Amid the grief of losing a loved one, families are dealt additional burdens when the person did not leave behind a will or estate plan.
Lack of one can open the door to family disputes or significant court costs to settle an estate. But only a little more than half of Americans over 55 have a will, according to a 2019 survey by Merrill Lynch.
Collette Davis, an estate planning and probate attorney in Charlotte, N.C., tells her clients it's critical to put their wishes in writing so that health care and financial decisions are handled responsibly at the end of their life.
"This is the best thing they could do to help their family and eliminate any kind of discord down the road," she said.
It can help with the most routine aspects of settling someone's affairs or provide additional protection for more rare occurrences. Davis laid out three key steps to take when estate planning, though others may be necessary for someone's specific financial, health or family situation. She recommends that everyone:
- Create a living trust. A living trust lays out plans for someone while they are still alive and after death, including instructions for medical care and how to divide up all assets, including property, businesses and investments.
- Write a will. While most of the directives should be covered in the living trust, Davis said, writing a will can serve as a back-up document to lay out how property and other assets should be divided.
But what about handwritten wills? Davis said wills that are entirely in someone's own handwriting — not anyone else's — that are signed and dated can be valid. However, it can be disputed in court if there are questions about its authenticity.
- Designate health care and financial powers of attorney. This person or people will make decisions about your medical decisions and finances if you are incapacitated.
The AARP offers a checklist outlining other decisions to make, including establishing guardians for minor children and confirming beneficiaries on insurance policies and retirement plans.
Without a plan, families risk losing hard-earned wealth, said Alesha Brown, a Charlotte attorney. Many clients want to know: "How do we protect mom and dad's property?" Brown said.
"We see a lot of folks who are selling their property for a ridiculously low amount because they're getting cash offers, not even realizing their home is worth sometimes two to three times more," she said.
Lindstrom writes for the Charlotte Observer.