Estate planning terms
Estate: Anything you own, including vehicles, bank accounts, investments, property.
Executor: The person who is responsible for making sure all details of a will are handled correctly.
Health care directives: A written document that expresses your wishes on actions related to your health care, particularly in times of crisis.
Last will and testament: Written document in which you designate how you want property and personal affairs handled after death. In a will you can name who gets your property, who will care for your children and who will serve as executor of the estate.
Power of attorney: A written document that authorizes another person to perform actions for you. The actions can relate to finance or business or can relate to health care decisions. The same person can be the power of attorney, or agent, for health care and financial dealings or two agents can be designated.
Trusts: An arrangement which allows for the management of your property. There are trusts that manage your property while you're living or after you die.
The state of Ohio recognizes directives, including:
Living will: In this document, you declare what sort of life-sustaining treatment you do or do not want if you are terminally ill or permanently unconscious.
Health care power of attorney: Authorizes another to make health care decisions for you when you are unable to make them yourself. This document is broader than the living will as it can authorize decisions be made for you at any point, not just in terminal or unconscious situations.
There are many reasons people cite for not filling out important documents like a will or papers dealing with medical decisions.
First, there’s the fear of death, said Kettering attorney Nancy Roberson.
“Space isn’t the final frontier, death is,” Roberson said. “Most everybody is afraid of it.”
Then there’s good old-fashioned procrastination, said Dayton attorney David Schmidt.
“I don’t know if it’s just human nature and they wait too long or they are just plain in denial about it,” he said.
None are good reasons, attorneys said. Getting your important documents in order can offer peace of mind and can avoid future costs.
“With good planning, it costs about one-third the amount than without planning,” Roberson said.
Everyone should have a will, a durable power of attorney for financial decisions and a durable power of attorney for healthcare decisions, Schmidt said.
“Ninety-nine percent of the population can get by with those,” he said.
Mistakes and misconceptions about estate planning
• Many clients do not seek out health care directives, like living wills, which designate what life-saving treatment they do or do not want until they are about to undergo major surgery.
But those who typically end up in situations needing a living will are more likely to have been involved in a car accident than being in a hospital for surgery, Roberson said.
Another mistake Roberson sees are those unprepared for a serious accident’s aftermath lacking long-term care insurance and life insurance, she said.
• There is more than one kind of power of attorney. A person needs a power of attorney designated for their financial decisions and for their medical decisions. The same person, who is called an agent, can be designated, but both financial and medical must be addressed.
“I’ve had clients say, ‘Oh, I have power of attorney’ and then they go to the bank with a healthcare power of attorney,” Schmidt said.
• Attorneys said many make poor judgments on who they pick as their agents. If you and your spouse are older, it might be wise to pick a child instead, Schmidt said. Also, some parents try to keep children happy or try to be what they consider fair instead of making the best decisions for their estate.
“Parents do what I call feel-good wills,” Schmidt said. “(They say,) ‘Well, I’m gonna name Arthur executor because he’s the oldest.’ Now wait a minute, just because he’s the oldest, that doesn’t make it appropriate.”
• Some spouses assume they have power of attorney or other rights just because they are the spouse. Not true.
A power of attorney designation is necessary. Spouses can’t participate in an incapacitated spouse’s medical or financial decisions without a power of attorney document, attorneys said.
• When asked, nearly 100 percent of clients say a will is the most important document. Not so fast, Roberson said.
If you are a single person, with no dependents, perhaps a living will, indicating directives relating to long-term care is most important. If you have children, a guardianship document might be more important.
“There’s a lot more that goes into estate planning than making a will,” Roberson said.
• Using do-it-yourself estate planning. Schmidt’s concerns with online will companies is straightforward. You can do it, the document will be legal, but you will receive no guidance with the will. He thinks the United States is a country where we like to handle things ourselves, but there is a limit.
“You could pull your tooth if you want, I’ll give you the pliers, but you might bleed to death,” he said.
Peace of mind
Sixteen years ago, Judy Hirschman’s husband, Carl, was diagnosed with cancer. The couple had a will, but did not have guardianship papers for their child and children from Carl’s previous marriage.
“We had to make sure everything and everybody was looked after and cared about,” she said.
Carl eventually died, but having his wishes and his business in order was one less thing he had to worry about at the end and one less thing for Judy to have to deal with on her own.
“It was a certain of relief for him to know his business was in order,” said Hirschman, a realtor who lives in Kettering.
“He was a very detailed man so the day he died I could pick up a book he had prepared to tell me who he owed, where it was to be paid and everything.”
Hirschman recently updated her medical and financial documents, partly to respond to updates in state law, but also because she was diagnosed with cancer two years ago. She updated her living will.
“You don’t want to think about these things, but you just know that it’s done,” she said.
Her mother’s power of attorney was also updated, adding Judy’s brother’s name in case she was unable to assist her mother.
“Because of my illness, it puts my brother on equal footing,” she said.
Both Roberson and Schmidt said estate planning is a kind thing to do for your family now and after you’re gone.
Both suggest planning funerals in advance to avoid overspending because of emotional stress and to make sure what the person wants done with their body after they die.
“Taking the time and energy to do estate planning shows your family that you care enough about them to make plans for their future,” Roberson said.
Contact this reporter at (937) 225-2216 or kmargolis@coxohio.com.
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