My office generally sees a spike in estate planning appointments in a new year and following a natural disaster. This month has brought both.
If you have “getting organized” as a New Year’s Resolution, or if the horrific fires in the Los Angeles area have you thinking of your own disaster preparedness and mortality, you are not alone. If you already have an estate plan in place, congratulations. But do you know where it is? Does somebody else know where it is in the event of your death or incapacity?
How to start
First, find an attorney.
That’s right. Do that first. You don’t need to have all the answers, know exactly who you want to have in charge when you can’t act, or even who gets all your “stuff.”
It’s good to have an idea about those things, but you’ll want to discuss the options with the attorney—that’s why they call us “counselors.”
Also, most qualified estate planning attorneys will have an organizer they can send you to help guide you in listing all of your assets, family members, and thoughts about your plan in an orderly fashion, keeping you focused on what information is needed.
You can’t appropriately decide who will serve as your executor, trustee, power of attorney, or health care agent until you understand those roles and how they are intertwined. Likewise, the types of assets you have, as well as the ages and circumstances of your beneficiaries, are important for your attorney to know in order to design a suitable plan.
Finding an attorney
The best way to find an attorney that’s right for you is to ask other professionals — ask your accountant, your financial advisor, or another attorney you know. Get a few referrals, and ask why the referral source is recommending that particular estate planning attorney (hint: “We’re in Kiwanis together” is not a good enough reason).
Ask if they’ve worked with the attorney before and if the attorney was professional, knowledgeable, and responsive. You can also ask friends and neighbors for the name of the attorney who did their estate planning, and whether they were satisfied with the work.
Then, once you have a few names, check the attorney’s standing with the State Bar of California. Narrow the choices down, and then call those attorneys and ask for a consultation. Many attorneys will do the initial “meet and greet” consultation at no or minimum charge.
After you’ve met the attorneys, ask yourself who you were most comfortable with—after all, you’re going to be sharing a lot of personal details, discussing your values, and planning for your future and the future of your family with the attorney you choose.
Who did you learn the most from? Who paid attention to your concerns? That’s the attorney you want.
What not to do
You’ll notice I didn’t mention “who is the cheapest” in the questions you should ask yourself. That answer is rarely a good basis for decision-making, and that’s particularly true with legal services. You need someone with experience–someone who understands the nuances of estate planning and has a variety of techniques for solving whatever issues you may have.
For the same reason, avoid DIY’ing it online. Yes, I know it’s cheap, and they make it seem easy. The reason it seems easy is because the online forms have narrowed down your options to those that are simplest and most common, and there is no advice — indeed there cannot be — as to whether this works for you or not.
You may think your estate is simple, but that may be because you don’t know what you don’t know. Estate planning, like most legal matters, is a case where “the devil is in the details,” and you can’t work through the details if you don’t know what details matter.
Don’t wait
The LA fires are a tragic reminder that life changes in a moment’s time. If you don’t have a trust and/or a will, a power of attorney, and a health care directive in place for yourself, your parents, and your adult children, move that to the top of your to-do list.
Find your documents
Perhaps you’ve already done your estate planning. Fantastic. But it’s not uncommon that someone will get their estate plan in place, put the binder of documents somewhere “safe” and then never look at them again. Out of sight, out of mind, it seems. But that’s not a good thing.
Your estate plan should be a set of documents — a will, perhaps a trust, a health care directive, a HIPAA form, and a power of attorney — that are reviewed and updated regularly over the years. If you can’t even remember where you put the documents, you’re less likely to think about the necessary updates.
Powers of attorney and health care directives are often needed in emergency situations—natural disasters or health care crisis, for example—if the documents can’t be located, they won’t be of much use to you.
Get those documents out and take a look. If they’re more than three to five years old, it’s probably time for a review with your attorney. If you have a trust from before 2012, it’s definitely time for a review, as there have been significant changes in the law since then.
Keep it safe
Most attorneys will give you your original documents in a nicely organized binder. My office gives our clients the original documents in a binder with “Estate Planning Portfolio” on the spine, and a thumb drive with a complete set of the documents, which can be easily uploaded and shared as necessary. But where to put the binder?
Despite common belief, a safe deposit box at a bank is not a good option. If the bank isn’t open when you or your trustee or agent need the documents, you’ll have a problem. In addition, if the safe deposit box is in your name, rather than the name of your trust, no one else can access it to retrieve the documents.
A fireproof safe at home is an option, but only if someone else can access the safe. Again, if no one can get to the documents, they won’t be of any use at the time they are needed most.
Sitting the binder on a bookshelf or in a drawer will work just fine — again, if someone else knows where the documents are (sensing a pattern yet?).
What if they get lost?
Should your documents be lost in a natural disaster, a move, or general disarray, there are still actions you can take to salvage your plan. Attorneys generally keep electronic copies which can be very helpful.
If there’s a fire, and you survive, but your documents do not, it’s easy enough to execute new documents. If you and your documents do not survive, the fire will be the evidence needed to prove you did not intentionally revoke the documents, and then the copies can be used.
There is also a simplified court proceeding that can be used to avoid probate. All is not lost merely because the original documents are lost.
Estate planning documents for you and your family are a classic example of “hope for the best, but plan for the worst.” Make sure that plan is up-to-date and readily available.
If you, your friends, or family are affected by the horrific fires in Southern California, as our friends, family and clients have been, please know that you are in the thoughts of all the Women and Money Mindset columnists.
Teresa J. Rhyne is an attorney practicing in estate planning and trust administration in Riverside and Paso Robles. She is also the #1 New York Times bestselling author of “The Dog Lived (and So Will I)” and “Poppy in The Wild.” You can reach her at Teresa@trlawgroup.net