I recently worked with a man whose situation illustrates how important it is to have an estate plan in place. "Bill" passed away in October and had an estate worth over 4 million dollars. He was single with no kids and had one one brother with whom he had little contact.
The first time I met Bill was in the hospital, a day after he left the ICU. His assistant contacted me because Bill didn't have an estate plan in place. Luckily, I was able to finish Bill's plan weeks before he passed away. If he hadn't created a plan a few things would have happened:
- If Bill had died without a Will or a Trust, his entire estate would have gone to his brother. That was exactly the outcome Bill didn't want. He ended up distributing his estate to 40 different friends and charities. When someone dies without a Will or a Trust, state law determines where one's estate goes. A Will or a Trust allows a person to decide exactly how they want their assets distributed
- I always prepare a Living Will when I create an estate plan. A Living Will contains a person's instructions in the event they're in a vegetative state or have a terminal condition. Before Bill died, he fell into a vegetative state. His healthcare agent relied on Bill's Living Will to make end-of-life decisions. I later spoke with Bill's healthcare agent and he expressed how grateful he was that Bill had a Living Will. He simply followed Bill's wishes and wasn't left with the difficulty of deciding when to end another person's life.
I've learned that estate planning is really meant to benefit the people we love. When we plan, we provide set of instructions wherein we describe what we want to happen during our incapacity and at our death. These instructions are invaluable when it comes time to make decisions. Taking care of our estate planning is a great gift to give our loved ones this holiday season.