Why do we tend to procrastinate when it comes to estate planning? The answer may be deeper than you think. On the surface it appears to be a conversation about money; in reality, it’s a conversation about death. And we’re not talking about dying in general, but about our own death, and that of our spouse. No wonder the process tends to be fraught with emotion. That said, like most of the difficult things we endure in our lives, it has great potential for enhancing growth and intimacy in your marriage. More about that later; but let’s start with first things first.
When is it necessary to create an estate plan? At a very minimum, everyone over the age of eighteen should have an Advanced Health Care Directive and a Durable Power of Attorney. These documents are not about the distribution of assets, but are about incapacity. In the tragic event that you are no longer able to give informed consent to health care decisions, the AHCD designates who will be making those decisions for you. It will also lay out the specific decisions they are authorized to make, which include decisions about life-sustaining treatments in the event of brain death, as well as decisions about anatomical gifts. A Durable Power of Attorney does much the same thing, but in reference to financial decisions. Both of these documents are required in addition to, not instead of, a will or a trust. The good news is it is not necessary to use an attorney to put these documents in place. There are simple templates available, which you can fill out and have notarized by a Notary of the Public.
According to attorney Bonnie Bishop, a certified specialist in estate planning, there are three criteria, any one of which makes it advisable to have a formal estate plan in place:
1) You have children; 2) You own a home; or, 3) You own assets in excess of $100,000. Once you have reached that threshold, she would recommend a revocable trust over a simple will, but also notes that it’s better to have something, rather than nothing. Your attorney will advise you based on the type and desired succession plan for your assets. Ms. Bishop also stresses the importance of doing your estate plan at a time when you are comfortable making decisions about yourself, your spouse and your children. She has noticed that the older we get, the more difficult those types of decisions can be. It’s not about cognitive deficiencies; it’s just that death is more real and a lot closer to hand. The process can be scarier and can affect our ability to make solid financial decisions.
Finding an estate planning attorney is relatively simple. The State Bar maintains a list of those who have taken the additional training required to be a certified specialist in this field. Once you link to the website, select the specialty Estate Planning, Trust & Probate Law and input your county from the drop down list; that will put you in touch with someone close to your home. Another great place to find referrals is from your accountant, financial planner, or friends and family members. If they’ve been happy with their experience, chances are good that you will be too. (For free or low-cost legal advice regarding your estate, contact LawHelp.org.) Regardless of how you find your attorney, do not hesitate to interview more than one, as it is essential that you find someone with whom you are comfortable. The process is a surprisingly intimate one, so you want to navigate it with someone you trust and respect.
Speaking of intimacy, one of the factors which makes this process such a difficult one, is that it can change the relationship dynamics between couples in unexpected ways. It is not uncommon for power roles to shift, as couples become equally informed of their property rights. I use the example of one husband in a nuclear family with two children, who had always controlled all the finances; he had left his wife’s name off of important documents, like the deed to the house. As the breadwinner, he really hadn’t bought in to the concept of community property, and was operating essentially as though everything belonged to him. Too often, we women are willing partners in this type of deception, abdicating both our authority and our responsibility to be present in our financial lives. In a situation like this, the wife found that she had more rights, and the husband found that he had fewer. As this power shift emerges, it becomes readily apparent that cooperation from both sides is necessary to moving forward with the process. The husband had to come to a place where he was willing to let his wife in the financial house. Be aware that these types of dynamics may be present, and be prepared to address them.
And finally, I will share one more piece of advice from Ms. Bishop to blended families embarking on the estate planning adventure. Since one or both of the partners have been married before, they have been through a divorce. Though we may not always look at it in this way, there has been a death in the family—the death of a marriage. Regardless of whose idea it was, or how miserable they may have been, victims of divorce experience a profound sense of loss. In addition, they have recently been through the experience of dividing assets, and usually it hasn’t gone as well as they had hoped. Feelings around this experience will affect the estate planning process. Once again, be aware that this may be an issue for you. I encourage you to talk through these feelings with your spouse; make every effort to listen and validate the feelings, while preventing them from getting in the way of a better and healthier financial future for you and those you love.