When you came in to this world, you came in kicking and screaming, hopefully. You also came in with nothing, not even with any clothes on your back. Now you have a lot more stuff. How do you want to leave this world?
If you are like the majority Americans and Michiganders, you have done no planning. If that is the case, you do not even have a will, let alone any other documents or planning for when you are either mentally disabled or after you are gone. During your mental disability or after your death, this often leaves your loved ones kicking and screaming just trying to figure out what you owned and owed.
You may not care and let your loved ones fend for themselves. However, if you are like most people with whom I discuss estate planning, you do care about your loved ones and want to minimize hassles, minimize taxes and minimize expenses in the event of your mental disability or death.
Remember your last vacation, how much planning and effort it took and the money you spent? Or remember when the kids were little and you wanted to go out just for the evening, all the planning that you did, arranging for a babysitter, leaving detailed instructions and contact information. Think of all the time you spent planning for when you went away for a week or two or maybe even just one evening. Shouldn’t you spend time planning for when you are going away, either mentally or physically, forever.
The starting point for planning is knowing what you own, who you want to benefit, and who you want to take care of you and your stuff. Most of our new estate planning clients, even those with existing estate plans, have never in their lives gathered all that information together in one place before coming into our office. With that information, you have the building blocks to develop a proper estate plan and put the appropriate estate planning documents in place.
With the proper estate plan in place: you are in control of your property while you are alive and well; you and your loved ones are provided for in the event of your mental disability; and when you are gone, you give what you have to whom you want, when you want, the way you want; all at the lowest overall cost to you and those you love.
The minimum estate planning documents you should have in place are financial and health care powers of attorney and a will. You may also benefit from having a trust.
During your lifetime, your financial power of attorney allows your designated representative to handle your financial affairs in the event of your mental disability without the necessity of a court appointed conservator, in most cases. Similarly, your health care power of attorney allows your designated representative to make medical and mental health care decisions in the event of your mental disability without the necessity of a court appointed guardian, in most cases.
Your will provides instructions for the distribution of your property and other stuff when you are gone. In order for your will to work, however, it must go through the probate court process. A trust is kind of like a combination of a financial power of attorney and a will. Your designated agent can manage your trust property for you during your lifetime and then for your loved ones after you are gone.
These documents really should be just the starting point of making a graceful exit. If you truly want to make it easier for your family, there is a lot more that you could do. If you have a trust, it should be fully-funded. Trust funding is completely and correctly designating your trust and individuals as owners, beneficiaries and insured parties of your assets. Basically, it’s putting your stuff in your trust.
The proper funding of your trust is critical in making your estate plan work and having the results you intend. Failure to properly fund your trusts may cause unintended results. These may include probate during your lifetime or after death; distributions not in accordance with your goals and objectives; additional taxes; and additional administrative, legal and other expenses.
To help your successor financial and health care agents, make your medical directives and other estate planning documents immediately accessible 24 hours a day/7 days a week/365 days a year. Regularly speak with your successor financial and health care agents. You want to make sure not only that they are still willing to handle your finances or medical directives when you cannot, but also where they can find your financial and health care powers of attorney, trust and financial records and information. Provide them with access to your online user names and passwords.
The more information your financial and health care agents have now, when you are alive and well, means the less information they will have to search for when you are not so well, or after your death. Discuss with your successor financial and health care agents what their duties will entail and what is expected of them.
Do you have any particular wants regarding your funeral or what happens to your remains? In Michigan, you can appoint a funeral representative, who has full authority over your funeral and what happens to your remains after you are gone. If you have any specific wishes, then you should set them up ahead of time, and let your funeral representative know.
One way you can do that is with a pre-paid funeral. When you set up your pre-paid funeral you can be specific about what you want to happen, such as visitations, viewing and the funeral service itself. You could buy your casket, burial plots and monument. If you want to be cremated you can buy your niche and urn. If you spend time in another state such as winters in Florida or Arizona, you can buy special travel insurance that would finance the return of your remains home.
To make it easier for your loved ones when they are going through the grieving process with all the emotions associated therewith, you could write your own obituary and plan your own funeral service. By writing your own obituary, you decide how you want to be remembered. This takes the burden off of your loved ones during their grief and it also decreases the chance of errors being made.
Write down any specific wishes you have for your funeral service. I’ve known people who have written out their entire funeral or memorial service, detailing the readings, readers, number of verses of which songs and even designating the vocal soloist for certain songs. I attended one funeral in which the deceased was an accomplished singer and through a recording, he sang at his own funeral. Because I have done a bit of singing myself, I have been asked by friends and acquaintances to sing at their funeral, when the time comes.
You came into this world kicking and screaming. After a fulfilling life, wouldn’t it be nice not to leave this world the same way, but to make a graceful exit? Shouldn’t you spend at least as much time planning for when you are going away, either mentally or physically, forever, that you spent planning going away for your last vacation or for your last date-night?
By Matthew M. Wallace, CPA, JD
Published edited December 2, 2018 in The Times Herald newspaper Port Huron, Michigan as: How to make a graceful exit