What is a “Simple Will,” Anyway?
One of the most common things clients tell us they want is a “simple will,” which shouldn’t be surprising, given how ubiquitous that term is among the will-in-a-can websites, the DIY estate planning community, and the media in general. But what, exactly, is a “simple will”?
It turns out that “simple will” tends to have so many meanings, that it really doesn’t mean anything, at all. For clients, our experience is that it tends to mean, “a document that will dispose of all my assets when I die, and avoid probate.” The problem is, that document doesn’t really exist - at least not in the sense that clients want it to (more on this below). For online will-makers, the term tends to mean, “a fill-in-the-blank document that says ‘Last Will and Testament’ at the top, and only gets a few minutes’ worth of review by an attorney to make sure there are no giant red flags (if you’re lucky). And these are just the most common meanings, we have seen “simple will” mean anything from, “divide up my stuff like this,” to, “I want to make very specific gifts to very specific people, but only under certain circumstances that may or may not actually be enforceable by a court.” The lack of standardization for this term, of course, is a constant challenge, and it’s the reason we try to avoid it as much as possible. Instead, we offer clients a “will package.” Our will packages include:
Last Will & Testament (obviously);
Healthcare Power of Attorney / Healthcare Directive;
HIPAA Release;
Financial Power of Attorney;
Schedule of Assets; and
Instructions for Keeping and Maintaining Your Plan.
Let’s take a look at what purpose each of these serves.
Last Will and Testament
This is the central document in a will-based plan, and it’s the document that most people are familiar with as being the one that says who gets your stuff when you die, who the guardians of your minor children should be, etc. However, despite popular belief, a will does not avoid probate. In fact, the entire purpose of a will is to serve as a set of instructions to your personal representative and the court in a probate proceeding. Although there are other types of plans (trusts, for example) that avoid probate, we always counsel clients not to be afraid of a plan that involves a probate proceeding. It’s not always the best solution, but it’s not a four-letter word, either.
Healthcare POA / Healthcare Directive
Likely the second-most familiar documents on the list, these are two documents that are simple in concept - but can be challenging in execution. Conceptually, they designate a person to make medical decisions on your behalf if you are not able to do so (called a “healthcare decisionmaker”), and give them instructions on how you’d like those decisions to be made. We work with our clients to identify the people best suited for this role, and help craft a document that gives them the guidance they need to honor their wishes.
HIPAA Release
The HIPAA Release is an often-overlooked document that is nevertheless crucial for an estate plan to work as intended. This document allows your medical providers to release your healthcare information and records to the people you designate - without it, they are legally prohibited from doing so under most circumstances. It doesn’t take much analysis to see, then, that a healthcare decisionmaker should probably be listed on a HIPAA Release in order to do their job competently. We also encourage clients to think about who else should be included on this release: Parents? Children? Siblings? Close friends? These can vary from person to person, and there are reasons to both include and exclude people from this list which are beyond the scope of this article.
Financial Power of Attorney
If the HIPAA Release is the most overlooked document on the list, the Financial Power of Attorney is the most deceptively powerful document on the list. This document serves the simple purpose of letting you designate someone to handle your affairs on your behalf. While this sounds simple enough, it includes the right to do things like make banking transactions, buy and sell real estate, trade stocks, handle litigation, etc. These are all things that, if not handled properly, could have a huge impact on your life and finances. This is a deceptively large potential impact for a document that’s only six pages long. Thus, despite the brevity of this document, we spend more time than one might expect counseling clients on who might be a good choice for this role, and what limitations might be necessary to place on their authority.
Schedule of Assets
This one, though important, is pretty simple: It’s simply a list of all the major assets you own and how to locate them. It’s purpose is to answer another simple, yet vexing question that many of our probate clients have: Where do we find all the assets? Think about it, if you nominate your adult child as your personal representative, do they know who your mortgage lender is? Where you bank? Where to find your retirement assets? They likely have an idea that these things exist, but we can help them tremendously by giving them a list of where to look for them - which can be an unexpected blessing in a time of grief.
Instructions for Keeping and Maintaining Your Plan
Lastly, we send you home with a set of instructions for keeping and maintaining your plan. There is nothing worse for a grieving family than not being able find a will, or - worse yet - a healthcare power of attorney, when it is needed. Likewise, finding a will that is 30-plus years old, with assets that no longer exist and gifts to people who have already passed is not particularly helpful, either. While we check-in with our clients periodically to make sure that everything is up to date, we find that estate planning clients who are the most proactive in doing this have the least-stressed families when it comes time to execute those plans.
So, what is a simple will? Well… our definition is that it’s not as simple as that. If you want a plan that will actually be helpful to you and your family when it comes time to execute it, a will alone is not even close to enough. While that’s not typically the answer people want to hear, we can help you through the process of putting it all together. Contact us today to learn more.
