Steps For Starting the End-of-Life Conversation

No one likes to talk about death and dying, at least not their own. And yet, it’s a critical time in everyone’s life and we know we need to prepare for it. While many people would like to share their wishes, something always seems to keep us from openly communicating with our families.

As an important part of estate planning, healthcare decisions also need to be discussed. This helps preserve our legacy and provide peace of mind for our loved ones. We can rest easy knowing that if they need to act, they will respect and carry out our wishes.

If you’ve been dreading having this talk with your own parents, children, or other family members, there are a number of steps to consider.

Just Ask

Before launching into this tough conversation, it’s not a bad idea to pose the question “when?” Ask your loved one when they might have time to discuss your estate planning and healthcare decisions. By introducing the topic this way, no one is caught off guard—and it can help everyone reflect on what they really want to communicate before sitting down.

Aim for Clarity

Do whatever you can to help make these conversations clear. Write out a list of major points you want to make ahead of time. Be prepared that your family may have questions they want to ask about—inclusion of family members in the decision-making process, preferences for memorials, etc. Simplicity and clarity can help neutralize the feelings of anxiety that everyone may have and help everyone walk away from the conversation with the peace of mind they were hoping for.

Don’t Get Sidetracked

This is a tough one. Likely no one really wants to talk about it, or would rather talk about something else. But you’ve got to help get through it. So even though the conversation will no doubt be rife with opportunity to reflect, remember, and opine: try to stay on task. You want to make sure that everyone walks away from the conversation with a better understanding than before.

Keep the Conversation Going

While it may feel like a one-time conversation because it’s emotional, or hard to have if your loved one lives far away, remember that it’s not a one-shot deal. You are simply opening the lines of conversation, not setting anything in stone. Remembering this will help empower everyone to be open.

Need Assistance? Give Us a Call

Talking about your end-of-life decisions can be hard, but it is an essential part of estate planning. If you have any further questions about how to have these conversations or would like us to help facilitate this discussion, please feel free to contact us. We are here to help!

Protecting Your Children’s Inheritance When You are Divorced

Consider this story. Beth’s divorce from her husband was recently finalized. Her most valuable assets are her retirement plan at work and her life insurance policy. She updated the beneficiary designations on both to be her two minor children. She did not want her ex-husband to receive the money.

Beth passes away one year after her divorce. Her children are still minors, so the retirement plan and insurance company require an adult to be appointed to receive the inheritance Beth left behind. Who does the court presumptively look to serve as the caretaker of this money? Beth’s ex-husband who is now the only living parent of the children. (In Virginia, this caretaker of the money is called a conservator. The title does not matter as much as the role, which is to manage the funds on behalf of a minor, since a court would not ordinarily allow a minor to receive significant assets or money without adult supervision.)

Sadly, stories like Beth’s are all too familiar for the loved ones of divorced people who do not make effective use of the estate planning tools. Naming a beneficiary for retirement benefits or life insurance, or having a will can be a good start. However, the complexities of relationships, post-divorce, often render these basic tools inadequate. Luckily, there is a way to protect and control your children’s inheritance fully.

 

Enter the Trust

A trust allows you to coordinate and control your estate in a way that no other tool can. For those who are not yet familiar, a trust is a legal arrangement for managing your property while you are alive and quickly passing it at your death. There are a few key players in the trust. First, there is the person who created the trust, called the Grantor (this is you). Second, there’s the Trustee who manages the assets owned by the trust (usually you during your life and then anyone you select when you are no longer able to manage the assets). Finally, the Beneficiaries are the people who receive the benefit of the trust (usually you during your life, and then typically children or anyone else you choose).

How a Trust Protects Your Children’s Inheritance after a Divorce

A trust protects your children’s inheritance in a few distinct ways:

  1. Since you select the Trustee, you can choose someone other than your ex-spouse to manage the assets. In fact, you can even state that the ex-spouse can never be a Trustee, if you wish. If Beth had a trust, she could have named her brother to be Trustee after her death. Her brother (rather than her ex-husband) would then be in charge of the children’s inheritance.
  2. Since you select the Beneficiaries, you can determine how the trust assets can be used for them. You may have long-term goals for your beneficiaries, such as college, purchasing of a first home, or starting a business. When you share your intent, your Trustee can invest the assets appropriately and ensure your legacy is used the way you want, rather than the assets being potentially wasted or used in a thoughtless way. If Beth had a trust, she could have instructed how she wanted the inheritance used, rather than leaving it to the whims of a court and her ex-husband.
  3. A fully funded trust avoids probate, so your children do not have to deal with the cost, publicity, and delay that is all-too-common in probate cases. Although “plain” beneficiary designations, like the one that Beth used, also avoid probate, they may still open the door for a conservatorship court case, especially when your children are minors. A fully funded trust avoids this potentially difficult and stressful litigation. This means more money for your intended beneficiaries and less for the lawyers and courts.

 

If you are divorced, it is essential to make sure your plan works precisely the way you want. Every situation is unique, but we are here to help design a plan that achieves your goals and works for your family. We can help you provide peace of mind, and help keep your children and their assets away from court, so give us a call today.

Wills, Trusts & Dying Intestate: How They Differ

Most people understand that having some sort of an estate plan is, as Martha Stewart would say, a “good thing.” However, many of us don’t take the steps to get that estate plan in place because we don’t understand the nuances between wills and trusts – and dying without either.

Here’s what will generally happen if you die, intestate (without a will or trust), with a will, and with a trust. For this example, we’re assuming you have children, but no spouse:

  1. If you should die intestate, your estate will go through probate and all the world will know what you owned, what you owed, and who got what. Your mortgage company, car loan company, and credit card companies will all seek payment on balances you owed at the time of your death.

After that, state law will decide who gets what and when.

  • For example, if your only heirs are your children and you have not provided any instructions, state law will mandate divvying up proceeds equally.
  • Your older children will get their shares immediately if they’ve attained adulthood.
  • But, the court will appoint a guardian to manage the money for your minor children until they become adults.
  • Shockingly, that guardian can charge a lot of money and be a total stranger – as can the guardian who raises your child.
  • Yes, if you die without a valid will, the court, not you, will decide who raises your minor children.

Keep in mind that since your death has been published to alert valid creditors, it’s not uncommon for predators (fake creditors) to come forth and make demands for payment – even if they’re not owed anything.

The bottom line? Dying intestate allows state law and the court to make all the decisions on your behalf – regardless of what your intent might have been. Publicity is guaranteed.

  1. If you should die with a valid will, your assets will still go through the probate process. However, after creditors have been satisfied, the remaining assets go to whom you’ve identified in your will.
  • So, if you want to leave money to your children and name a guardian for the minor ones, the court will usually abide by your wishes.
  • The same holds true if you specified that you wanted to give assets to a charity, your Aunt Betty, or your neighbor.
  • Keep in mind that predatory creditors are still an issue as your death has been publicized. Even with a will, probate is a public process.

The bottom line? While a court oversees the process, having a will allows you to tell the court exactly how you want your estate to be handled. But, a public probate is still guaranteed.

  1. If you’ve created a trust, you’ve taken control of your estate plan and your assets. Trust assets are not subject to the probate process and one of the most important benefits of trusts is that they are private. Notices are not published, so you avoid predators coming after your estate.

You’ll have named a trustee to manage your estate with specific instructions on how your assets should be dispersed and when.

  • One word of caution – trusts must be funded in order to bypass probate.
  • Funding means that your assets have been retitled in the name of your trust.
  • Think of your trust as a bushel basket. You must put the apples into the basket as you must put your assets into the trust for either to have value.

You do still need a will to pour any assets inadvertently or intentionally left out of your trust and to name guardians for minor children.

The bottom line? Trusts allow you to maintain control of your assets through your chosen trustee, avoid probate, and leave specific instructions so that your children are taken care of – without receiving a lump sum of money at an age where they are more likely to squander it or have it seized from them.

Don’t let the will versus trust controversy slow you down. Call the office today; we’ll put together an estate plan that works for you and your family whether it be a will, trust, or both.