Four Overlooked Elements in Estate Plans

When creating an estate plan, there are details which seem minor but are actually very important.  It is helpful, when creating an estate plan or reviewing your existing one, to check for these key estate plan elements, says a recent article from mondaq, “Four Provisions People Often Forget To Include In Their Estate Plan.”

Don’t forget to name alternative beneficiaries and fiduciaries. If the estate plan names a beneficiary, but they are unable to take possession of the property, or they are deceased, the asset may go to someone untended, or even as though you have no estate plan at all. In other words, the state will determine who receives the property, which may not be in accordance with your wishes. If there’s an alternate beneficiary, the property will go to someone of your choosing. Back-up fiduciaries (executors, trustees, agents under a power of attorney and so on) are also critical. If your primary choice can’t or won’t serve, someone unintended, or undesirable, may have to do it.

I find in initial consultations this is one of the biggest issues to discuss.  Clients consider their estate plan based upon present circumstances, but real life doesn’t always go the way we expect, so it is important to plan for contingencies.

Personal possessions, including family heirlooms. In the past, many families had items with great sentimental value, whether or not they have any financial value. Although this tends to be less common now, it is important to consider who would get those types of items.  It’s often best to have a personal property memorandum, which our firm routinely creates in our client’s estate plans.  This is a separate document providing details about what items you want to give to family and friends. These work differently in different states, so a local estate planning attorney will know the law for your state and can advise appropriately.  Even if this document is not legally binding, it gives your heirs clear instructions for what you want and may avoid family arguments.

I ask about important, sentimental possession in consultations, and clients often respond by saying these items aren’t financially valuable, as though that means they shouldn’t be consider.  But, these are the items that lead to fights in estates because they have an emotional impact on who receives them, and more significantly, who doesn’t.  I had an estate litigation case years ago that didn’t settle over a $600 wardrobe.  The financial value of planning was proven.

As a final thought, please don’t use the personal property memorandum to make any financial bequests or real estate gifts or use it as use it to try to amend the estate plan.  It never works well, and can break your estate plan.

Digital assets. Much of our lives is now online. However, many people have slowly incorporated digital assets into their estate plans. You’ll want to  consider all online accounts, including email, financial, social media, gaming, shopping, etc. In addition, your fiduciaries will need appropriate access to your phone, accounts and devices. The agent named by your Power of Attorney needs to be given authority to handle online accounts with a specific provision in these documents, which we do. Ensure the information, including the accounts, account number, username, password and other access information, is kept safe, and tell your fiduciaries where it can be found.

This is a growing need in today’s digital society.  So, you can learn more in this article:  https://galligan-law.com/does-your-estate-plan-include-digital-property/

Animals. Today’s pet is a family member but is often left unprotected when its owners die or become incapacitated. Pets cannot inherit property, but you can name a caretaker and set aside funds for maintenance. Many states now permit pet owners to have a pet trust, a legally enforceable trust so the trustee may pay the pet’s caregiver for your pet’s needs, including veterinarian care, training, boarding, food and whatever the pet needs. Creating a document providing details or speaking to the caretaker concerning the pet’s needs, health conditions, habits and quirks is advised. Make sure the person you are naming as a caretaker is able and willing to serve in this capacity, and as always, when naming a person for any role, have at least one backup person named.

Checking for these four key estate plan elements will help ensure your estate plan works as intended and to the benefit of your loved ones.

Reference: mondaq (March 16, 2023) “Four Provisions People Often Forget To Include In Their Estate Plan”

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How Do I Store Estate Planning Documents?

It’s a common series of events: an elderly parent is rushed to the hospital and once children are notified, the frantic search for the estate planning documents starts. It’s easily avoided with planning and communication, according to an article from The News-Enterprise titled “Give thought to storing your estate papers.” However, just because the solution is simple doesn’t mean most people address it.

As a general rule, estate planning documents should be kept together in a fire and waterproof container in a location known to and accessible by fiduciaries, and copies of some documents should be given to the fiduciaries in advance.

Most people think of bank safety deposit boxes for storage. However, it’s not a good location for several reasons. Individuals may not have access to the contents of the safe deposit box unless they are named on the account. Often a court process is necessary for permission to open a safety deposit box if no one is named on the account.

Even with their names on the account, emergencies don’t follow bankers’ hours and access may be difficult. Further, what if the Power of Attorney giving the person the ability to access the safe deposit box is inside the safe deposit box or the principal has died and the Will is in the box.   Bank officials are not likely to be willing to open the box to an unknown person and proof of that person’s authority is in the box.  This is like locking the key in the safe.

Even further, COVID and the economy have led many banks to close or not offer safety deposit boxes.  Banks don’t want to maintain as many brick and mortar locations, so that means safety deposit boxes have to go.

When you store estate planning documents, a well-organized binder of documents in a fire and waterproof container at home makes the most sense.

Certain documents should be given in advance to certain organizations or individuals.  For instance, health care documents, like a Medical Power of Attorney, Directive to Physicians (Living Will) and HIPAA authorizations, may be given to your agents, as well as to your primary care physician or to the medical facility if you go in for a procedure.  This way, agents have the necessary documentation should an emergency occur, and medical systems can add the documents to their file for you.  This way everyone (especially medical providers) are on the same page about your wishes and who will speak on your behalf.

Mary touched on other items that shouldn’t be kept in a safety deposit box in this article.  https://galligan-law.com/things-you-should-not-keep-in-your-safe-deposit-box/  

Financial Powers of Attorney should be given to each financial institution or agency in preparation for use, close in time to when you expect to need it.

This may feel onerous, however, imagine the same hours spent communicating with banks plus the immense stress if the need to use it is time sensitive. Banks often want to review POA’s in advance of their use before accepting them, and that may take several weeks.

If your estate plan includes a trust, you’ll want your trustees’ to have a copy when you are ready to give it to them, and the original can be kept safe with your documents.

Wills are treated differently than POA documents. Wills are usually kept at home and not filed anywhere until after death.

Also, with all documents, especially the Will, it is important to track and keep safe the originals.  You may sometimes be able to probate copies of Wills, but it’s better to keep the original secure and avoid the need to probate a copy.  This is less critical for other documents, but the same policy holds.

Having estate planning documents properly prepared by an experienced estate planning attorney is the first step. Step two is ensuring they are safely and properly stored, so they are ready for use when needed.

Reference: The Times-Enterprise (June 11, 2022) “Give thought to storing your estate papers”

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