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Planning Ahead For Key Legal Issues

John Lennon once wrote: “Life is what happens when you are busy making other plans.” This is a profound thought and it certainly applies to the areas of estate planning, unexpected death, a life-altering accident, unanticipated sickness, home care and assisted living.

Regrettably, this lyric applies to Prince, the mega music star who recently died unexpectedly at the age of 57. According to news reports his estate is valued at about $300 million or more but he had no will or trust. He has one full sister who opened a probate. Prince had five half siblings who will also file claims. Others may come forward who can prove a genetic link. Since the absence of an estate plan suggests little or no tax planning, Uncle Sam will likely be heavily involved. Some news reports hinted that Prince had a mental block about estate planning and was worried he would be taken advantage of. As a result, however, his sizable estate, which includes copyrights and sizable future earnings, is likely to drag on and be contentious. This is probably not the scenario this gifted artist would have wanted.

It is a cliché but it is never too early to think about the future and to put plans into place. It is crucial that people start thinking of a blueprint for life events such as sickness, death, long term care, finances, inheritance and the myriad of other circumstances that are part of the human condition. As can be seen from daily newspaper headlines, unforeseen episodes strike everyday at random.

Central to this thought process also is that what you think may happen to you and your estate after you pass away may actually never happen unless you create the master plan you want.

As any experienced estate planning attorney will attest to, unexpected life events can create enormous stresses and strains inside a family. When a parent gets sick or has dementia, siblings will argue about care giving options. When a parent dies unexpectedly, other family members can show their dark side as old resentments appear, or when a young couple unexpectedly dies their children’s guardian and financial issues can explode along family lines.

The human issues related to the above are enormous. The legal issues are as well.

It is estimated that only 30%-40% of people in the United States have created some kind of estate plan. Increasingly, we live in a culture that stresses youth and beauty and never aging. We read headlines such as “70 is the new 50.” None of us, however, can elude the inevitable even though more of us seem to be putting this effort off into the future. The time for action is now.

At a minimum, here are some of the key issues that may present themselves in the future and what you can do about them ahead of time by putting legal guidelines in place with the assistance of an experienced estate-planning attorney.

Power of Attorney for Finances: This document will provide for a trusted agent (spouse, child, etc.) to pay bills and manage your money in case you are not in a position to do that yourself. You may have been in an accident or have had a stroke. You can resume your financial affairs as soon as you are able.

Advance Health Care Directive. Also known as a Power of Attorney for Health Care, this document also puts a trusted agent in place (spouse, child, etc.) to make health care decisions for you in case you can no longer do it yourself. Again, you can resume your own health care management as soon as you are able.

Will. A will disposes of your estate. One key aspect of a will is that you can appoint a guardian for your minor children should you and your spouse suddenly die. That way there is no dispute as to your children’s upbringing.

Trust. A trust creates a management plan for your property and assets while you are alive and dictates a distribution plan for the same when you die. A key advantage to a trust is that it avoids probate and provides for the smooth inheritance of your estate. Anyone owning any real estate in California would benefit from a trust.

Long Term Care Insurance. This and other financial planning strategies for elders creates an action plan for when the time comes.

When it comes to planning for the future and avoiding unwanted legal headaches, it would be wise to consult an experienced estate planning attorney to take stock of your own situation and begin forming plans.

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