I love those articles that tell you everything you’re doing is wrong. Lifehacker had a decent one yesterday on how to wash your hair, swallow pills, do laundry, etc. One of the things you may be doing wrong is your will.
You do have a will, right? If so, you’re the exception to about 75% of the people I see. I see it so often that I have developed a boilerplate recommendation to include in my client reports. So don’t pay me to tell you what you already know! Get a will, health care advanced directive, and powers of attorney for financials and healthcare (which might cover the advanced directive nowadays).
Stop reading right now! Call an attorney!
Okay, back live? If you’re part of a couple, here’s a talking point to go over with said attorney. My favorite way of scaring those of you without any will is to let you know that under Illinois law, if you die your spouse will split your assets half and half with your children. There are a lot of wrinkles to this, but most people aren’t thrilled with giving half their money to the kids until both members of a couple are gone.
This may be wrong. At a great NAPFA study group I attended last Friday, attorney Anthony Ferraro noted an important exception. Let’s say (picking randomly) the wife is in a nursing home, and through repositioning of assets, she has qualified for Medicaid to pay for the costs. Unexpectedly, the husband dies and everything is left to her. Suddenly, she has assets that must be spent down and she’s kicked off Medicaid. At current long-term care rates, it’s very likely that small estates (say, under $500k or so) will be completely expended if she’s “lucky” enough to live for several years.
Good financial planners (and attorneys) have heard more disaster stories than you can imagine. It’s just amazing what can happen that you never anticipated. While I sometimes recommend an on-line will generating service as better than nothing, for anything but the simplest lives, it’s barely better than nothing.
As soon as you become a couple, have kids, or have any assets at all, you need to talk to an estate attorney. What would happen to your kids? Who’s in charge of the proceeds of your insurance policy? What if you leave an estate to a child who gets divorced? What if your family and your partner don’t agree on your medical care? And a million other surprise events…
Do you want to have life changing decisions made by a judge? No, I didn’t think so. Get thee to an attorney!