Explain Yourself!
When I talk to a client about an estate plan, I find myself often using the phrase “express your wishes.”
An estate plan is not just about saying who gets what assets. It’s also about saying how the transfer should be accomplished and what the assets should be used for. Similarly, creating documents that say who has legal authority to make your health care decisions if you’re in a coma is only the beginning. What decisions would you want that representative to make? Why?
Explaining your estate planning decisions is important for your loved ones’ legal and emotional future.
Your estate plan lets you nominate a guardian for your minor children. If you die, the guardian serves as the children’s legal “parent” until they are eighteen. However, your nomination is only that – a nomination. A judge has to take it into account, but the judge retains the absolute authority to appoint someone else if the judge believes it would be in the best interests of the children. You are not there to explain to the judge why the person you nominated is the best choice. But if you leave a letter detailing how that person would be the best “parent” for your children other than you, the judge can consider that letter. It might change the judge’s mind about honoring your nomination. It also might help your family better understand your choice of guardian. Maybe Crazy Aunt Cathy thinks she’d be the best guardian because she’s the most fun, but Stable Aunt Sally is who you would really want caring for your children. In the absence of an explanation of your wishes, the stage might be set for your relations to duke it out in court. With the added factor of your own words stating why Sally would be the best choice for your children, you family is more likely to go along with what you wanted rather than to dispute a basic, unelaborated nomination.
While your children are minors, a trustee might be managing their assets for them. The trustee probably has discretion to make distributions for health, education, maintenance and support. The trustee may also be able to make distributions for “any reason” that the trustee sees fit. These are very vague guidelines, and could definitely use some elaboration. Is a backpacking trip through Europe “educational”? Or is it throwing money away on a party? What if your child got scholarships to cover most of college, but now wanted to have a large wedding? Is that a distribution “for any purpose” that you would want your trustee to make? Explaining yourself can offer a lot of guidance to your trustee about how your assets should best be utilized for your children’s benefit.
Additional guidance can also be very important when it comes to your health care. If you can explain to your family under what circumstances you would, or would not, want your life prolonged by tube feeding and life support, your family is less likely to dispute your wishes. They can be emotionally reassured knowing that they are doing what you wanted them to do, rather than making their best guess. Imagine how difficult it would be to “pull the plug” on a loved one, when you aren’t sure whether they would want to be kept living? We probably all remember the situation of Terry Shaivo. Her husband and her parents couldn’t agree on her wishes, and a nasty fight ensued.
Your legal representatives always have some leeway in exercising their powers to act on your behalf. While an informal expression of your wishes – such as a letter – may not be legally binding, what could it hurt? It could definitely do a lot to help.
