Where there's a will, there's a way...to keep the gubmint from tekkin' all mah moneys.
Well...maybe not all my moneys. And I don't have much moneys to begin with. But of the moneys I have, I wish more of it to be distributed to my family, upon my death, than to the government. Seems simple enough, right? Wrong.
How does one keep the government from slicing too far into the dead man's pie? Can one set up, in advance, such documents and legal structures as to attempt to distribute the bulk of the man's wealth to his relatives and not to his government? To an extent - yes.
Last week, I visited a lawyer recommended to me for the express purpose of estate planning. It does not take much estate before it behooves one to start planning for its disposal. As of this year, it is likely that should I sell my house, I'll get back what I paid for it and then some. Possibly quite a bit more. And the longer I live, the more money will result from its sale, as I slowly chip away at the mortgage. Beyond my house, I have literally no assets beyond a couple of small bank accounts. But one must also plan for a time when there may be significant assets indeed.
Side note: I have a term life policy that will pay enough benefits upon my death to assist with the expenses of ... well, clearing out my life. Sell the house, sell or move my stuff, the endless hassle of contacting all of my known accounts (banking, online, etc) and serving them with death certificates, closing things down...getting me buried. Somewhere, in a Terre Haute cemetery, I already have a burial plot. The paperwork is around here somewhere. And I'm making sure there's enough moneys to pay for that process.
But what can I give to my mom, my siblings, my nephew and niece after I die? Not a lot, but some.
And so, with help from the lawyer, I now have a series of documents meant to protect me and aid my family in conducting my affairs from a time when I become unable to do these things for myself (for whatever reason) clear through death. Suze Orman covers a lot of this here.
Spring Power of Attorney
This simple document empowers a named person with the legal authority to conduct one's affairs in one's absence given that a specific event has come to pass first. In this case, it kicks in after a doctor certifies that I am no longer in condition to conduct my own affairs and expect to be in that condition for an indefinite period. (i.e. turned into a vegetable by one too many episodes of Here Comes Honey Boo Boo) It names a primary and two alternates, in definite order. VERY IMPORTANT. Why? Let's say I go in for transplant and due to complications in recovery I have to be kept in a coma for an extended period of time (I know of a case where he was under for 30 days!) In that period of time, someone should be able to have the legal authority to go online with my passwords (yes, I'm giving that one person a list of my critical accounts and their passwords, or where to find them) and pay bills. Keep the lights on. That kind of shit. I also need to put together a list of desirable medical actions to take under various circumstances. A living will, in short.
This document - not simple at all - passes ownership of my house from me, personally, into a Trust, of which I am the steward and have power to revoke. This has certain key benefits - one being keeping the house out of probate upon my death. And another is that should I become incapacitated and need to apply to Medicaid, the house is not counted as part of my wealth, although estate taxes still count it. I have two bank accounts that will probably also eventually end up in that trust, especially if I can start saving anything significant in the next couple of years. If I were older and were living in my last house, I would consider an irrevocable trust. The trust is the key to maintaining a family's wealth within the limits of the law. Whether you want revocable or irrevocable is a decision that is up to you.
The signing of this document was actually half a dozen documents; as this was the transfer of a hosue, it was also a closing.
Last Will and Testament
This should really be the Latest Will and Testament, as it is my first but probably won't be my last. But this will lays out how my assets are to be handled after my creditors are paid; what assets not already in the trust. This makes it a pourover will. It looked a lot like the Trust documentation. It got a little bit complicated here, only because I wanted to be fair to my family and help provide for niece's and nephew's educations. It isn't a perfect document, because it is too difficult to predict the future. But it will do for now.
So I have many things left to do still to fully flesh out the legal documents with the errata of the small-change stuff, like specific bequests, wishes regarding heroic measures, and the like. I'll get there.
But today I at least feel like I accomplished something. And I didn't have to spend a hundred hours online researching it all nor fill out boilerplate documents and have doubts about the legal fine points. Yes, it cost money to get all this done. But for the stress-free process, it's worth it.