because there may not be a later. Do not say that you do not need health, disability or life insurance….because you do. Do not say that you do not need a will, or a living will, or a durable power of attorney….because you do. Every single one of us needs those things. We need them, and we have to make them a priority in our lives.

We didn’t have homework last time, but we are certainly going to have it this time, so make sure to look in the homework section.