Five Estate Planning Documents We All Need
— Mary Anne Vance, Attorney at LawWhen it comes to estate planning, our first concern is to organize our estate so we can leave a valuable legacy to our family, friends, and charities. Our second concern is to organize our estate in a cost-effective way. The good news is that both concerns can be addressed by simply preparing five basic estate planning documents. Preparing these documents will save you and your estate a significant amount of money. Initially, the process of developing your estate plan may seem tedious, but the payoff will provide value for you and your family for years to come.
Estate planning is more important than it was a decade ago. You might know that a well-organized estate plan helps your family and friends manage your estate after your death. But what you may not realize is that an effective estate plan can help you while you are alive but disabled. Medical advances may keep you alive longer but often in a mentally or physically disabled condition. Determining who manages your money and health care when you are disabled is critical to your continued happiness and survival.
Signing these five basic estate planning documents ensures that your life and your death will be managed as effectively as possible.
The five basic documents:
- A Financial Power of Attorney allows you to name a person to manage your financial affairs such as paying bills, making bank deposits, and preparing income tax returns if you are disabled.
- A Medical Power of Attorney allows you to name a person who can speak to your health care providers on your behalf when you are disabled. Powers of Attorney are effective only while you are alive. When you die your Powers of Attorney become invalid and your Last Will and Testament is the document which controls the handling of your estate.
- A Will names the person who will manage your estate when you are dead, and allows them to pay your bills, assemble and organize your assets, and distribute your assets to your heirs according to your wishes.
- A Health Care Directive allows you to decide whether you want extraordinary life saving measures taken if you are in a terminal or near-death condition.
- A Disposition of Remains Instructions allows you to name the person you want to make your funeral arrangements and also allows you to describe the funeral arrangements you want.
These five documents remain valid until you change them. They do not automatically expire, and you should review them annually to be sure they say what you want them to say. Keeping your estate planning documents up-to-date is your best means of controlling future legal costs.
Powers of Attorney
Powers of Attorney are the most popular device for managing the affairs of an incapacitated person. Using a Power of Attorney avoids the costs and complexity of a guardianship court proceeding. A Washington Statute, RCW 11.94, governs Powers of Attorney. The two basic types of Powers of Attorney are Financial Powers of Attorney and Medical Powers of Attorney. Often the Powers of Attorney are referred to as "Durable" meaning the documents remain effective even if the person becomes disabled. Powers of Attorney become invalid at death.
A Financial Power of Attorney allows you to name a person or an institution such as a trust company to make financial decisions. The Financial Power of Attorney can become effective either immediately or only when your doctor says you have become disabled or incompetent. If you think someone is abusing a Power of Attorney, the law allows any interested person to ask the Court to hear the complaint. (RCW 11.94.100.)
Washington law automatically gives a limited power to make medical decisions to certain family members without the need for a written document. The better move, however, is to sign a document naming a person who shares your views on health care questions so that you receive the type of care that you want. The Washington State Medical Association web site offers a sample Medical Power of Attorney form and further information.
Last Will and Testament
A Will is a written statement signed by you and two adult witnesses who do not inherit under the Will. Computer-drafted "do-it-yourself" Wills are valid only if printed on paper and signed by you and two adult witnesses. The Will names people or organizations who will inherit your assets after your death. You are free to leave your assets to anyone you choose and you are not required to leave your estate to your spouse or children. If you disinherit your spouse or children, be sure your Will specifically names them and says you wish to leave them nothing. You can also create a future Trust in the Will naming the person who will manage your young children's money, and naming a guardian to care for your young children under the age of 18 years old. The Will can also create a future Trust that becomes effective at the death of the first spouse, which may reduce estate taxes on the death of the second spouse.
Health Care Directives (Living Wills)
Health Care Directives (HCDs), popularly referred to as "Living Wills," describe the end-of-life medical treatment you want. The HCD is created by the Washington Natural Death Act (RCW 70.122).
Disposition of Remains / Burial Instructions
Disposition of Remains Instructions are useful because they clearly outline the funeral and burial arrangements you want, such as a full-body burial or cremation. The form also allows you to choose the person who will manage your funeral and burial arrangements. Leaving burial and funeral instructions is beneficial for your family and loved ones, as the instructions help prevent quarrels regarding your arrangements.
Understanding the significance and value of proper estate planning and educating yourself about the multiple facets of the estate planning process are the first steps in ensuring that your family and loved ones will have a smoother transition in the event that you become disabled or pass away.
Contact me if you have specific questions or would like to schedule an appointment.
» What Estate Planning services do you provide?
» How do I get started with Estate Planning?
» Outline of an Estate Planning Seminar given by Mary Anne Vance, August 2013
Seattle, WA Estate & Trust Lawyers
Mary Anne Vance
Reed Longyear Malnati Corwin & Burnett
801 2nd Avenue, Suite 1415
Seattle, WA 98104
(206) 624-6271
»