Quick Q&A - Feedback From an Experienced Illinois Estate Planning Attorney:
EPM does not endorse, promote, or advertise for any law firm or attorney. We do accept certain attorney-written submissions for publication as educational materials. The following was prepared by a volunteer attorney, Kelly Frame, partner at Frame, Wills, Zeller & Green, LLC, in relation to some of the most common estate planning questions he has encountered over 15 years of practice.
Should Single Individuals Have An Estate Plan?
The short answer to this question is, absolutely! Every adult, regardless of income or net worth, should have a properly drafted estate plan to include, at a minimum: a last will and testament, durable power of attorney, health care power of attorney, and a living will. For those individuals seeking to avoid probate and would like increased privacy in connection with his or her estate, a revocable living trust is also highly recommended.
Estate Planning, Why Should I Do It?
Engaging an experienced estate planning attorney to create an estate plan is not only for your own peace of mind, it’s for your loved ones. We often hear individual clients say that they don’t need any estate planning because their estate doesn’t have much value or they don’t have many significant assets to transfer to his or her beneficiaries. Generally speaking, this statement is often not true. An individual should include in his or her estate any privately owned life insurance, employer-provided life insurance, other employer-provided benefits, pensions, business interests, IRA’s, annuities, and other assets to which a person’s beneficiaries and loved ones might become entitled.
There may be many reasons why a person does not create or revisit his or her estate plan, such as having a busy schedule, being short on money, or not knowing what professionals to engage. A poorly planned estate often results in excessive administrative costs, needless taxes, losses, and frustrated and hurt loved ones.
What Estate Planning Documents Do I Need?
The simple answer is that every adult should have the following properly prepared and executed estate planning instruments: A last will and testament (or simple will), possibly a revocable living trust, a durable power of attorney, a health care power of attorney, and a living will. These estate planning instruments, at a minimum, are used to carry out a practical, effective estate plan for most people.
What Are Each of The Primary Estate Planning Documents?
1. Revocable Living Trust
A revocable living trust is a probate avoidance tool for both death-related and disability-related probate. The revocable nature of a living trust means that a person can change it at any time during his or her life. A revocable living trust creates a relationship of current or future authority in another person (a "trustee") over the trust property, which provides probate avoidance mechanisms in the event of such person’s disability or death; acts as the main document for disposing of a person’s estate (this is the receptacle for the will and other "pourover" assets); and provides for long-term administration of a person’s estate for the benefit of his or her family and other beneficiaries
2. Last Will & Testament
The last will and testament is a written instrument that directs a personal representative to dispose of the person’s assets (also known as probate assets) in accordance that person’s directives set forth in his or her will. A last will and testament may also name previously selected guardians (including successors, alternatives) for that person’s minor children. A person’s probate assets are those assets that are owned at death and do not pass to someone else under the terms of a contract that was into prior to death, such as a life insurance policy. Examples of probate assets may include real estate, bank accounts, business interests, cars, boats, artwork, and other assets that are not transferred by contract.
3. Durable Power of Attorney
The Durable Power of Attorney is a legal instrument which formally appoints an agent (called an attorney-in-fact) to conduct a person’s financial or business affairs in the event such person becomes disabled or incapacitated. What makes a Power of Attorney Durable is the language in the document that provides that the Power of Attorney will remain in effect even if such person becomes disabled or incapacitated. Thus, if a person becomes disabled or incapacitated for a short or long period of time (or, for example you are out of the country at the very time a business-related document needs to be signed), someone will have the power and authority to act pursuant to the written directives incorporated in the durable power of attorney. This legal instrument may be a very broad, all-inclusive power, or it may be limited to certain business affairs.
4. Health Care Power of Attorney
The Health Care Power of Attorney is a legal instrument which formally appoints an agent to make health-care decisions on behalf of a person that lacks (again, this could be short-term or long-term) the capacity to make those significant decisions. A healthcare power of attorney can either expand or limit power to make decisions on a person’s behalf, provide for disposition of bodily remains, and set standards for life support.
5. Living Will
The Living Will declares to a person’s healthcare providers that he or she does not want death-delaying medical procedures used to artificially prolong his or her life in the event a physician has certified that such person has an incurable and irreversible terminal condition, that death is imminent except for death-delaying procedures, and that the person is unable to make his or her own healthcare decisions. Some states also prescribe that artificial administration of hydration and nutrition should be continued unless such person has otherwise expressed intentions by clear and convincing evidence.
Plan, Protect and Preserve
What makes estate planning simpler, and hopefully more attractive for you, is being able to either (i) spend the time to learn and utilize the many free educational resources provided by ministries and organizations such as EPM; or (ii) sit down with an estate planning attorney to determine what instruments are best suited for your needs and the needs of your family.
You must take an active role in your estate planning. I would consider it a moral duty. Remember, it’s your assets that you want to preserve and protect during a period when you might be incapacitated, or pass on to your family (if that is the plan) in a fashion that saves taxes, if appropriate, and makes sense for your particular family situation. There is no good reason for putting off estate planning, even for single individuals with no children. If you have estate planning needs, which everyone does, and you need these instruments put in place, it’s not too late. So be proactive and begin right away.
FN - This guest post was authored by Kelly Frame, of Frame, Wills, Zeller & Green, LLC. This article is not intended to constitute legal advice and does not create an attorney-client relationship. While the estate planning attorneys at Frame Wills, Zeller, & Green, LLC are experienced in every aspect of estate planning, including wills and trusts, asset protection, and probate and trust administration, and has attorneys licensed in Illinois, Georgia, and South Carolina, this article is not comprehensive and all estate plans and planning needs are different. This post is not intended to be legal advertising. It is provided for information purposes only.
Additional information from Frame, Wills, Zeller & Green, LLC.
Disclaimer - This article is provided for educational purposes only. Nothing contained herein should be considered "legal advice", and this information should not be relied upon by any reader as such. The information presented herein is not necessarily presented based upon the laws within any specific state, and such laws vary from state to state. The provision of this discussion shall not be deemed to create an attorney-client relationship between the reader and EPM and/or any other third party. This discussion was not provided as a "legal advertisement" and the readers have no duty or obligation to provide any compensation for the information provided herein. The determination of the need for legal services and the choice of a lawyer are extremely important decisions that should not be based solely upon advertisements, endorsements, or self-proclaimed expertise.