Estate planning is important for many reasons, and contrary to some beliefs, it is not just for “rich folks” but rather important for everyone. The goal of proper estate planning is to provide you with peace of mind that your wishes will be honored. Your estate plan should not be comprised of a generic form that you pulled off of the internet, but, instead, should be specifically tailored to your circumstances. After all, what is right for some is not right for all. Estate planning can consist of wills, trusts, business entities, lifetime gifts, advance medical directives, and any number of other documents. Another benefit of a proper estate plan could be tax savings. This post will address three of the most common estate planning documents and their application to the majority of people.
I. LAST WILL AND TESTAMENT:
Anyone who is of age and has people and property that they care about needs a Last Will and Testament (“Will”). It is a must. This particularly true for married couples with minor children. The law allows parents to appoint the person who will have custody of their minor children at their death. Doing so avoids the prospect of an ugly battle among the grandparents or other family members with regard to who will have custody, and, instead, allows the parents to be in control of that important decision. Moreover, a Will is important so that your surviving spouse actually receives the assets of your estate. It is commonly thought that the estate automatically goes to your surviving spouse on your death. This is simply not true. In the absence of a Will, the law states that your estate is divided ½ to your surviving spouse and ½ to your children. This leads to not only to a loss of control by the surviving spouse over the assets of your estate, but it also invites unnecessary expense, litigation, and the intrusion of a probate judge into your affairs. In short, a Last Will and Testament allows you to control the disposition of your estate.
That said, there are many things that can go wrong in your estate plan if it is not done correctly. There could be significant estate tax consequences which affect your estate plan. There are also certain assets that will be controlled by your will and there are others which will not. It is important that you have an experienced estate planning attorney guide you through the process so as to avoid Uncle Sam dipping into your pockets, or the pockets of your heirs, any more than is necessary.
II. POWER OF ATTORNEY
Another common estate planning tool is the Durable Power of Attorney. A power of attorney is “durable” only if it is drafted in compliance with South Carolina law and is intended to survive your later mental incompetence or physical disability. Such a power of attorney may provide your spouse, child or friend the authority to make decisions dealing with both your financial affairs and healthcare. It is an unfortunate reality that everyone reading this post will experience a time in their lives when decisions need to be made but they will not be able to make them for one reason or another. Hopefully, this occurs at the very end-stages of life, but it is most certainly a fact of life. In the absence of a Power of Attorney in South Carolina, your family must file petitions with the Probate Court seeking a finding that your are “incapacitated” before they can obtain the legal authority to act on your behalf. The Probate Court proceedings are less than ideal for many reasons. First, it is expensive because it is time consuming for everyone involved: you, the court, your attorney, and your doctors. Moreover, it is litigation, which, therefore, introduces the potential of a legal fight among your family regarding who is going to be given the authority to make decisions for you. Ultimately, it will be a probate judge, who you likely do not know, deciding weather and by whom any given decision is made. It is, therefore, very important that you you have an experienced estate planning attorney draft your Durable Power of Attorney in a manner that allows you to choose your representative in a cost efficient manner.
III. DECLARATION OF DESIRE FOR NATURAL DEATH (a/k/a “LIVING WILL”)
Finally, if you are sure that you would not want life support procedures or machinery used to prolong your death, you should have those wishes documented in the proper manner. In South Carolina, the document is entitled a “Declaration for Desire of Natural Death”. This is euphemistically called a “Living Will”. This document merely states that in the event two of your physicians (one being your treating or attending physician) certify in writing that the only purpose of giving you life support is to prolong your dying, then you direct that all life support be withheld or withdrawn. In other words, a “Living Will” provides you with the opportunity to decide how you live your last days, not physicians or courts. While South Carolina law states that your wishes expressed in this document can be legally enforced by taking the matter to court, the practical effect of the document most commonly experienced is that it takes the awful decision of whether and when to cease life support away from the family, removes any guilt associated with that decision and allows your family to know that doing so is exactly what you would have wanted.
You buy piece of mind with a properly executed estate plan. There are many pieces to the estate planning puzzle. You should only let an experienced estate planning attorney help you execute a plan that will, in the end, save you and your family money, give you piece of mind and help your family make decisions for you. Your love ones are worth it.