The Importance Of Estate Planning: The WillSunday, February 28, 2021
Thought is often given to planning and managing your financial goals, but what happens to those goals after you die, or become incapacitated? If you have family, dependents and even friends; it's critical that you have a legal plan to ensure that your wishes for the distribution of your assets are carried out.
Why estate planning?
Estate planning is the process by which a person, while they are alive, anticipates and arranges for the management and disposal of their estate in the event of death or incapacitation. Many people find this topic uncomfortable, whilst others are plain superstitious, thinking that by talking about these things attracts “bad luck”.
There are some people who mistakenly feel that estate planning is the purview of the wealthy, with the term “estate” signifying, in their minds, untold riches and therefore not applicable to them. But the term estate is a financial one which means anything that comprises the net worth of an individual. Simply put, it is the possessions owned by somebody. These possessions can include personal property, land, real estate, financial securities, collectibles, cash, and any other asset the individual owns outright or has a controlling interest in.
There are a few key elements of estate planning, including setting up a trust, establishing a financial power of attorney, and creating a will. Our focus today is the will, of which there are two types: The last will and testament, and the living will.
Last will and testament
Do you own a home, even if it's a teeny apartment? A car? A plot of land a relative left you? Even rare coins or seemingly innocuous things such as art or stamps, baseball cards? These are assets that need to be protected in the event of your untimely and unfortunate demise. Protected from what? From Government possession and squabbling relatives, if you die intestate, or in other words, without a will. As we who live in this country know all too well, death often brings out the worst in family. Making a will allows your loved ones to avoid the lengthy probate process, and while doing so, articulate very clearly what your intentions in fact are for them after you pass.
If you have no spouse or direct descendants, and you have possessions like real estate, think about leaving these things to a trusted relative or friend in a will because, under Jamaican law they will go to the Government if you die intestate.
If you have children, a will is also critical in creating a chain of legal guardianship in the event of your passing. Who should take care of them if they are young? How should they be educated? If they are older, what possession or keepsake do you want them to have? Also, if you are in debt, a will is essential for preventing your children being separated from their inheritance as a result of the seizure of your assets by your creditors.
Tip: The best time to make a last will and testament is as soon as you start undergoing significant life changes. For instance, when you get married (or divorced), have bought a house, or have had a child. Every time something in your life circumstances changes, it's important to update this last will and testament. Don't think that you're too young, that you have all the time in the world. Remember, life happens in a flash, so does death, and often at the most inopportune time.
A living will, also known as a health-care power of attorney, on the other hand, is a legally binding document that gives a trusted friend or relation the power to make health-care decisions for you in the event you become incapacitated but not yet dead, terminally ill or unable, for whatever medical reason, to communicate. It is basically a directive to doctors advising them what your wishes are with regard to end-of-life care.
Recent PAHO/WHO research has revealed that Jamaica is facing rising rates of chronic diseases, such as heart disease, diabetes, and cancer, resulting in an increased need for long-term care despite a high life expectancy of roughly 74 years. This means an increased possibility for incapacitation for a good part of the population.
Years ago, a hallmark medical case came to prominent international attention involving Terri Schiavo, a 41-year-old American woman who languished in an irreversible persistent vegetative state and whose parents were pitted against her husband in a court battle, regarding what her medical wishes were. Had she had a living will at the time of her cardiac arrest in 1990, she would not have stayed in that coma until 2005, when her feeding tube was eventually removed.
Tip: Drafting a living will takes the pressure off family members when life-or-death situations present themselves, making it easier to take the hard decisions, and also assists in the avoidance of potential family conflicts. It is advisable to draft both the last will and testament and living will at the same time.
While medical incapacitation will not happen to everybody, death is a road guaranteed for all, sooner or later. Make a plan now for how you want your possessions to be distributed when you are no longer able to do so.
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