Beyond your Estate plan, what’s your legacy?

If you are a fan of crime writing and TV drama you may have a romantic notion of a Last Will and Testament being your voice from the grave. The opportunity for you to tell everybody what you really think of them and share some of your values and opinions. In reality, a Last Will and Testament is generally a clinical legal document that must be unambiguous and to the point. It has to clearly set up the roles and responsibilities of the Executor and Trustee, unequivocally lay out your wishes for the distribution of the estate, and include clear instructions for additional responsibilities like guardians for minor children. Because the document has to be completely unambiguous, it is not the most appropriate vehicle for sharing your opinions on the World and your circle of loved ones.

Having said that, it is extremely important to be able to leave a little of yourself for future generations, and now people talk about the leaving of a “legacy” beyond your estate. A legacy plan differs from an estate plan because it communicates your values, wishes and memories rather than the distribution of your possessions.

There is more connecting the Last Will and Testament to the Legacy Plan than you may at first think. You may have chosen to leave tens of thousands of pounds or dollars to a child or grandchild – a legacy plan would give you the opportunity to share with that young person the values that go along with that inheritance. If you have spent a lifetime frugally accumulating a reasonable estate, it would go against all of your principles for the recipient of an inheritance to rush out a buy a new Porsche with their new-found wealth. With an inheritance comes responsibilities and although a Will may make passing reference to the sentiment behind a bequest, it is not a place to share your moral values and explain how you would want an inheritance to be received. If for example you accumulated some money by placing every loose penny in a jar for your whole life and then investing those pennies wisely, a $2,000 inheritance may mean a little more to the recipient than a new big screen TV.

Your legacy documents should be stored with your estate planning documents and can be made up of things like a video message, letters to loved ones, a scrapbook of important events, photos, memorabilia and journals. There is a wonderful book called Your Legacy of Love by Gemini Adams that explains the importance of your legacy items with practical tips for creating a lasting legacy. The book includes the amazing statistic;

“If one of your parents died, what would you prefer: to inherit their money, or a letter saying how much they loved you?” Over 90% expressed a wish for the loving letter.

So although it is important to have your estate planning documents in place, consider complementing those documents with a description of what your estate means to you and what your loved-ones mean to you. Explain why your estate is being distributed the way you have outlined in your Will and share some of your values that should accompany any inheritance.

The Living Will….

We mentioned in a previous post the three documents that make up most estate plans; the Last Will and Testament, the Living Will and the Power of Attorney. So I thought we would discuss in a little more detail the Living Will; what it does and why you may need it.

The topic of Living Wills is another one with a number of confusing terms which may or may not mean the same thing, and an area where there is no consistency in the use of these terms. You may see the term “Advance Health Care Directive” used interchangeably with Living Will, but we tend to use that term as a collective name for both the Living Will and your Healthcare Power of Attorney (another term that has many, many variations depending on where you live).

In essence, the Living Will allows you to state ahead of time the types of medical treatment you wish to receive if you were ever in a condition where you were unable to communicate those wishes. It is a document that is in effect while you are alive (unlike the Last Will and Testament), but the law determining what can go into a Living Will and under which circumstances it can come into effect vary by each jurisdiction. The main reason for creating a Living Will is to avoid family turmoil when loved ones are expected to decide how long to preserve your life if you are in an irreversible, persistence vegetative state. The situation that everybody wants to avoid was probably most graphically illustrated a few years ago with the Terri Schiavo case . The types of treatment usually requested or denied in a Living Will are things like analgesia (pain relief), antibiotics, hydration, feeding, and the use of ventilators or cardiopulmonary resuscitation.

The document that complements the Living Will is the one that names a Healthcare Proxy or “Power of Attorney for Healthcare”. This document names somebody who can make healthcare decisions on your behalf if you were ever unable to speak for yourself. This will typically be authorizing certain types of treatment, or potentially refusing some treatments. This person has the same rights to refuse treatment as you would have yourself. The decisions though would most likely be guided by directions provided in the Healthcare Power of Attorney document or Living Will.

We encourage all of our clients to prepare a living Will and Healthcare Power of Attorney. President Obama publicly stated last year that he has one and encouraged everybody to write their own. He said

“You may be familiar with the principle behind a living will, but it basically is something that my grandmother, who you may have heard recently passed away, it gave her some control ahead of time so that she could say, for example, if she had a terminal illness, did she want extraordinary measures even if, for example, her brainwaves were no longer functioning? Or did she want just to be left alone? You know, that gives her some decision-making power over the process. The problem is, right now, most of us don’t give direction to our family members and so, when we get really badly sick, sadly enough, nobody is there to make the decisions and then the doctor, who doesn’t know what you might have preferred, they’re making decisions in consultation with your kids or your grandkids and nobody knows what you would have preferred.

So I think the idea there is to simply make sure that a living will process is easier for people. It doesn’t require you to hire a lawyer or — or to take up a lot of time, but everything is going to be up to you.

And if you don’t want to fill out a living will, you don’t have to, but it’s actually a useful tool, I think, for a lot of families to make sure that, you know, if, you know — you know, Heaven forbid, you contract a terminal illness, that you or somebody who’s able to control this process in a dignified way that, you know, is true to your faith and true to how you think, you know, that end-of-life process should proceed?

You don’t want somebody else making those decisions for you. So I actually think it’s a good idea to have a living will. I’d encourage everybody to get one. I have one; Michelle has one. And we hope we don’t have to use it for a long time, but — but I think it’s something that is sensible.”

Unlike a Last Will and Testament, you may never need a Living Will. It depends on the circumstances behind your demise. Unfortunately, by the time you need one, you will be in no position to create one. At LegalWills, you can create one in about 20 minutes and it isn’t expensive at all.

Which documents are in an “estate plan”?

The term “estate planning” is an often used, but sometimes misunderstood term. We use it to refer to a complete suite of documents that work together to take care of your needs when you are unable to communicate your own wishes. The core set of documents in an estate plan are the Last Will and Testament, the Living Will (with a Healthcare Power of Attorney) and a financial Power of Attorney. Different jurisdictions have variations on the exact terms used, but in essence these are the three key documents.

The Last Will and Testament is the document that everybody must have, no matter what. It only comes into effect after you have passed away, can be updated as many times as you wish while you are alive, and only the most recent (the “Last” Will) describes how your assets will be distributed once you pass away. It is true, that even without one, your assets will be distributed, but this will not be based on your wishes, but on pre-defined laws that vary slightly from jurisdiction to jurisdiction. We’ll talk a little about what happens when you don’t have a Will in a future post. But, everyone will die, so everyone needs a Will.

A Living Will gives you some say in the way you will be treated before you die, in a situation where death is otherwise inevitable.  This can be used in two ways — to put a swift end to intolerable suffering, or to endorse the use of experimental treatment to try to save your life if at all possible.  Most people die in hospitals and often this is after receiving treatment administered in an effort to prolong a person’s life.  Medical staff are duty bound to use everything within the powers of modern medicine to keep a patient alive as long as possible, and within those powers there are regulations to be followed.  Medical staff are obliged to preserve a patient’s life without necessarily considering the financial or emotional concerns of the patient and loved ones. The most common use of a Living Will is to express your desire for a voluntary passive euthanasia.  Simply put, this means that medical staff should not artificially preserve your life under specific circumstances which are determined by you.  In addition, your Living Will or “healthcare directive” can express your views on the health care that you wish to receive if you were ever in a permanent coma.

With the Living Will comes a Healthcare Power of Attorney. A Power of Attorney for Health Care allows you to nominate a Health Care Representative who can make health care decisions for you when you are incapacitated and unable to make decisions for yourself.  It can be used to complement your Living Will. Together the Living Will and Healthcare Power of Attorney are known as your “Advance Directives“.

Finally the Financial Power of Attorney. Again, this is only in effect when you are alive and is immediately cancelled when you pass away. It is a more complicated document as it has a number of variations as to when it comes into effect and how long it lasts. Essentially though, it allows somebody to take control of your finances if you were even unable to do this for yourself e.g. in a coma. This person would be able to pay bills, perform banking transactions or buy and sell assets on your behalf.

These three documents are your estate plan. The Last Will and Testament will definitely be used if you have one, the Living Will (and Healthcare Power of Attorney) and Financial Power of Attorney will only come into effect if the appropriate situation arises. It is however prudent to have all of the documents in place and stored together in a safe place.