Bullet-Proof Your Estate Plan

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Whether you’ve been meaning to update your estate plan for one year or a dozen, the new year presents a new chance to implement an effective estate plan, and give yourself and your loved ones the peace of mind of sound planning. While estate plans can be as unique as the people who create them, there are generally four core documents that everyone should have and continue to update as the years pass by. If you do not have even one of these documents, or if you have not revisited them since Dick Clark hosted the ball drop, make 2026 the year you truly bullet-proof your estate plan.

The first of the core four documents is the Last Will and Testament. Simply put, a Will distributes your Estate at your death. If at the time of your death, you own any assets – whether real estate, an automobile, a checking account, or an investment portfolio – which are titled in your name alone with no beneficiary listed, the distribution of these “probate assets” will be determined by your Will. However, if you die without a valid Last Will and Testament, the State steps in and determines this distribution according to statute, with no attention given to your wishes or the needs and circumstances of your particular family and friends. In this way, your Will is your opportunity to assert your intentions for all that you have worked hard to earn, save, and grow in your life. With a Will in place, you can rest assured that your plans and preferences will be followed when it comes to what you choose to leave to your loved ones. Without a Will, you are rolling the dice that when it comes to your legacy, the government knows you and those you love well enough to make your decisions for you.

There are a variety of practical considerations involved in creating a Will. For instance, in order for a Will to be valid, it must be in writing and signed by the Testator (the person making the will), in the conscious presence of two or more witnesses. These witnesses attest to the Testator’s capacity to create the Will, and so must be both competent and disinterested (they cannot be a beneficiary under the Will).

Further, a Testator who wishes to disinherit their child must do so with specific language making that intent clear – in Ohio, simply leaving a child’s name out of the Will does not go far enough. Additionally, a feature of many Wills is the “no-contest” clause, which makes anyone who challenges the will or their inheritance ineligible to inherit in the first place.

Finally, a valid Will is absolutely essential for parents of minor children. This is because a Will nominates a legal guardian for children who could be left without a guardian in the event of the Testator’s passing. Similarly, a Will nominates a custodian for any assets that those minor children may inherit through the Testator’s Estate. In short, a Will is the way for parents to make their wishes known when it comes to the care of their children if the parents are no longer here to care for the children themselves.

The second of the core four estate planning documents is the Financial Power of Attorney. A Financial Power of Attorney grants a trusted individual (called the “agent”) authority to take certain financial and legal actions and decisions on behalf of the person signing the document (called the “principal”). These actions can be simply for everyday convenience’s sake. For instance, an adult child with Financial Power of Attorney for their aging parent can deposit or sign checks, pay bills, deal with insurance or utility companies, or enter into all sorts of arrangements for professional services on their parent’s behalf, from landscaping to accounting to physical therapy.

Or, an agent can engage in actions of a broader nature, such as applying for Medicaid, creating specific trusts related to asset protection, or selling real estate, all of which may become increasingly daunting tasks for a principal having trouble managing their own financial and legal affairs.

This ties into another essential benefit of the Financial Power of Attorney – a properly utilized Financial Power of Attorney avoids the necessity of a guardianship. When a person can no longer care for their own physical and financial well-being, it is essential for that person’s loved ones to have the ability to ensure their needs are met and their quality of life preserved. Without a Financial Power of Attorney in place, the only way for an incapacitated person to be cared for in this way is for someone else to petition the court to appoint a guardian. It is then the court’s decision who is best positioned to care for the individual, and the court will continue to monitor the guardian and the incapacitated individual (the “ward”) for the rest of the ward’s life, requiring detailed accountings of the ward’s finances and upkeep. This is an expensive, time consuming, and emotionally exhausting process in which the ward ultimately has very little say.

With a Financial Power of Attorney in place, the agent has the authority to ensure the principal’s needs are met before capacity issues arise, and can navigate those challenges once there is a need to do so, with the idea being that the court shouldn’t ever have to get involved. Not only is this situation less costly and more efficient than having to petition the court for a guardianship, it honors the principal’s privacy, better preserves their dignity, and allows them a greater voice in their care.

The third and fourth of the core four estate planning documents often work in tandem, and are together referred to as “Advance Directives.”

A Health Care Power of Attorney is similar to a Financial Power of Attorney in that it allows an agent to make decisions on another’s behalf. However, a Health Care Power of Attorney agent has broad authority over medical decisions when the principal is incapacitated and unable to make such decisions. This authority includes the ability to request or receive otherwise confidential healthcare information, consent or withhold consent to medical procedures or the administration of drugs, or make decisions regarding life-sustaining treatment if the principal is in a permanently unconscious, terminal state.

While the Health Care Power of Attorney nominates an agent to make healthcare decisions when the principal is unable to communicate their wishes, the Living Will declares what those medical wishes are. Specifically, the Living Will allows the principal to state their preferences regarding life-sustaining treatment if they are in a permanently unconscious, terminal state, and their preferences regarding procedures to which they would not consent. In this way, the “Advance Directives” of the Health Care Power of Attorney and Living Will are essential estate planning documents, since they allow you and your most trusted loved ones to retain your voice and control even in life’s most drastic circumstances. They ensure that even if you cannot speak for yourself, your wishes are clear and can be followed.

These core four documents – the Last Will and Testament, the Financial Power of Attorney, and the Health Care Power of Attorney and Living Will – are the cornerstones of an effective estate plan. With these documents in place, you can rest assured that no matter the circumstances life has in store, your wishes concerning your health, your finances, and what you leave behind are clear, and your support network is empowered to uphold those wishes and ensure your well-being. By nailing down these documents, you can easily bullet-proof your estate plan in the new year.