The Most Important Estate Planning Document for the Procrastinator
As an estate planning attorney, I encounter procrastination nearly every day. I understand that the attitude of a number of my clients and prospective clients is “I know that I really should finish my estate planning, but I don’t need to complete it today. In fact, if I finish it five seconds before I shed this mortal coil, then that will be soon enough.”
So I spend a lot of time and effort trying to encourage clients to begin the estate planning process and once they begin it, to finish the job. Occasionally, I encounter people who know that the idea of putting together an estate plan is just too overwhelming for them to take on at that stage in their lives, but they want to get started. They will ask me “What is the most important document for me to have right now?”
As someone who has seen the tragic effects of clients dying or becoming totally disabled with no estate planning documents at all, or with outdated or inadequate documents, my first reaction is “I can’t see the future. I don’t know how your life is going to play out. Why don’t you just complete your estate plan now so you don’t have to worry about things like that?”
Of course, that sort of statement very seldom moves any procrastinator off of the dime so I‘ve had to think about that “most important document” question more carefully. Here is what I have concluded:
The client who asks me “What is the most important document for me to have?” is essentially telling me “I have neither the time nor the willpower to complete this process right now. Which document would I most regret not having if tragedy struck before I ever got around to finishing the job?”
While reasonable minds may differ on the answer, I’m going to opine that the most important document for the Procrastinator to have is the Financial Durable Power of Attorney (“DPOA”).
You may find that to be a peculiar answer because a Financial DPOA will do you no good once you are deceased. It is only effective when you become disabled and are unable to act or make decisions on your own behalf.
My reasoning is as follows: First, your regrets about what you failed to do before it was too late to remedy the situation are likely to be more painful if you are alive and able to comprehend the consequences of your inaction. You may argue that if you are too disabled to act, you are not likely to comprehend the consequences of your inaction, but I maintain that somehow, your spouse and/or your loved ones will be able to convey to you that you have let them down.
Second, if you have executed a Financial DPOA and that document is pretty detailed, your Agent will be able to take a lot of actions to mitigate your failure to act. For example, your Agent can use the Financial DPOA to transfer property, borrow money, pledge assets, carry out business or tax planning transactions and the like.
In the Real World, a person who suddenly becomes disabled almost certainly has at least once piece of very important unfinished business. The Financial DPOA lists numerous allowable actions which should encompass most things that a Suddenly Disabled person might have left hanging and so could very well “save the day.”
One caution however: the Financial DPOA usually provides the Agent with a lot of latitude and authority to act. You should give careful consideration about to whom you give those broad powers. If you don’t feel that anyone merits that type of latitude and authority, make sure that the Financial DPOA is restricted to only those powers you are willing to give.
Third, the Financial DPOA does not require a lot of decision-making on the part of the client. The big decision is “Who should I name as my Agent?” Put another way, that question is “Who do I really trust?” If you answer that question “Well, I don’t trust anyone completely. I trust a few people somewhat,” the next important decision is “Which powers am I uncomfortable giving to my Agent?”
If you are fortunate enough to be able to answer the “Who do I trust completely?” question with one or two names, you don’t have to answer the “uncomfortable with giving powers” question at all.
Fourth, my sincere hope is that once the client has finalized the Financial DPOA, he or she realizes that the task wasn’t as difficult as they thought it would be and they can move on to the next step in the process.