Surviving family members often express these thoughts after the death of a loved one, “I wish he had done some planning before passing away. We don’t know who is supposed to get what, whether he even thought about special gifts or charity.” We teach people to be good stewards of their gifts from God. The following documents allow you to discharge this stewardship challenge:
A will or trust that disposes of one’s property and appoints a person to be in charge of the process (a person representative or trustee) and to serve as guardian and conservator of minor children
A durable power of attorney for financial matters that appoints someone to act for you when you are temporarily disabled and cannot act for yourself
A living will or health care directive with a health care power of attorney to advise your relatives to carry out your wishes for health care should you be incapable of deciding.
To obtain these documents, you need to retain skilled legal and/or financial counsel. The Office of Stewardship and Development maintains a list of estate and financial planning experts to whom we can refer you to complete your planning process. For information, contact Greg Vranicar at 816-756-1850.
Critical Information to Share As You Prepare to Plan
To obtain these important documents, what information do you need to share? If you contact a lawyer, he or she will probably provide a worksheet that will elicit all of the matters discussed here:
First, your property and how you have it titled is very important. You should be prepared to share the identity and approximate value of all property you own. Be ready to disclose whether you have assets titled jointly or with designations of “payable or transferable on death” (POD or TOD) to other parties. This information will enable your adviser to guide you regarding what property will be subject to probate. You may also be able to plan alternative methods of ownership that can allow you to avoid probate altogether. By relatively easily accomplished methods of titling, one can substantially reduce the property that might pass by probate or trust distribution.
Secondly, you should be prepared to identify all family members, including children, siblings and parents. Also be thinking of charitable organizations that you might want to favor when you are no longer able to support them, including your parish, Catholic schools and other ministries.
Thirdly, you should consider who is capable and willing to serve to carry out whatever plans that you make by your estate plan. In most cases, a husband or wife appoints the other to serve as the first personal representative or trustee and agent under powers of attorney. As a successor, one should consider other family members, including adult children or siblings, who might serve.
In all cases, surviving family members should rely on the assistance of legal counsel after death of a loved one to guide them through the process of administering an estate or trust. One should also consider whether a corporate personal representative or trustee, like a bank or a trust company, might be advantageous. Your legal adviser will have sound recommendations to share in this regard.
Parents of minor children must consider who should serve as guardian and conservator of their children. This is a matter that should be discussed beforehand with the designated person(s) to make sure that they are open and willing to accept the role. Ultimately the Probate Court will make the appointment, but will usually defer to the wishes as expressed in the planning documents. Such a designation avoids costly and difficult family disputes that might arise over these decisions if no designation is made.
Finally, one should consider the person who would be suited to undertake important decisions in the event that you are incapacitated. These duties require different talents and mindsets. For the financial power of attorney, a person with sound financial understanding and experience is preferred. For the duties under the health care directive, one should choose a person who is well informed of your moral and religious preferences, a person with whom you agree and with whom you have discussed your specific desires in the case of your incapacity.
Will or Trust?
A will or trust transfers the property that is not otherwise transferred according to its title. Neither a will nor a trust affects property that is jointly titled or payable or transferable on death. Similarly property that is held in retirement accounts like IRAs, 401 (k)s, 403 (b)s and similar accounts can and should be designated by the beneficiary designations that take the property “out of the will or trust.”
Choosing to have a living or revocable trust may allow one to deal more flexibly with contingencies that might arise, both before and after death. Trusts are private documents. The terms and distribution from them are not a matter of public record. Usually the initial cost of preparing a trust is higher, but the after-death costs of probate of a will may exceed the costs of having a flexible trust. Your attorney can advise you based on the extent of your property, family circumstances and other considerations.
Durable Power of Attorney for Financial Matters
If one had nothing else by way of estate planning documents, the financial durable power of attorney (DPOA) is probably the most important. It avoids the uninviting prospect of court supervised guardian and conservator proceedings with periodic reporting to the Court. Usually clients choose to appoint the surviving spouse as the first agent or attorney in fact often without requiring disability as a condition to exercise the power. It is critical to appoint at least one and preferably two successive alternate agents under the power in the event that the surviving spouse is unable or unwilling to serve. The terms of the DPOA spell out the extent of the activities that can be undertaken by the agent. Typical powers are very broad—to pay bills, manage the business, maintain, buy and sell property—any financial affairs that the person for whom the power is made might do him/herself.
Living Wills, Health Care Directives and Powers of Attorney for Health Care
By the terms of these documents, the maker states the quality of life that s/he desires to maintain if s/he is unable to express these preferences due to disability or disease. While the person is mentally capable to decide, the directive and power have no effect. However, upon certification that one is unable to make health care decisions by the attending physician, then the Living Will or Health Care Directive offers guidance as to the measures that are to be undertaken and appoints a person to make decisions in accordance with that guidance and in consultation with health care professionals.
In Missouri and most other states, the legislature has defined the methods by which health care decisions are to be undertaken and how to appoint decision makers. Failure to appoint an agent can result in the Court stepping in, sometimes with damaging results for family members.
Because these decisions often involve moral and religious values, persons should consult the teachings of the Church. The Church recognizes the individual’s right to choose the level of care to be given in life-threatening circumstances, but strictly prohibits euthanasia or other methods that might hasten the natural dying process. Catholics strongly favor life-saving medical procedures in all cases, except those where death is imminent or where the procedures themselves exacerbate the medical condition of the patient.
Some of you may be considering estate planning for the first time. You may be overwhelmed by the task and just do nothing. This is a perilous course. The financial cost of planning is very manageable and the peace of mind that one achieves in the process is well worth it. One person recently described this as the “S-W-A-N” effect—“Sleep Well at Night.”
For those that have planned in the past, it is important to dust off the documents at least every four years. You want to ensure that your wishes are still expressed and that the persons that you have designated to help are still capable of performing the important duties that you spelled out. You may also now be able to consider charitable institutions that you could not have favored earlier.
In all cases, failing to plan is failing to steward the gifts that God has given you and your family. The good steward manages and cares for those gifts and ultimately gives something back. Without planning, the law that governs those matters provides only “cookie cutter” solutions. You and your family deserve much better than that!
For more information about these matters, you may contact your attorney or financial planner.
Greg Vranicar is Planned Giving Director for the Diocese of Kansas City-St. Joseph. He can be reached at Vranicar@diocesekcsj.org or 816-756-1858, ext. 529.