Estate Planning On The Economy Plan

“Yeah, Gary, I absorb your columns and max out your courses, and I know you’re right about the right way to build a really smart and “bulletproof” estate plan. But there just isn’t enough money to pay lawyers and financial planners, and even if there is, I’d rather leave it to the family. What to do?”

Yes, I hear you, Reader A, and many others in your corner of the assets-sphere. Cheers to you for being serious about an adequate plan. An “economy plan” won’t be as solid as a professionally teamworked one, but it’s far superior to intestacy, and galactically preferable to the horrors of an obsolete set of documents. And yes, maybe you can do a pretty good job yourself if you’re willing to do some brainy work.

The first several steps don’t cost anything, anyway. They’re your own “homework.” Unless your dynamics are complex, unusual, international, conflictive, or highly tax-exposed, a little self-education, mining the wealth of available information, will help with the basics, and can cover some of the ground that fee-paid professionals do. Many Internet websites, even the infomercials, are quite informative, and states post official law explanations and guideline formats. Flowing the magic word “Google” through your fingertips will produce vast knowledge. Also, there are firms’ community-service infomercial seminars, my minibooks and our columns and OLLI courses.

Sorry, pro’s, but in fact most of you will agree.

Start with introspection: “What are my deepest wishes about prolonging my life when it’s profoundly disease or injury-afflicted? Who is to have the “pull the plug” power? Who should be empowered and responsible to take care of my affairs when I can’t, what do I want them to do? When I no longer can handle my activities of daily living (ADL’s) what living arrangements do I want? What are my funeralities ‘druthers? Pre-arrange and pre-pay long-term care and funeralities? My deepest heartfelts, thoughts and wishes, to pass on to progeny? Who gets what material assets, and how, before and after I die, and who is to be in charge? What are the smartest assets and entitlements strategies, to take care of beloved and me in our old age?”

Concurrent with introspection is the adventurous detective work of discovery: Finding, organizing, chronicling everything that you own, owe, and are entitled to, especially forgotten and overlooked ones from ‘way back in life’s journey. And then there’s creating the merciful single-source estate operator’s manual, guidelining and encapsulating everything that you and your fiduciaries need to know and to access to manage you and your affairs.

After all that, then you’ll be ready to plunge into the documents.

Here you might luckily have a partial free pass: Existing estate plan documents that were valid and executed in your former state of residence are constitutionally guaranteed to be valid in your at-death state of residence.

But, beware: Besides being obsolete, they’re likely to lack provisions to cope with some states’ quirky (applying to both new and existing documents) requirements. For example, in South Carolina where spouses and children have “elective options” against wills, “living will” documents are often rejected if they don’t contain some specified provisions, and durable financial powers of attorney aren’t valid unless they’re “recorded” (Aha! The first expense – The recordation fee).

Regardless, you might be able to fix all that by amending, rather than starting all over again. Just be sure to follow the state’s guidelines, abundantly available in the above resources in drafting the amendments (in wills they’re called “codicils”) or the re-writes, and to execute them validly. Executing usually can be a little ceremony with your bank’s free customer-service notary public, and two adult witnesses who can be friends or neighbors who have photo ID’s and owe you a favor.

A property will is only one slice of the pie. Its partner, the ethical will “legacy letter” bequeathes your other wealth, heartfelts of thought, ideas, and wisdom. General durable powers of attorney enable someone to manage your affairs when you can’t, and health care POA’s are for making health care decisions. The health care directive, the “living will” conveys your treatment mandates. If your asset or bequest picture suggests trusts, they can own, manage, and distribute assets both before and after you die, as well as carry out your at-disability and at-death instructions, and exempt all their assets from probate. Assets titling — joint ownerships, pay-on-death designations, “inter-vivos” (during life) and beneficiary designations pass assets outside the probate estate too (Whoops! Re-titling assets for this can cost fees, too).

What about fiduciaries, the legalized helpers? In the property will they’re “personal representatives,” in powers of attorney and health care directives, they’re “attorneys-in-fact” or “agents.” We always should name primary, and successor (backup) fiduciaries, carefully chosen for their skills, availability, family-friendly status, and willingness. If you lack candidates, a professional fee-based surrogate fiduciary firm can fill the vacuum.

An undesirable fiduciary can wreck an estate by negligence, misbehavior, or blundering. If there’s no available nominated fiduciary, or the nominated one is successfully challenged for cause, a judge must appoint someone, likely a fee-paid practitioner randomly or political-favor selected from the court’s roster, a total stranger having no idea of your or your family’s dynamics.

We hear woeful tales about probate. Yes, it can be a tedious, expensive, time-consuming hassle. Every estate must be probated, even indigent, intestate ones. The preferred strategy is to minimize the process by having a clean, adequate, compliant will, and by titling the assets as much as possible to by-pass probate. The more we can structure the estate plan to reduce the estate’s classification from “full” to “simple,” or even to “memorandum probate,” the better.

Let’s also understand that probate’s purpose is to expedite the estate’s settlement in behalf of the legatees and statutory beneficiaries. Horry County’s Probate Court’s mission includes being respectful, compassionate and helpful, not hostile. Officers and staff are our friendly neighbors, not at all interested in hassling us or our people. I’ll bet you an ice cream on the Boardwalk that if you take your draft will to them they’ll happily guide you about its validity.

Now, how about attorneys, after all? Obviously, it’s always desirable to have professional guidance, even if it’s just to critically review your own craftsmanship. Some offer to do that for free or for discounted fees. Every state bar association offers a find-the-right-lawyer referral service and a roster of pro-bono civil legal aid practitioners for clients who qualify. South Carolina’s is The S.C. Bar Foundation, P.O. Box 608, Columbia, SC 29202, (803) 765-0517, and on the Internet.

Also, there’s South Carolina Legal Services, the nonprofit corporation funded by the federal government, the South Carolina Bar Association, United Way, and others (LawHelp.org/SC). It and the National Center for State Courts’s “Legal Aid/Pro Bono Resource Guide” lists dozens of foundations and agencies, on the Internet. All of these offer help to eligible clients in a variety of areas, including estate planning and administration.

So, that’s the “economy plan”. See? It “ain’t rocket science” after all! Good luck with it.

This story was originally published November 19, 2015 at 9:21 AM with the headline "Estate Planning On The Economy Plan."