The Importantance of Planning Ahead
As an estate planning attorney, I often hear clients, friends, and acquaintances opine that they don’t need an estate plan because they have minimal assets. However, clients withs maller estates realize huge benefits by having an experienced and knowledgeable estate planning attorney provide advice as to various estate planning techniques and then draft the necessary documents. The goal of an estate planning attorney is to preserve clients’ assets, attempt to minimize those assets being diminished through costly litigation and administration, and design a plan that accomplishes the client’s estate planning goals. This is the first of a two-part series explaining some of the common tools used in estate planning and how those tools are beneficial to anyone at any stage of life.
The Estate Plan
The Estate Plan is a broad term encompassing several documents and also includes considerations of titling of assets to effectuate non-probate transfers where advisable. There is no “one size fits all” approachwhenitcomestoestateplanning. The plan that best fits you will depend on the size of your estate and the types of assets you own, and will take into consideration the ages of your beneficiaries and any potential disabilities they may have.
Generally speaking, your estate plan will include a document that manages assets and distributes them after death, whether that be through the use of a revocabletrust, a will or a combination of the two. Wills and trusts will be the focus of the second part of this series.
Other important aspects of your estate plan deal with the issues at the center of this article and that my clients have found themselvesfacedwithatthe most unexpected times and at any stage of life: Who will make decisions related to your healthcare and finances if you are incapacitated and unable to handle your own affairs? The documents that address these possibilities include Living Wills, Health Care Powers of Attorney and General Durable Powers of Attorney.
Living Will
The Living Will, also called a Declaration of a Desire for a Natural Death, is a document in which you indicate your desire that no nutrition or hydration be provided in the event of a permanent vegetative state or terminal illness that is expected to result in death in a reasonably short period of time. Put simply, this is your statement that no artificial means be used to keep you alive in the event that you are unable to tell your healthcare professionals what your desires are relative to these two specific conditions.
Without this document, these decisions are left on the shoulders of loved ones who may not know or understand your wishes, or who may be ill-equipped to make the decision of whether to continue life-sustaining treatment. Without a clear statement of your desires, physicians may be obligated to continue treatment even in the face of family indicating your intention otherwise.
Health Care Power of Attorney
In South Carolina, the Health Care Power of Attorney must comply with our legislatively-created statutory form. In this document, you nominate a person, usually a spouse, adult child, or trusted friend or other family member, to make health care decisions for you in the event that you are incapacitated and cannot consent to treatment yourself.
Without this document, valuable time can be lost in locating a person to make healthcare decisions for you. Additionally, the person who is authorized by law to make those decisions may not be the person you want to have that responsibility, as in the case of estranged spouses or children. It is important to name alternate agents under your Health Care Power of Attorney to serve in the event your primary agent is unable or unwilling to serve or simply cannot be located.
General Durable Power of Attorney
The General Durable Power of Attorney allows you to nominate an agent to make financial decisions for you. The power granted to your agent can be as narrow or as broad as you would like, though it is most beneficial to draft the power to address as many situations as one can possibly conceive in order to avoid an agent having to seek authorization from the Court to do something he or she is not specifically authorized to do under the document. The agent you name should be someone you trust implicitly and is usually a spouse, an adult child, a very trusted friend or other family member. As with the Healthcare Power of Attorney, it is important to name alternate agents to act in the event your primary agent is unable or unwilling.What
Happens If I Become Incapacitated and Don’t Have These Documents?
South Carolina Law provides for a mechanism by which a conservator and/or guardian can be appointed to act on behalf of an incapacitated person. The Guardian is entitled to make healthcare decisions for an incapacitated person and the Conservator makes financial decisions. This process is both costly and requires the filing of an action in Probate Court, a notice to all interested persons and a hearing. Additionally, once appointed, guardians and conservators must comply with annual reporting requirements to the Court as well as bonding requirements.
South Carolina Law provides for a hierarchy of preference as to appointment of a guardian and conservator. It is very possible that the person who is appointed to act as guardian or conservator pursuant to the statute may not be the same person the incapacitated individual would have nominated had they created powers of attorney.
A Note About Trusts
Briefly, a revocable trust is a mechanism by which you can title assets in the name of a trust to be handled by a trustee in the event you become incapacitated. This is an option that would generally be used in conjunction with Pour-over Will, a Durable Power of Attorney and Healthcare Power of Attorney and not in lieu of these documents. An estate planning attorney can discuss whether such a document may be right for you.
An Ounce of Prevention
The old saying that “an ounce of prevention is worth a pound of cure” is never truer than in the estate planning context. Setting up time to discuss these issues with an estate planning attorney today can prevent unwanted individuals from making decisions for you that are not in line with your wishes. Additionally, the comparatively insignificant expense on the front end associated with creating a validand effective estate plan may save your family and your estate considerable expense and time.
Angela D. Harrison is an attorney who has practiced as a member of the South Carolina Bar since 2009. She practices with Moore, Johnson & Saraniti Law Firm, P.A. in Surfside Beach, South Carolina. The information contained herein is not meant to constitute legal advice or in any way form an attorney-client relationship