by Eileen Nims
Everyone dies, not just millionaires and billionaires. The questions we all need to have created answers to are: 1. Who do I want to make medical and financial decisions for me when I can no longer do so myself; 2. Who do I want to care for my minor children or my dependent elderly parents when I’m no longer here; 3. Who do I want my earthly possessions to go to, no matter how many or few I have, when I pass?
Estate planning is not just for the rich and famous.
Estate planning sounds like you need to be of nobility and own country estates before it applies to you. However, estate planning only means that you are making a plan for when you pass away or are no longer able to make good decisions for yourself. The word “estate” is just the legal term for “all your stuff.” Even if all you have is a car and some furniture, you still want to be able to decide who gets those, and not leave it up to probate court to decide!
Writing a will is the most important thing you can do as a parent. If you have dependents, children or adults, you need to have a plan in place for their care in the event you pass away before they do. That plan is the most basic form of a will and a MUST DO. Without this plan in the form of a legal document (i.e. a will), your dependents will become wardens of the state. This means that the state will decide where your children or adult dependents will end up.
Trusts are not just for Hollywood trust-fund babies either. A trust is just another document that is often used as a secure and easy way to have your possessions move from you to the beneficiaries (whomever you have chosen to receive your stuff), without them having to go through state courts.
For example, you can have your life insurance policy, or your IRA account, or your car in a trust, with your child as the beneficiary of that trust. You can still use all of these things while you are alive as your own. You are not losing anything by placing it in a trust. The advantage of a trust is that whatever you have placed in it will automatically transfer to the person(s) you want these possessions to go to.
For medical and financial decisions, everyone over 18 needs an individual Power of Attorney (POA) designating a person to make those decisions for them in the event they are rendered incapacitated. For medical decisions, next of kin are still given that authority, but family members do not always agree on who that would be or may not know what to do.
Having a medical POA in place is crucial to provide clarity during a time of great distress. Due to privacy laws, financial and other business accounts are not accessible to ANYONE without the authorization of the account holder. A financial POA created ahead of time will avoid damage to financial standing or credit scores in the event a person is not able to act on his or her own behalf.
Based in Mililani, Eileen is a Trusts and Estates attorney who received her law degree from Richardson School of Law at the University of Hawaii. She is very familiar with Family Court and has also worked in the Circuit Court criminal division. Eileen also serves as a legislative attorney in the Hawaii State Senate and gives law clinics at Mililani High School. She holds a Masters’ Degree in counseling and has worked in that capacity for many years. Eileen believes in creating harmony and protecting families from preventable hardships. She can be reached at firstname.lastname@example.org or by phone at (808) 664-1834.