A friend recently shared a conversation she had with “Carol,” a long-time acquaintance. They caught up on many topics, but eventually the discussion turned to Carol’s home and family situation. What followed was surprising, though it’s something estate planners see often.
Carol has thought about what should happen to her estate after she dies, but it’s unclear whether she has any formal plan. If documents exist, they are buried in a spare room among boxes of papers and sentimental items. Also in that room sits an old desktop computer, which supposedly contains notes about how Carol wants her belongings divided among her children, nieces, nephews and in-laws. No one knows if the file exists, whether the computer is password-protected or how to access it.
Questions like, Where are Carol’s assets held? Who should be in charge? What bills are outstanding? all remain unanswered. To make matters worse, Carol has deferred maintenance issues with her home, which she plans to leave for her children to handle later.
Estate planners often encounter “Carols” – well-meaning people who postpone difficult decisions until a “rainy day,” only to have tragedy strike before then. Even if a comprehensive estate plan feels overwhelming, taking smaller steps can still make a meaningful difference for their families.
Involve a trusted person. If something happens, family members must quickly determine where assets are held and what bills must be paid. Sharing basic information with a trusted relative or friend – such as what banks you use or where important documents are stored – can be invaluable. In some cases, adding a child or relative as a signer on a bill-paying account may keep obligations current. You don’t need to reveal every PIN or account detail, but providing enough to help is essential.
Put powers of attorney and health care directives in place. Even if you’re not ready for a full trust or will, having a durable power of attorney and advance health care directive is critical. California Probate Code provides default rules for distributing assets after death, but the default rules for incapacity often require conservatorship proceedings – costly and burdensome. There are statutory forms and other resources that make these documents accessible.
Express your healthcare wishes. It’s difficult to discuss medical treatment in the event of incapacity, but sharing your wishes lifts a tremendous burden from loved ones and helps ensure you receive the care you want. Providing your doctors with a copy of your directive is wise.
Address problems now. Delaying tough issues only makes them more complicated and expensive for the next generation. If you can, work with loved ones to resolve problems rather than leaving them behind.
Don’t overlook the small details. Passwords, safe deposit box keys and contact information for advisors may seem trivial, but they can cause major headaches if overlooked.
If you see yourself in Carol – or know someone like her – remember that estate planning doesn’t have to be overwhelming. Even small steps can make an enormous difference.
Send your questions to ccolan@colanlegal.com and use “Alpine Mountaineer estate planning question” as the subject. We’ll answer your questions in our upcoming issues. This article is provided by your local estate planning attorney, Corina Colan. The Law Office of Corina I. Colan / (909) 265-3315 / www.colanlegal.com
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