How to Be Sick, Part III - Where There’s a Will, There’s a Way

Topics: death, estate planning, funerals, Indiana Jones references

I asked my brother, Tyler D. Gaastra, J.D., to step in and answer some questions about the really dark side of being sick: what happens if I don’t get better? Nobody wants to think about it, but the fact is we will all die (and pay taxes). Having first-hand experience of what it looks like to close an estate without a will or trust, I can tell you it’s brutal. Any planning you do to make your absence easier on family and friends is one of the kindest things you can do.

Thankfully—or maybe to him, annoyingly—Hunter had a sassy benefits administrator and super smart lawyer who stressed to him the importance of purchasing life insurance and designating beneficiaries (gotta love older siblings). So he did. Hunter’s life insurance policy enables us to grow the Hunter E. Boss Foundation and carry on his legacy.

Nobody wants to think it’s going to happen to them. The sad reality is, it will. So what can we do to prepare?

What are the different elements of creating a legal plan and what do you recommend people have in place regardless of age/marital status/profession? 

We tend to think of an estate plan as a set of documents. That is basically what the online companies sell to people. In reality, your attorney should do much more than draft documents. 

Most people do some estate planning without even realizing it. For example, we complete beneficiary designations on our retirement plans, we open joint accounts with family members, and we obtain life insurance policies through our employer and privately. Of course, everyone should think carefully about those beneficiary designations and joint accounts. They certainly have significance. 

Otherwise, as for traditional estate planning documents, a financial power of attorney and a medical patient advocate designation are two very common documents that are beneficial for everyone regardless of age or marital status.

What is the difference (like you're talking to a ten-year-old) between an advance directive and a DNR? Can anyone change/override these documents if I’m unable to speak for myself?

That is a good ChatGPT prompt. A DNR—I’m assuming you’re speaking of a Do-Not-Resuscitate order, and not the Department of Natural Resources—is a specific document that provides instructions concerning life-saving treatment. We can all imagine situations in which the treatment to revive someone, such as CPR, would seem inappropriate given a person’s frail state prior to a heart attack or something. By design, a DNR should/would allow for a peaceful death. 

The patient advocate designation mentioned earlier is also a form of advance directive. The patient advocate only steps in when the patient is unable to speak for themself. The prospect of changing or overriding these instructions is rare and it would likely involve the probate court, e.g., the appointment of a guardian that is not the patient advocate. 

What is the benefit of having a will in place? What is the ballpark cost of having one put together?

Wills are constitutions of sorts that govern the administration of a person’s affairs upon death. The wills can include guardianship designations for minor children and the funeral representative, who is the person tasked with making the funeral arrangements and burial decision. Wills also govern the distribution of any remaining assets.   

If someone dies without a will, we call that intestate, then the state provides and applies all the default rules. As you and I know, the state rules are simplistic and follow a simple family tree. In-law or “step” relationships, for example, often don’t count. If you would rather have a friend or in-law inherit anything from your estate, should there be one, you’ll need a will at minimum to override the state’s rules. 

Wills do not, in themselves, keep assets out of probate. 

Estate plan documents are often prepared with a flat fee, which varies. My pitch here is that thinking of an estate plan just in terms of document preparation is wrong. Obviously, people can get documents from many sources. Documents are necessary components to implement an estate plan in the same way that forming an LLC with the state is a necessary component to implement an actual business plan. A helpful attorney does not rest on document preparation—they work with you on creating an comprehensive plan that reflects your priorities. 

Should my POA be an actual attorney? What do they do?

The power of attorney document is very helpful as a matter of convenience, having a spouse execute documents in your absence, and as a matter of necessity, such as in the event of incapacity. Having a simple power of attorney designation may mean that your loved ones do not need to petition the probate court to open a conservatorship if you’re incapacitated for any reason. The designated person, aka agent, is called an attorney-in-fact, which is NOT an attorney in the professional sense. Nevertheless, the attorney-in-fact is subject to various fiduciary duties and responsibilities to the principal (individual who initiated it). 

What is the difference between a POA and the executor of an estate? Should they be the same person?

Death. The power of attorney dies with the principal. The executor of an estate is a position established by law and created when a probate is opened. 

The duties and responsibilities are somewhat similar. There is essentially a principal and agent relationship in both cases. It’s possible that someone acting with the authority of a power of attorney designation may have access to financial information and business records of the principal that would be helpful in the event of the principal’s passing. This would give the attorney-in-fact a leg up in terms of serving as an executor for the resulting estate. 

What is probate and why do I want to avoid it?

Probate is the orderly administration of a deceased person’s estate pursuant to state law. Through the careful use of beneficiary forms, trusts, transfers on death, and joint ownership, assets may be distributed in such a way that no probate is necessary upon death. The probate process can be costly and time consuming, but every state is different. 

If something happens to me, what is the best way to make sure my family is taken care of?

We call it estate planning. That’s it. This is about planning. Think of life insurance to cover expenses and debts, beneficiary designations on assets, passwords for all of your various accounts, treasure maps, a diary with instructions on how to find the holy grail, and legal documents that address your wishes. If you don’t make a plan, the state will provide some default rules, which may or may not be at all consistent with your desires. 

Anything I'm missing that people should know/consider?

The easiest way to avoid disputes among heirs and loved ones is to provide your instructions. Also, I think tax planning and asset protection are part of estate planning, but neither should overly burden or complicate living.

Tyler is a lawyer, but he is not YOUR lawyer. This is an informational guide, not nuanced legal advice. For individual planning, please contact your attorney. If you do not have an estate attorney and are local to Michigan, you can find Tyler at David, Wierenga & Lauka in downtown Grand Rapids.