What Documents Should Be In My Estate Plan?

Some people believe that a thorough estate plan consists of no more than a properly executed Last Will & Testament. While it is crucial to have a Will, a truly comprehensive estate plan consists of much more, and provides guidance and protection for your loved ones both while you’re alive and for after you have passed on.

A Will not only provides instructions for what should be done with your assets after death, but it can also appoint a guardian for your children should something happen to you (and/or your spouse) and your children are not yet of age. A Will can also be used to establish a trust to protect your estate from taxes, or to provide for a beneficiary who has special needs.

However, a Will is not the only method to make a bequest. In fact, many estate assets don’t pass according to the terms of a Will, and instead flow to beneficiaries according to the “beneficiary designations” made on specific financial accounts. It is very important to be aware of what the beneficiary designations say on your accounts (checking account, retirement fund, etc.) not only to provide clarity and avoid confusion, but also to keep clear of possible negative tax consequences.

A Will and beneficiary designations constitute your estate plan for after you’re gone, but what documents can be utilized while you’re still alive?

A power of attorney is a document that authorizes somebody else to take actions or make decisions on your behalf if you are unable to do so on your own. The authority granted in a power of attorney can be very broad or very limited depending on what your preference is. Powers of attorney can cover virtually any subject, but the most common ones deal with financial matters and health care decisions. A power of attorney is used while you are alive, but have become incapacitated, unavailable, or otherwise indisposed so that you cannot handle your affairs yourself.

A health care directive can be employed near the end of your life, and direct your physicians to provide or not provide end-of-life care. A basic health care directive is triggered when you have been diagnosed with a terminal condition from which you will not recover. A more complicated health care directive can be applied in other types of situations such as if you have Parkinson’s disease, or no longer recognize your family, or cannot feed yourself. Other advance health care directives can be put in place to cover non-end-of-life situations and provide care instructions in the event, for example, you have a serious mental health episode, or if you fall into a coma.

Finally, a good estate plan should include directions regarding the disposition of remains. Leaving instructions on what you want done with your body after you pass will help toward your wishes being carried out, and will take the burden off of your family to make the decision of what to do with your remains.

Estate planning documents are highly customizable, so no matter what your asset level or your family structure, with the help of a knowledgeable attorney you can craft an estate plan that protects you and your family, lets your wishes be known if you cannot speak for yourself, and creates a specific legacy for future generations.

Sean Siska

June 8, 2019

The article provided above is for general information purposes only and should not be relied on as specific legal advice. This article does not form an attorney-client relationship. If you have any questions about this article, please feel free to contact Sean Siska at sean@siskalaw.com

The Perils of Legal Zoom

You’ve probably seen the ads. Legal Zoom and other companies of its ilk offering to provide one-size-fits-all legal papers – such as a Will or a durable power of attorney – for which all you have to do is fill in a few blanks with some names, and voila you have an airtight legal estate plan. The sales pitch promises to make things very simple saving you aggravation, time and, most importantly of all, money.

It can be a compelling sales pitch. Why go to a lawyer’s office when you can just type in your credit card number and download some forms online? It’s an easier and cheaper alternative. Besides, don’t attorneys use boilerplate in their documents, language that is the same in all of the paperwork that they create for their clients?

While it is true that most lawyers rely on what could be called cookie cutter provisions for the legal documents that they provide for their clients, any practitioner worth their salt will tell you that none of their clients fits entirely into a cookie cutter mold. This means that a decent attorney will produce documents for their clients that don’t wholly conform to a pre-existing mold, and will instead be customized to meet a client’s specific needs and desires.

A pre-written form may address some of the needs for a specific client, but other important aspects of that same client’s estate plan may not be covered by one-size-fits-all documents. And even worse, a client who relies on generic forms may not recognize that those needs are not provided for by the pre-fab paperwork. The client would only know if an honest-to-goodness, in-the-flesh attorney explained the deficiencies about those fill-in-the-blank Wills and powers of attorney.

And those deficiencies can be devastating.

Among the many things that could go wrong when using an off-the-shelf, uncustomized estate planning form are:

(1) crucial needs and desires going unmet,

(2) a principal (i.e., the person signing the document) not comprehending the terms of the document, or

(3) a fiduciary (i.e., the person acting on behalf of the principal) not understanding what he or she is allowed to do under the document.

For example, someone could sign a “springing” power of attorney, which means that it is to be effective only when the principal is declared incapacitated by a doctor. However, this requirement might not be clear to the principal and the fiduciary (say, the principal’s child), and the fiduciary could start acting on behalf of the principal while the principal still maintains capacity.

Furthermore, assume that the principal eventually loses capacity, and that the fiduciary still doesn’t know to go to a doctor to obtain the confirmation that the principal now lacks sufficient capacity to make decisions. Banks would refuse to deal with the fiduciary. Worse, the fiduciary could be found to have breached the duties and responsibilities required by a power of attorney.

It would take several months and many thousands of dollars in legal fees to sort out a problem that could have been avoided if the principal had consulted with a lawyer in the first place.

Another problem could be a principal signing a power of attorney that gives the fiduciary far broader powers than the principal would have otherwise wanted.

In this scenario, a fiduciary would be able to do whatever he or she thought was in the best interest of the principal’s estate, no matter what that action was. This could be beneficial in some cases, but it is not beneficial for all cases.

If the fiduciary was not as prudent or responsible as they should be, the fiduciary could end up using their unfettered power to take an action that they think will aid the principal (like, for example, a risky but possibly lucrative investment), but concludes with the loss a significant portion of the principal’s estate.

If a principal trusts a fiduciary to handle matter only to a certain extent, then the principal’s estate planning documents should reflect that opinion. An attorney can explain what kinds of authority can be granted to a fiduciary, and thus avoid the problem of a well-meaning but reckless fiduciary wielding too much power.

Hiring a flesh-and-blood lawyer can ensure you the opportunity to explain your needs and desires to an experienced professional who can in turn advise you and explain legal terms in a way that an online FAQ cannot.

Filling in the blanks on a webform is not as effective as executing legal documents drafted by a professional attorney who is dedicated to providing you with the groundwork for an estate plan that addresses your specific goals.

Furthermore, an invested lawyer will be able to craft documents that can minimize confusion or potential familial conflicts in a way that pre-fabricated forms cannot do.

If a situation arises that an off-the-shelf legal document does not anticipate, it can cost families tens or even hundreds of thousands of dollars in legal fees. An experienced attorney can craft provisions to prevent such events. Additionally, local laws change all the time. Decent lawyers keep up with those changes. National websites providing legal services may not.

In the long run, utilizing an attorney who can draft documents that service your distinct requirements can save you much more money and heartache than using a generic internet service that purports to meet the needs of any anonymous user who clicks on a commercial website.

Most reputable lawyers charge flat fees for generating estate planning documents, so you should know exactly what you are getting in for at the outset, and you can accurately compare prices with services that offer fill-in-the-blank forms.

All of that being said, for some people one-size-fits-all estate planning documents can work just fine. But you probably won’t know that until you speak with an attorney.

Sean Siska

May 14, 2019

What We Can Learn From Game of Thrones About Estate Planning

Season 7 of HBO’s giant fantasy hit Game of Thrones featured a storyline that irked many viewers. In the show, two sisters from the protagonist Stark family, Sansa and Arya, who have not seen each other since the end of season 1, are finally reunited at their ancestral castle Winterfell. The reunion, however, does not go smoothly.

The Stark sisters disagree about how their kingdom should be run, and soon begin scheming against one another, spying on each other, even breaking into the other’s private quarters to search for their most closely guarded secrets.

All the while, villainous court adviser Littlefinger, who wants to assume power himself, takes advantage of the Starks sisters’ increasingly strained relationship to maneuver himself ever closer to the throne.

Fans of the show were confused and appalled. “How could Sansa and Arya be so suspicious of each other, treat each other in such underhanded ways, and not simply get along? They’re family!”

To which I would reply, “Of course there’s conflict between Sansa and Arya. They’re family!”

Keeping this sentiment in mind can be useful in the realms of estate planning and probate law.

It is not uncommon for long simmering tensions between siblings or other family members to erupt after a parent dies, and it is time for that parent’s estate to be probated. This can be true even for families who by all outward appearances get along totally fine.

Nascent disagreements can grow into even bigger clashes when blended families are involved and step-siblings have to make high pressure decisions about how an estate should be administrated.

The question for the forward-looking parent then becomes, “What to do about it?” Careful, well-considered estate planning can help.

Appointing an appropriate personal representative can be key.

A personal representative is the person or entity responsible for administrating your estate after you pass away, for making sure creditors are notified and in appropriate cases paid, and for ensuring your assets flow to your heirs as you intended.

Most often, people will appoint their spouse to be the personal representative of their estate. If their spouse has passed away or if they aren’t married, then they will frequently select a child, sibling, or even a close friend to serve as personal representative.

However, that’s not always the wisest choice.

The sibling or close friend may not possess the skills or temperament to successfully administer one’s estate. And in the case of appointing a child to be personal representative, not only do those same risks exist, things can go seriously sideways if the kind of familial discord displayed in Game of Thrones exists among a decedent’s children.

How can that discord present itself?

A personal representative angry at his siblings could refuse to distribute the assets out of the estate. Or the personal representative could transfer ownership of a vacation house to himself alone, instead of to himself and his two siblings in equal as his deceased parent wished.

Entangling such a mess would take months of costly litigation, the vacation house would likely end up getting sold, and most of the sales proceeds going to pay legal fees rather than staying in the family.

Another potential conflict with real estate could involve an unscrupulous personal representative selling a worn down family home to a flipper at a bargain basement rate at the expense of the other siblings in order to get a cut of the profits after the flipper fixes up the property and sells it at fair market value.

Parents drafting estate planning documents are naturally drawn to appointing their most successful or capable child to serve as personal representatives, but this is something that should be thought through. Envy and resentment of the successful sibling can bubble up and poison the entire probate.

And those resentments can run deep.

It should not surprise anyone to read about a contested probate case that took over six years to resolve and nearly three-quarters of a million dollars in legal fees boiled down to, in part, a grudge one of the siblings had been holding about being made fun of at a slumber party when the heirs were all still children.

The kind of family squabbles as seen in Game of Thrones happen all the time in real life.

Is there a foolproof way to craft an estate plan that would avoid the messy and complicated scenarios described above? No, of course not. But there are ways to help prevent sibling rivalries from exploding into costly and time-consuming probate litigation.

One’s Will could appoint a neutral professional fiduciary instead of a child as personal representative. A well-qualified professional fiduciary can make fair, dispassionate decisions regarding the administration of an estate, free from the emotional entanglements that can exist among sparring family members.

Another option is to sign a Will that makes explicit instructions that cannot be misinterpreted or ignored on how assets should be distributed and how an estate should be administered.

A person executing a Will can discourage children from starting fights by including language in the Will which provides that any person who contests the validity of the Will, or challenges the administration of the estate will forfeit his or her inheritance.

Although in Washington it is common practice for Wills to allow a personal representative to administer an estate without the involvement of the courts, a Will could always explicitly call for the intervention of the court so that the administration is monitored by a judicial officer who will sign off on all estate activity with the full force of the law.

Finally, if a person suspects that a particular child will act in bad faith or sow disharmony after the parent has died, a Will could be drafted that prohibits the child from having anything to do with the administration of the estate, or that could disinherit the child entirely. Some parents are reluctant to resort to such strong measures for fear of causing discord while still living. However, any such troublesome child is not entitled to see the contents of a parent’s Will until after that parent has passed away.

These are the most common options available to people hoping to pass on a legacy while also trying to avoid potential familial conflict, but there many other actions and strategies available as well. People contemplating their estate plans should consult with their attorney to discuss the particular circumstances of their own situations, and determine what kind of planning will best meet their goals.

If the contentious dynamic on display between the Stark sisters seems all too familiar, if you wonder if this kind of chronic conflict exists between your own children, or if you just want to theorize about how Game of Thrones is going to end, feel free to contact us here.

Sean Siska

April 25, 2019