Watch: 3 Estate Planning Documents You Should Have
I get asked a lot about what estate planning documents you really need to protect yourself and your family. And, do you really even need an estate plan? In this video, I discuss the three estate planning documents you really do need.
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Transcription
My name is Jammie Taire, and I am with the firm of SmithTaire Legal. SmithTaire Legal is a law firm that handles cases involving estate planning, probate, and personal injury. Our primary focus area is estate planning and probate, and that is actually why I decided to bring this live feed to you today.
I thought I'd do this broadcast today in order to bring some light to you about some things that I think are important for estate planning.
What I wanted to do today is to talk to you generally about estate planning, and include in some information about the advanced directive. In addition, I know that a lot of times people have questions that they needed answered, so I thought that this will also give you the opportunity to talk to an experienced attorney and get some of your questions answered, and maybe some questions that other people have can also be answered. Because if you have a question, most likely somebody else has the question as well.
I'm going to go through a couple of basic documents with you.
When people come to me the first thing they ask me is, What do I need for estate planning? One, do I even need to do anything because I don't actually have an estate. And two, if I do need something, what is it that you recommend? Well, first let me discuss an estate.
An estate is your stuff, so everybody has an estate. If you have a chair, you have an estate. If you have a bank account, you have an estate. If you own a home, you have an estate, your car, those are all things that are made up as part of your estate. Hold on just one moment, I'm getting a question. So all of those things are part of your estate. So whatever you have, big or small, you have an estate. That's just a way of saying your stuff.
So an estate is what comprises your stuff. So if you have anything that you care about, then yes, you need to do some estate planning. So what are the basic documents that you need for estate planning? There are three basic documents that I say you need for estate planning, and these are just the basics. You need:
a will
an advanced directive for healthcare
a power of attorney.
And the power of attorney, you may or may not decide you want to do that, but you definitely need a will and an advanced directive for healthcare.
So first let's start with the will.
What is a will? A will is a document that says that when you pass, where you want your stuff to go. So why do you need this? Because you've worked your life for this stuff, so you want to decide where it goes. You don't want the state to decide where your stuff goes, and that's why you need a will. So if you don't have a will, what happens? Because sometimes people come to me and they say, well I don't care, I'll just let my family fight it out. Well, it's not quite that easy, and your family will have to fight it out. But the state, and this is for the State of Georgia, the State of Georgia has already said where your stuff goes in the event something happens to you and you don't have a will. So I'm going to go through a couple of different scenarios.
In the State of Georgia, if you are married and you have children and you do not have a will, then your property passes to your spouse and your children equally, no matter the age of your children. Now, if this is the scenario you want, that's fine. But for most people, that's not the scenario they want. They may want their things to first pass to their spouse, and then if something happens to their spouse, to their children. Or if they have a blended family, they may want the things to go to their children and not to their spouse. Or they may want a different percentage to go to their spouse and their children. Or they may want it to go some to their spouse and sound to their children.
Well, if you don't have a will, you don't get to say that. What if you don't have a spouse and you don't have a will? Then it goes to your children equally. As I just provided in another example to a friend of mine, sometimes you've made a lot of provisions for one of your children and not so much for the other children. So you may want one child to get something and another child not to get something. So these are the reasons why it's important that you decide, before something happens to you, what you want to do. And that's the reason why you need a will.
The next document is the advanced directive for healthcare. An advanced directive for healthcare says who you want to make decisions for you in the event you're unable to in a medical situation. So not in a financial situation, this just says that in the event you're in the hospital and you're unable to make decisions for yourself, who you're appointing to make those decisions for you.
Of course, in light of COVID-19 and everything that's going on this document is ultra-important right now, because you do want to be able to say who's going to make those decisions for you. If you are single, then you would want to appoint someone. It may be an adult child, it may be a parent, it may be a close friend. But you want to be able to tell the hospital and give them some direction as to who they should look to to make decisions for you in the event that you cannot. This is of critical importance because in the event the hospital is unable to make those decisions, sometimes that family or that friend or that child could end up in litigation. I always give, and I probably will unto something else happens, give the example of Terry Schiavo, and that is just, for me, the ultimate example of why you need an advanced directive.
The advanced directive for healthcare says:
You can appoint an agent, a primary agent.
You can appoint a backup agent or a successor agent, or you can appoint two agents together.
The advanced directive for healthcare not only says who they can turn to, but it also appoints somewhat as guardian over you. So in the event you get out of the hospital and you're okay, but you still can't make decisions for yourself, then this is the person who can take care of you. I always say this is the person who can put you in the nursing home, so choose carefully.
Your agent does not have to be the same person as your guardian, but if you complete an advanced directive for healthcare you have the ability to make those decisions and to decide who is going to be the person who makes decisions for you. And sometimes if you're married that might not be your spouse, because your spouse might be too distraught to make those decisions. So instead you might appoint an adult child. Or if you're not married, it might not be an adult child because your adult child might be too distraught to make those decisions for you. So you might appoint a friend. And of course, if you're married and you and your spouse are involved in an accident together, that's where that backup agent is going to come into place. So if you make that decision today, or if you make that decision in advance, then in the event something happens you're already prepared.
And the truth is none of us know when something is going to happen, so we need to try to, especially while we have the time right now, make these decisions today. We need to sit down and have those important conversations. And if you're thinking about appointing a friend or someone as your power of attorney for healthcare, then you need to talk to them in advance as well to say this is what I'm thinking about doing, do you think you're going to be able to make these decisions for me? Because they may have to make decisions like an amputation. They may have to make decisions like blood transfusion. They may have to make decisions about actually pulling you off life support. So that's why you will want to talk to that agent in advance of appointing them.
That brings me to the living will. In the past, and I hate to date myself, when I first started this business we used to do a living will and a power of attorney for healthcare. That has now changed. We no longer do the living wills and the power of attorney for healthcare. It's all combined into this advanced directive for healthcare. So in the advanced directive for healthcare, there is language that addresses what you want to happen in the event you are in a coma, or you're in a persistent vegetative state, or you're on life support. So basically if you're on life support, what you want to happen.
And there are three options under the advanced directive for healthcare:
You can say that you want them to keep you alive no matter what. So if I'm on life support, I want to stay on life support, and I want you to do everything you can to make sure that I stay alive.
You can say I still want pain management medication, but I don't want to be on life support, I want them to discontinue the life support.
I want them to discontinue life support, but I still want a ventilator, or I still want food and hydration, or I still want whatever provisions you elect.
In summary, the importance of doing the advanced directive for healthcare is so you can go ahead and make these decisions right now before it's too late.
I also want to discuss the power of attorney with you. That is different than the advanced directive for healthcare. The advanced directive for healthcare deals with healthcare, the power of attorney deals with your finances. That's your money. So this document says who you want to appoint to make decisions about your money. The power of attorney changed a few years ago, and it's very specific. Now you can decide when this is going to take effect. You can decide what this power of attorney will have control over. Like, you might not want them to have the ability to sell your house, or you might not want them to have the ability to access certain accounts or to change your beneficiaries. The power of attorney for finances deals with all of those things.
But it's also important that you have this document in place because in the event something happens to you, you want to make sure your family can keep going. You want to make sure, especially if you're the financial breadwinner or if you're a participant and your family relies on your income, you want to make sure they still have access to that so that they can keep going until you can come back. In the power of attorney, you get to control how long that power of attorney is going to be in effect or when it's in effect. And it's very important to have this, because of course, I have people come to me, families come to me, and the person hasn't passed but they need to access his bank account, or they need the ability to sell this house. And they can't, because their loved one is incapacitated and they can't give them that ability now.
So again, while we're all sitting at home and some of us are unhappy about it, I'm not, but some of us are unhappy about it then we can sit down and have these conversations. And we can also talk to the people about, yes, I want to appoint you as my agent for my finances. Do you think you can do that? And don't give that power to somebody who isn't able to take care of their own money. So don't give it to that person, give it to somebody who you rely on, who you can trust, who you think is good with money.
If you need to reach me, if you have any follow-up questions about this, because I know I'm going through this information pretty quickly, you can call me at (678) 253-8133. Of course, you can always reach out on email at contact@tairelaw.com. If you want to know how much this costs, because of course, that's a concern especially during this topic, please feel free to call me. It's going to vary from person to person, quite frankly, because I have to have a conversation with you about what your needs are, if you have basic needs, if you need something more significant. So things like that we'll have to have a conversation about and discuss to decide exactly how much it's going to cost you.
I also wanted to discuss with you what is guardianship, especially, in light of everything that's going on. So there are various types of guardianship, but today I'm going to discuss minor guardianship and guardianship over an incapacitated adult. Most of us know what a minor guardianship is. That's if someone wants us to take care of their child for some purpose. A lot of times you see them with the military, and you may have minor guardianship over your grandchild or something like that.
Guardianship over an incapacitated adult is different and usually causes a little bit more litigation. And this may be a situation where you have a special needs child who has now become an adult, and you find yourself in a situation where you go to the doctor and they're no longer willing to talk to you because of HIPAA restriction. So you would need to get guardianship over that adult child. Or even in a case with a parent, sometimes we were taking care of our parents and so we need to get guardianship over that parent so that we can make decisions that the hospitals or the healthcare facilities will talk to us about what's going on with that parent. So you have to go through probate in order to get guardianship over that adult parent as well.
I see that somebody has a question about what can I do to plan for my minor children. Well, that goes back to the will. Well, not necessarily to the will, but that is one of the things that you can do through the will. Is with the will, you can do what's called a testamentary trust. So in the will, you can appoint someone to handle the money for your child. So especially in the case where you have a child outside of the marriage, or you have a child with somebody whom you're not married to, you might not want that person to control the child's money. Then your will gives you the ability to do that. You can also do that through a trust.
The will also gives you the ability to appoint someone as guardian over your child. So of course if the child's mother and father are involved in the child's life, then most likely it's going to be that person. But if they're not, then you have the ability to appoint someone through your will who's going to take care of your child. But even if it's going to be the child's mother or father who you don't have a great relationship with, they might take care of the child, but then through the will you can decide who's going to take care of that child's money. So they might get the child, but at least you know that that child is going to be taken care of financially with somebody that you trust to take care of that child's money. You can also do that through a trust.
Now, a trust is a different animal altogether. And we do quite a few trusts, but sometimes people can't do trusts because of the costs involved with doing a trust. They are quite a bit more expensive than a will, but it does help you avoid probate because you can put things into the trust that will then not go through the probate process. Hold on just one moment.
So someone asked me if I am doing virtual appointments. Yes, my office is open and we are doing business. We're handling a lot of probate cases right now, and we're doing some wills and trusts. And Governor Kemp actually just passed legislation, not passed legislation, but issued an order which allows us to do virtual signing. So with the will, a will requires that you have two witnesses. And in our wills, we also do a notary, what's called a self-proving affidavit, to make sure that your loved ones don't have to look for your witnesses at the time that you pass. So we're allowed to do virtual signings, and it's sort of similar to what we're doing right now. We do a Zoom conference, our team meets and schedules it so that the notary's there, the witnesses are there. But they're all separate, but as long as you see the person sign the document then that's sufficient. So we can still comply with the shelter in place and get your documents in place today. And that's a great question because a lot of people are saying, well, we can't meet anyway. But most law firms are still open and doing business. And luckily, we have things in place to allow us to still get these documents signed for you, and properly executed.
So I want to go over the will just a little bit more, and the importance of having a will, and exactly what's covered through the will. So in the will, as I've already said, you get to decide where your stuff goes and who it goes to. But you also get to decide, as I just said, about your children, your minor children, and that's very important. And it's very important with blended families, because with a blended family then some people say, well, I think that they'll make the right decision. But you're not sure if they're going to make the right decision, and your will or your trust ensures that what you want to see happen is actually going to happen.
And a lot of people say, well, sometimes it seems like it's all tied up in litigation. Well, people can fight about whatever they want to fight about, but if you have an airtight will at least you know when they come out on the other side of that, that things are going to go the way you intended them to go. And that's another reason why it's important not to do a Legal Zoom or download a document off of the internet. I'm not saying go with me, but I am saying talk to an attorney about getting your will done so you can make sure that it says what you want it to say.
I posted some time ago some information that I got off of one of these websites, off Legal Zoom as a matter of fact. On the website it says that they're not an attorney, they say they're not a law firm, that they don't represent you. That's not what you want to hear when you're about to do some very important estate planning. You don't want somebody who's saying I don't represent you, I'm not a law firm. That is not the way to go with something that's so important. And the thing with the will is that you won't know if it was valid or if it was properly done until it's too late, and that's when your family will find out. So I always say, you can spend the time now or you can spend the time later. I mean, you can spend the money now, or you can spend the money later. But you're going to spend the money.
And quite frankly, I get more off of probate cases than I do off of the will. So on the back end, it's better for me. But I'd rather you be protected and do it on the front end because you've worked your entire life, I have, your entire life to build whatever it is you have. Even if it's not a house, even if it's just the money in your bank account, even if it's just the clothes on your back, even if it's just the furniture in your house, you have worked for those things. And so you should have the ability to decide what's going to happen to it, who's going to get it, and how it's going to go. Don't let somebody else make that decision for you.
So what are some things that you can do to avoid probate? There are a few things that I call probate hacks to help you avoid the probate process. One, some very basic things that you can do, is if you have a bank account you can do what's called a payable on death. And what that is, is that's when you're appointing, you're saying who the money goes to in the event of your death. You're not putting them as a signatory on your account, so they can't go today and access those funds. You're just saying that in the event something happens to me and I pass, which you will, we all will, then this is who I want the money to go to. So that's one of the ways that you can avoid it.
Anything where you have a named beneficiary falls outside of your estate. So life insurance, your IRAs, your 401ks, your pensions, all of those things where you have a named beneficiary, they fall outside of your estate so they are not part of probate. And I do not recommend that you put your estate on those documents as the beneficiary. And the reason I don't recommend that is because then it does become part of your estate, and if you have creditors when you pass then your creditors can access that money. So anything where you have a named beneficiary is not a part of your estate.
Another thing you can do, and this really goes to people who have property that they jointly own with someone, if you jointly own property with someone you can change the deed on that property from a tenant in common deed to what's called a joint right of survivorship deed. And that means that when you pass, the property automatically passes to the other person. And this goes vice versa as well, so this is for you and them. So I own this house with my husband, and we have our deed with joint right of survivorship. So if something happens to me, then the property automatically passes to him. He doesn't have to go through the probate process. And the same, if something happens to him then the property automatically passes to me and we don't have to go through it, he doesn't and I don't have to go through the probate process, which is a big deal.
Another thing that you can do as far as the probate hack is of course a trust, which I've already touched on briefly. And a trust is its own separate being, and you put property into the trust. So you create this legal entity, and then property goes into that entity. So if you have a house, you may transfer the house from yourself to the trust, and that way it also does not pass through the probate process.
I hope that it has been helpful to you. My name is Jammie Taire, with SmithTaire Legal. If you have any questions, you can reach me at (678) 253-8133 or at jtaire@tairelaw.com. And if you'd like to be included in our email list, we send out emails with valuable information, please feel free to message me and I'll be sure to include your email address on our emails. I hope that this has been helpful to you.
Stay safe, see you soon.