Q. I always had a good relationship with my mother. We would have lots of open conversations and talk about almost everything! If she ever got sick or traveled overseas, she would remind me that she had a will, and I of course believed her and I assumed it was enough and that we were covered. When she passed away last year, we discovered that yes, she did have a will, but her will was 50 years old — and therefore completely useless. It was a shock and caused a lot of stress, money spent for probate, and intrusion into our privacy at a time when we were mourning her death. What can I do to prevent the same thing from happening to my children? I was told by a friend in a similar situation that just having a will is useless, and the same thing will happen if a will is all we have in place, even if it’s up-to-date. Thanks so much for your help!
A. I’m sorry about the loss of your mother. I’m also sorry to hear about all the trouble you had to go through when she died with an outdated will and no other estate planning documents in place. Will signing requirements have changed over the years and now generally require two witnesses and a notary. This was almost surely lacking from your mother’s 50-year-old will, and it’s likely that even if it was witnessed, the witnesses could not be located, thus rendering the will entirely useless. Your friend is mostly correct — a will alone is most often useless. It is important that you and your family have the peace of mind that all of the essential documents in your estate planning are in place and that you will never have to experience the nightmare of probate again!
Two Situations When a Will Is Needed
- If you have minor children (under age 18), a will is essential, as it is the only legal document that can nominate who will become the legal guardian(s) of your children to finish raising them in the event that both parents perish. But even parents with young children should generally have a revocable living trust (read more below) to hold their assets to be used for the benefit of their children to avoid these assets, and all expenditures, being overseen annually by the probate court.
- If your spouse is on long-term care Medicaid (either at home or in a nursing home), a will is essential to ensure that if you die first, your assets do not go directly to your spouse but go into a protected trust that will prevent your spouse from being kicked off Medicaid.
For Most People, a Will Is Usually Not Enough
Although it’s true that having a will as your primary estate planning tool is better than having no estate plan in place at all, a will by itself is not sufficient for most people in the middle stages of life, because a will forces your estate through the unnecessary nightmare of probate. Here’s what a will does:
- It states who is to inherit certain assets upon your death, after they go through probate; but it doesn’t control all your assets, as it doesn’t control assets that have a named beneficiary or a joint owner with the right of survivorship.
- It states who you nominate to serve as the executor of your will, but this is just a nomination, and the court must officially approve the appointment of this person whose job it is to comply with all of the complex probate requirements. More on this below.
- It might help prevent disputes among your named beneficiaries, but it also makes these disputes easier, because a will opens itself up easily to fights since there is already an open court case when the will is first admitted to probate, meaning that anyone with a grudge or anyone who feels slighted can easily come in and file a claim against your will – for example, claiming that you were incapacitated or under duress or undue influence when you signed your will.
- A will certainly has its place in your must-have documents file, but other important documents are needed to ensure that your estate planning is complete. Here’s one of the many reasons: As you have experienced firsthand, having only a will in place, whether it is up-to-date or not, means that you will be subjecting your loved ones to months, even years, of agony in probate court. This can be a very lengthy and expensive process. To add insult to injury, if you are concerned at all about privacy, the probate process makes your will public record, so anyone can read it. All these headaches are simple to avoid. If you have a revocable living trust, you can avoid probate entirely. The person you appoint as a successor trustee to take over managing your trust will simply follow the instructions you laid out in the trust document to distribute your assets. No court, no probate fees, and no intrusion on privacy!
Read more here.
Estate Planning for All Life Stages
Aside from the two important reasons to have a will mentioned above, here are my tips for proper estate planning throughout life’s various stages.
Stage 1: From Age 18 and Over Regardless of Whether You Have Any Assets.
Everyone over the age of 18 should have incapacity planning documents in place, because you never know when you might become incapacitated as the result of an accident or injury.
Incapacity Planning Is an Important Aspect of Estate Planning
Incapacity planning, which we call Level 1 Planning, is a discrete part of the estate planning process through which you create:
- A General Power of Attorney (POA) to name someone to make legal and financial decisions for you if you are unable to due to a temporary or permanent incapacity, and
- An Advance Medical Directive to name someone to make healthcare decisions for you if you are unable to due to a temporary or permanent incapacity.
When you have a good Advance Medical Directive in place, a significant burden is lifted from the decision maker and family who are trying to sort through various treatment options for the one they love during a stressful time. With a good Advance Medical Directive in place, health care professionals caring for you can also feel confident that they are following your wishes.
By doing incapacity planning, you will feel more in control of the future and more confident that future decisions will be made in accordance with your wishes.
Read more about Incapacity Planning here.
Stage 2: From Age 18 to 65 if You Have More Than $50,000 in Assets.
A revocable living trust is part of what we call Level 2 planning, which includes everything under Level 1 planning but adds a revocable living trust, which takes care of everything that your will covers (except for nominating guardians for minor children), and a lot more, all while saving your loved ones the headache and cost of going through probate.
A Revocable Living Trust Is What Most People Need in Stage 2
With a revocable living trust, you can pass on all your assets to your spouse or children or other heirs with ease, and keep your assets protected for them for the rest of their lifetime in the event they get sued, divorced, file bankruptcy, or incur catastrophic medical bills or nursing home bills.
Below is a list of the most important ways a revocable living trust will benefit you and your family.
- You avoid probate court, which keeps the details of your estate private after your death and ensures your assets will be efficiently distributed;
- You can still manage your assets within the trust throughout your lifetime and can choose to move assets in or out of it as you please;
- You can modify the terms of the trust at any time, including who your beneficiaries are and what each one of them will receive after your passing;
- Your trust can protect you and your family during important life transitions including getting married, purchasing a home, having a child, or starting a business.
Creating a revocable living trust will soften the burden for you and your loved ones down the line. In doing so, you are making it as easy as possible for them under the most difficult of circumstances.
Read more about Revocable Living Trusts here.
Stage 3: From 65 – 90 if You Have More Than $100,000 in Assets.
My proprietary Living Trust Plus® takes care of everything that a revocable living trust covers under Stage 2 of life, but adds important protections that many people want to have as they enter Stage 3 of adult life. The Living Trust Plus® is part of what we call Level 3 planning, which includes everything under Level 1 planning but uses the Living Trust Plus® instead of a revocable living trust.
Asset Protection with the Living Trust Plus®
As people in Stage 3 of life age, they typically become more and more concerned about protecting their assets from the devastating expenses of long-term care, which is something that neither a will nor a revocable living trust can accomplish. This is why more and more people in Stage 3 of life are using the Living Trust Plus to protect their assets from probate plus lawsuits plus the devastating expenses of long-term care, especially nursing home care. The Living Trust Plus is similar to a revocable living trust in that it protects your assets from the nightmare of probate. But the Living Trust Plus adds several layers of protection that are not available with a revocable living trust. The Living Trust Plus is a Medicaid asset protection trust. The Living Trust Plus is also a Veterans Aid and Attendance asset protection trust. The Living Trust Plus also protects your assets from risky life events such as driving as you age, or after a diagnosis of dementia, which may result in lawsuits against you if you are found to be at fault in a vehicle collision. Although the Living Trust Plus is an irrevocable trust, you can still act as the trustee if you are competent, and you can still change most things about it, including the trustees and the beneficiaries of the trust.
Read more about the Living Trust Plus here.
Keep Your Estate Planning Documents Up-to-Date
As you learned from your own situation, it’s extremely important to keep your documents up-to-date. In fact, it’s a wise idea to get your estate planning and incapacity planning documents reviewed at least every three to five years (even more often for your Power of Attorney, because many banks won’t accept a POA that’s more than a year old). Similarly, the older an Advance Medical Directive is, the less likely it is that it will be honored by a doctor or hospital.
Here are some additional times you should get your estate planning documents reviewed:
- You become ill or physically disabled;
- Your spouse dies or becomes physically disabled or mentally incapacitated;
- You get married or divorced;
- You have a new child;
- Your child turns age 18, or gets married or divorced;
- Your child becomes ill, becomes physically disabled or mentally incapacitated, or dies;
- You have a new grandchild;
- One of your beneficiaries develops a drug or alcohol problem;
- The value of your assets has significantly increased or decreased;
- You acquire property in a different state;
- You move to a different state;
- You retire or change employment;
- One of your beneficiaries shows signs of being financially irresponsible;
- There have been changes in the law that may affect the language of your documents.
To ensure that your documents are properly reviewed and updated as needed, be sure to ask about the Farr Law Firm’s Lifetime Protection Plan®.
Discuss Estate Planning with Your Loved Ones
Once you’ve decided to get your documents in order or if you are planning on making any major updates, it’s important to communicate the important details to your loved ones. Be sure to read today’s Critter Corner for details on what to communicate and how to effectively do so.
Save Your Family the Headache — Get Your Planning in Order Today!
Here at the Farr Law Firm, we have strategies and proprietary Levels of Planning in place to help you plan for yourself and your loved ones. By having complete and appropriate estate planning and incapacity planning documents in place, you and your loved ones will have the peace of mind that your family’s needs will be adequately and properly addressed.
When you’re ready to start or update your own planning, please contact us to schedule your appointment for an initial consultation:
Northern Virginia Estate Planning: 703-691-1888
Fredericksburg, VA Estate Planning: 540-479-1435
Rockville, MD Estate Planning: 301-519-8041
Annapolis, MD Estate Planning: 410-216-0703
Washington, DC Estate Planning: 202-587-2797
About Evan H Farr, CELA, CAP
