Estate Planning: Why Do I Need a Will?

By Elyse M. Smith, Esq.

Everyone needs an estate plan. Certainly, not everyone needs the complicated tax sheltering vehicles some have, but everyone needs these basic estate planning documents: (1) a will; (2) a power of attorney; and (3) an advance medical directive (“living will”). Too often, people dismiss estate planning as something only millionaires need or as something they will deal with later. But the fact is that these documents are helpful for everyone, and you can’t put them off them forever.

There are many reasons why estate planning, and specifically having a will, is important for everyone. First, if you die without a will, your estate is distributed under state “intestate succession laws.” While intestate succession laws generally pass property to close family members, a will can be more nuanced, better reflect your wishes, and reduce family conflict. In addition to distributing property, a will also names an executor for your estate, guardian(s) for your children, and creates trusts for children and other young beneficiaries if needed. When drafting a will, you must adhere to a number of legal requirements. Otherwise, there may be confusion and difficulty when executing the will. Hiring an experienced estate planning attorney to help you through the process can eliminate that issue.

An aspect of estate planning that is often overlooked is creating a power of attorney. A power of attorney is a document that gives authority to someone you trust to make decisions, usually financial or health care related decisions, on your behalf while you are living. Whereas a will does not come into effect until your passing, a power of attorney is used while you are alive but unable to make decisions for yourself. You can have one document granting decision-making authority over all matters to a person, or you can have different documents granting specific authority to a person or persons. For the purposes of this article, we’ll imagine two separate powers of attorney: one for financial and other matters, and one for health care decisions.

With a general power of attorney, your “agent” or “attorney in fact” can handle all kinds of matters, provided you have granted him or her the authority to do so in the power of attorney document. For example, your agent can manage your bank and investment accounts, transfer funds, and insurance premiums. A general power of attorney can be used in many different situations. For example, when you’re traveling overseas for an extended period of time or suffering from an illness and undergoing treatment that prevents you from attending to your finances or other matters, your agent is able to manage your accounts if necessary.

One of the most important elements of any power of attorney is the “durability” clause, which states that the document continues in effect even if you (the person who signed the POA) become incapacitated. Without this clause, the power of attorney becomes void if you are afflicted with dementia, Alzheimer’s, or are otherwise rendered legally incompetent, which is exactly the time when you would need a power of attorney. Without a durability clause, your agent would have to obtain a court order to be able to make decisions on your behalf. Avoid the hassle and cost of a court hearing and get a sound document in the first place. Too often, the documents offered online at popular legal websites are deficient in this and other important ways. These “one size fits all” documents may be cheap on the front end, but you get what you pay for. They will all too often miss out on important protections that cost you down the road.

A healthcare power of attorney is a document that names someone you trust to make health care decisions on your behalf when you are unable to do so. Whereas general powers of attorney are often effective at the time you sign them (meaning your agent can act on your behalf once you’ve signed the document), health care powers of attorney typically do not come into effect unless you become unable to make decisions on your own behalf, for example, due to dementia or a coma. In a health care power of attorney, you designate what powers your agent will have and what kinds of decision he or she may make on your behalf.

Often combined with a health care power of attorney is an advance medical directive, a document that expresses what medical treatments you wish or do not wish to receive, particularly when suffering from a terminal condition. An advance medical directive is often called a “living will,” and it is an important element of your estate plan. This is because it provides guidance to your loved ones and decision makers as to what decision you would want them to make in very difficult and heart-wrenching situations.

From both a secular and Christian perspective, estate planning is a necessary protection for everyone. Estate planning brings peace of mind knowing that you’ve planned ahead for the good of your loved ones.

From a Christian perspective, the Bible calls us to be good stewards of that which belongs to us. Peter calls for us to be faithful stewards (1 Peter 4:10), while Luke asks “if you have not been trustworthy in handling worldly wealth, who will trust you with true riches?” (Luke 16:11). In addition to estate planning being good stewardship, it is also a tangible way to love and care for your family as Timothy exhorts in1 Timothy 5:8. Finally, estate planning is an acknowledgement of our mortality and a way to face that mortality head-on. Isaiah’s first words of advice to Hezekiah when he became ill were to “Put your house in order” (2 Kings 20:1) and Psalm 90:12 asks God to “Teach us to number our days, that we may gain a heart of wisdom.”

Disclaimer: This memorandum is provided for general information purposes only and is not a substitute for legal advice particular to your situation. No recipients of this memo should act or refrain from acting solely on the basis of this memorandum without seeking professional legal counsel. Simms Showers LLP expressly disclaims all liability relating to actions taken or not taken based solely on the content of this memorandum.  Please contact Elyse Smith at ems@simmsshowerslaw.com  for legal advice that will meet your specific needs.