There is something about single parenthood or getting older, or both, that makes one take a step back and do some reassessment. Recently, I was thinking, “What would happen to my kids if I suddenly pass away next month or next year?” And also, “What about my house and other assets? Will my kids automatically get it?”
In a previous blog post, I tackled financial first aid kits and included are a living will and advance healthcare directive, which are parts of an estate plan.
So I asked a local estate planning attorney for some much-needed help and hope that some of you benefit from his advice too.
“Every person should have a will,” says David Lieberthal, who practices in Westlake Village, California.
According to Lieberthal, when we pass away, the Probate Court is responsible for transferrng our asets to our heirs. If we don’t have a will, the court will follow the default distribution plan set out in the Probate Code, which is to find the closest relative and give everything to that person.
In short, whether or not you like Aunt Mary or Cousin Joe, if they are your closest relatives, they might end up with your assets, if you die without a will. It doesn’t matter whether the last time you spoke to them was Thanksgiving of 1987. It doesn’t matter whether you really wanted your kids or your parents to inherit your house and other assets. Without a will, those wishes are just that – wishes.
“The will is what we use to communicate our true wishes to the court,” says Lieberthal.
Aside from the will, a living trust, a durable power of attorney and an advance healthcare directive are also components of estate planning. “When there is real estate involved, I recommend a living trust, which allows the transfer of assets to heirs without going through the full probate process,” he says.
On the other hand, the power of attorney and healthcare directive will help our loved ones take care of us when we can no longer take care of ourselves. Says Lieberthal, “The power of attorney allows the person we choose to manage our finances while the healthcare directive allows the person we choose to carry out our medical wishes when we can no longer communicate them to our healthcare providers.”
Do you still need a will if you have no significant assets but have children, like my friend Elaine*? “Yes, the will is the document where we list who will raise our children and take care of them should something happen to us. Without it, the court will determine who takes care of the children, and that is not a decision that you want to leave to strangers,” says Lieberthal.
Another friend Nina* is quite the opposite of Elaine*. She is single but owns a house and a business. She needs a will and most likely, a trust, according to Lieberthal, to ensure that her assets will go to the people or organizations of her choice. The will makes sure Nina’s wishes will be carried out.
I know one of my main concerns and probably yours too was the cost of putting an estate plan together. If you can’t afford an attorney, contact a legal aid service. Legal aid offices or legal services are not-for-profit agencies that provide free legal help to seniors, low-income individuals and the like. In California, there is a listing of legal aid service providers on www.calbar.ca.gov.
Whatever you decide on – an attorney or a legal aid service, just don’t put it off. You owe it to yourself and your loved ones.
*names have been changed to protect privacy