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- So You’re A Trustee – Now What? What You Don’t Know, Could Really Hurt You
- Relying on the Internet for Your Estate Planning Can Lead to Disaster
- Life Changes Should Lead to a Review of Your Estate Plan
“Instant” Estate Planning for a Trip
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A vacation is a major motivation for people to do their estate planning. However, there are many travelers who realize just weeks or even days before their trip that they don’t have their affairs in order. Not to worry. Fortunately, even when time is short, there is much you can do, without the need of an attorney to settle your affairs. This is Trip Estate Planning. Understand that although Trip Estate Planning is better than nothing, it is not comprehensive, nor is it designed to be. It is do-it-yourself estate planning that can be done quickly, as a last resort (pun intended). Trip Estate Planning isn’t about avoiding taxes or probate or guardianship proceedings (if you have minor children), but it is a place to start. Trip Estate Planning is defined by your family situation. If you have children under 18, (especially if you are a single mom or dad), be sure to execute all of the following documents: (1) Guardian Nomination Papers; (2) Durable Power of Attorney for Property; and (3) Advance Health Care Directive. Fortunately, in California, these are all statutory forms and easily found on line (or at some retailers). These forms can simply be filled in, signed, and witnesses (or notarized). If you have no kids, or they are all adults, Guardian Nomination Papers aren’t necessary. Guardian Nomination Papers name the person who you want to look after your child’s person and estate in case you are deceased. The guardian of the person manages personal decisions, i.e. where your child will live, who they can play with, medical decisions, school, etc. The guardian of the estate manages the child’s finances. Parents can nominate the same person for both jobs, but that is not necessary. Nominating a guardian before you go on vacation is very important if you want a say in who raises your minor children. In addition, Guardian Nomination Papers can avoid the potential for fighting among the family if different family members have different ideas of who should act as your child’s caretaker. This is because as long as both parents nominate the same person or people, the Court will almost certainly follow the parent’s wishes unless there is a good reason not to do so. If you are a single parent and your ex-spouse has joint custody of your children, he or she will continue to act as a guardian over the person as a surviving parent, but he or she doesn’t automatically have to act as the guardian over the estate. So, if the idea of your ex-spouse managing your money for your kids doesn’t sit well with you, then you should definitely take advantage of nominating another, trusted person (i.e. your parent, friend, sibling) to act as guardian over the estate of your minor children. Finally, I always recommend that each parent complete a separate Guardian Nomination form for each child. A Durable Power of Attorney for Property ("DPAP") allows you to appoint an agent to manage your estate in case your are unable to yourself, usually do to physical or mental incapacity. A DPAP is only effective while you are alive, so it has no place in your estate plan afer death. However, if you are going on a trip, especially if you are single, it is a good idea to nominate someone to manage your estate for you (and by extension, for the benefit your children) in the unlikely event you get hurt on vacation and are temporarily or permanently no longer able to manage your affairs when you return. Married couples will typically nominate the other spouse as first agent and then choose an alternate. If one spouses dies on vacation and the other is injured, the alternate agent can then take over. In addition a Durable Power of Attorney has the added benefit of helping to avoid the need to initiate conservatorship proceedings. A conservatorship is when the Court appoints someone to manage your affairs because you can’t. Conservatorship proceedings are expensive, time consuming, and a hassle. However, a valid DPAP can eliminate the need for a conservatorship over the estate since the DPAP gives someone legal authority over your finances. Finally, keep in mind that a California Statutory Durable Power of Attorney does not give your agent permission to give your property away or to make your will or trust or even to change a life insurance beneficiary. The last of the statutory forms recommended for Trip Estate Planning is an Advance Health Care Directive. This document allows you to name an agent to make health care decisions for you in case you are incapable of stating your desires to your own health care providers. This documents also allows you to state your desires about medical decisions (i.e. end-of-life decisions, donating organs, pain relief). Married couples usually appoint each other as their first agent and then name alternate agents. An Advance Health Care Directive is important to help prevent family members from fighting over your medical treatment. You may recall the infamous case of Terry Schiavo, a young woman in Florida put into a coma by a car accident and how her spouse and her parents were at odds over whether to terminate life support. This ugly battle could have been avoided by an effective Advance Health Care Directive that either stated her wishes or appointed someone with the last word on the subject. An Advance Health Care Directive is very important if you have young kids and are a single parent since your minor kids won’t be able to offer medical consent and you have no spouse. Even if you have adult kids, the potential for conflict can be avoided with an Advance Health Care Directive. Lastly, in California, the agent you appoint in a Health Care Directive can decide how to dispose of your remains, another potential cause for fighting among the family. All of the above discussed documents make sure that you put someone in place whom you trust to make decisions for you or your kids. The last document for Trip Estate Planning is a will. Wtih a will you can avoid intestacy, meaning the State default rules for who gets your property. A will also allows you to appoint someone to manage the distribution of your estate, an executor. Without a will, family members might argue over who will control your estate (an appointment which could be very lucrative). It is easy to write a will for your Trip Estate Plan by utilizing a "holographic" will. A holographic is written in your own handwriting, signed by you and dated. To be a holographic will, it is important that your writing not be witnessed. In other words, don’t bother to have any other person sign the will except for you and don’t get your signature notarized either. The will be proven in court by sworn statements of adults who can recognize your handwriting. Make sure you sign your will, date it, and state who will act as your executor (estate manager) and how you want to distribute your estate. I recommend printing your name on the will so people don’t simply have to rely on an illegible signature. I also recommend you include a clause stating that the document is intended to be your will. If you have children, I recommend stating their names and ages, even if you choose to disinherit a child. A holographic will won’t avoid all issues that could be prevented with more complete estate planning such as the delays and costs of probate. However, it will allow you to leave your estate to the people, organizations, and charities you choose, and avoid the default distribution rules which could result in unintended consequences. In conclusion, with little effort, and through the use of statutory forms and a holographic will, you can do simple and effective estate planning before a trip to make sure you have the right people in place to manage your affairs and that your estate will go where you intended, and not pursuant to California intestate rules. So Bon Voyage! Enjoy your vacation, but, please, don’t forget to do a thorough estate plan when you return (especially if you want to avoid probate).