Planning for the future of your loved ones and the disbursement of your estate can be challenging for many reasons. But, you're not alone. Here we answer questions frequently asked by your peers.
Q. Isn't estate planning only for the wealthy?
A. "No, it's certainly not," says Barbara Kate Repa, a lawyer and journalist with expertise in legal issues for consumers. You need an estate plan if you have children, strong feelings about how you want your property handled after your death, or specific instructions about how your health care should be administered if you can't make decisions for yourself, she adds. Otherwise, a judge will name a guardian for your minor children when you die, state law will dictate who gets your belongings, and your loved ones could end up battling it out in court to determine whether to continue life-prolonging measures for you if you're in a vegetative state.
Q. What does an estate plan entail?
A. Here are the four essential parts of an effective estate plan:
A will takes care of such things as designating the people and charitable organizations you want to receive any property that doesn't have a built-in mechanism for distribution on death (as life insurance policies and retirement plans do) and naming a guardian for your minor children.
A health care power of attorney and living will let you select a trusted person, your agent, to make medical care decisions on your behalf, should you be unable to do so, and to articulate your wishes regarding heroic, life-sustaining measures.
A HIPAA form authorizes the release of your medical information so your healthcare agent can make informed decisions for you.
A durable power of attorney designates someone to handle financial transactions for you if you can't. A power of attorney is revoked at death, so be sure to name an executor in your will to handle your financial matters after your death, says Donald Hamburg, an attorney with more than 40 years of estate planning expertise.
Q. I know there are products online that can help me draft a will and other estate planning documents, so do I really need to hire a lawyer?
A. To get through the maze of regulations and laws, you need someone who is well-qualified, Hamburg says. Even if you once used a self-help product because your finances and circumstances seemed uncomplicated, it's strongly advised that you take your documents to an attorney to look them over, Repa adds. It's especially important for high net worth families to meet with lawyers so their estates aren't hit with larger tax bills than necessary, Hamburg says. Depending on where you live, expect to pay a lawyer $300 for a simple will and up to $1,000 to $3,500 for a comprehensive estate plan—a small price to pay to protect your loved ones from disinheritance or heartache.
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Contact the Office of Gift Planning at 888-419-7584 or legacy@si.edu if you have questions about ways to best meet your charitable and financial goals. Together with your professional advisors, we can design a plan for you.