I’ve written before in these columns that having a will allows people to decide for themselves how their money and property will be distributed after their death, rather than to let their state’s “intestacy” laws, with their rigid formulas, decide the matter. Without a will, or without transferring funds or creating trusts during your lifetime, you can’t leave a portion of your estate to friends or to charities , nor can you leave a disproportionate share of your money to one child, even if that child needs it and the others don’t.

But there are limits to what you can accomplish with a will. If you’re legally married, you can’t leave your entire estate to someone other than your spouse—even if you’ve been living apart for decades. Every state has laws that guarantee a surviving spouse a share—usually one-third—of the estate, regardless of what the will says.

In addition, courts will not enforce provisions of wills that are deemed to be against public policy. I’m not exactly sure what “public policy” means, but I do know that courts have refused to enforce all sorts of monetary bequests that come with strings attached. For example, people have tried, usually without success, to leave money to a married child contingent upon the child divorcing his or her current spouse. I also remember the case of a Texas oil billionaire who left a substantial bequest to a particular university, but only if the university fired its football coach, whom the billionaire, a big “booster” of the football program, detested. After a lengthy litigation , the university got the money and the coach kept his job.

People with minor children frequently try to insert provisions in their wills concerning custody and guardianship. While it’s a good, if sobering, idea for parents to think about how their kids will be raised after their death, it’s crucial to understand that custody and guardianship provisions in a will are not automatically binding on the courts.

A single parent, for example, cannot dictate that her child will be raised after her death by her sister or some other relative. If the child’s father is still alive at that time, he will have the right to assert his claim for custody and guardianship. The court will probably give some consideration to the deceased mother’s preferences, but the provisions in her will not be binding on the court.

A similar issue has been in the news recently. The New York Daily News and other media sources have reported that Elizabeth Edwards, the cancer-stricken estranged wife of former Senator John Edwards, is “exploring all options” to prevent her husband from raising their twelve-year-old kids, should he marry his mistress, Rielle Hunter, after Elizabeth’s death. The story went on to say that Mrs. Edwards was “grooming her 28-year-old daughter, Cate, to take over parenting responsibilities when she dies.”

Mrs. Edwards subsequently denied that she is trying to strip her...

Just for fun, raise your hand if you’ve honestly read (and understood) every single “boilerplate” agreement/release/document that you’ve been asked to sign. I’ve got a sneaking suspicion that the majority of you did not raise your hand. 

What’s Black and White and Read Almost Never?

Here’s an example worth mentioning – the “HIPPA Release” that your doctor’s office has you sign prior to your appointment. The Health Insurance Portability and Accountability Act (“HIPPA”), sponsored by Senator Edward Kennedy and Senator Nancy Kassebaum in 1996, was originally created to protect workers in regards to their health insurance coverage when they changed or lost their jobs. Additional rules have since been promulgated and, the particular rules I am referring to in this article are the HIPPA privacy rules. Under HIPAA, health care professionals are prohibited from discussing your physical or mental conditions with anyone, including your spouse, children or other family members, unless you have specifically and in writing authorized the health professionals to do so. 

Consider This…

As I always try to reiterate, estate planning is not only about what happens after you die, it is also about what happens if you become mentally and/or physically unable to handle your own affairs. While medical science and health care are making huge advances with the quality of care allowing us to live longer and healthier lives, accidents happen. Someone at any age could be become suddenly incapacitated. If one of these events happens to you or a close family member, it is generally too late to create the required estate planning documents or make changes to existing ones. Instead, your family and friends will be required to appear in court to appoint a guardian or a conservator (and maybe not the person you would have chosen for yourself) to oversee your affairs. Guardianships are usually an expensive, intrusive and uncomfortable ordeal for families. 

Advanced Medical Directive, Medical Powers of Attorney & HIPPA Release

So then, what should you do, to protect yourself and ensure that your wishes will be honored in life as well as death? 

Advanced Medical Directives are instructions specifying what actions should be taken for your health in the event that you are no longer able to make those decisions due to illness or incapacity. A “Living Will” is one form of an Advanced Health Care Directive. It records your wishes regarding various types of medical treatments, such as resuscitation, life support, artificial feed­ings and organ donation. A “Medical Power of Attorney” (also known as a “Health Care Proxy”) names the specific individual(s) you appoint to make the aforementioned medical decisions on your behalf – again, if and only if, you become unable to do so. I encourage my clients to have both documents in place to provide the most comprehensive guidance and spare family members (who m...

Talk to your family about the elephants in the room – disability, death, funerals, who gets what. You’ll clear the air and, down the road, save your family much grief. But the talk is hard to start; that’s why you haven’t had one. (If you have, you should still read this, smugly.) Sneak up. Write a letter and have your family read it; this will get things started.

The real value of the letter, however, lies elsewhere. We think, and talk, in a flash “I don’t want to be hooked up to a lot of machines.”  Writing, your mind slows, giving your Little Voice the chance to break in, “What are those machines, anyway? What will it be to be on them? Do I really know enough to say I don’t want to be hooked up to one?”  Writing forces you deeper; you may learn things about yourself you didn’t realize. Best writing advice “Don’t write about what you know, write about what you don’t know you know.”

Here’s my letter. Don’t expect brilliant insights or profound self-realizations – I’m a lawyer. Yours will be better. (As a teacher who has his share of disappointments, I know few of you will actually write the letter, thinking “What a great idea. I will write the letter. Tomorrow.” Flash!)

Dear Family,If there comes a time I am ill and unable to make my own decisions, I want my family to make them for me. Docs usually ignore Living Wills and do what the family wants. This makes sense: your family will be in a better position to decide now than you were, 10 years ago, checking boxes, as the lawyer’s clock ticked. 

If you can’t agree it is up to Kris who I have given my Health Care Power of Attorney.

The most important document you can have is the Health Care Power of Attorney. Take my word for it (I’m running out of space). And don’t get a form off the internet. all Powers of Attorney, it’s just a piece of paper unless the folks you show it to believe that it is legally proper. (They can get into trouble if it isn’t.) A lawyer’s bells and whistles, and telephone number, work miracles.

I realize your decision might be to “pull the plug” and remove me from all life support. At some point that is absolutely the right decision. Keeping me alive beyond that is not an act of love.

Don’t keep me alive simply because no one wants to face the bad news. Insist that my doctors tell you my chances of recovery, how long it would take, and what would be my condition afterwards. A good question, “Would it surprise you if he died in the next month?”

In Oscar Wilde’s Importance of Being Earnest, learning that Earnest had died shortly after his doctor told him he was dying, a character remarks “He seems to have had great confidence in the opinion of his physician.” Doctors, perhaps not realizing it was a comedy, are very reluctant to give the bad news. When everyone is in denial, futile, expensive, and painful treatment will continue. One in five die in ICU, hooked up. 

I can live...

In the comedy Raising Arizona, a baby is kidnapped and the father is approached by one mean-looking bounty-hunter who offers to find the baby for him.

“Why should I hire you?” the father asks. “The police are on it.”

“If ya want to find your baby, ask me. If you want to find a donut, ask the police.”

Funny story. But can I make it fit? Sure.

“If you want a free donut, go to a Living Trust Seminar. If you want a Living Trust , go to a lawyer.”

Today’s hot item is the Living Trust , sold by traveling salesmen at free breakfasts. The price ranges from $900 to $1,500. The pitch?

∗ You will avoid probate and won’t need a will!

∗ If you (God forbid!) become incapable of managing your finances, you won’t need a Guardianship!

Save your money. Nine out of ten people who purchase living trusts don’t need them.

There are cheaper and easier ways of accomplishing the same things.

Avoiding Probate

In Dickens’ classic Bleak House a probate matter lasted decades until the entire estate had been consumed by lawyer fees. The book gave probate a bad name and sent law school applications soaring. As I will discuss in another column, there are other ways to avoid probate, by putting your assets in joint ownership with your intended heirs, by making life insurance policies payable to them, or simply giving it away before you die. Even if you have a Living Trust , if have you houses, land, or stocks that have not been transferred to the trust (which can be expensive and complicated), they will still have to go through probate. And besides, Probate is a whole lot better than it was in Dickens’ day (proving, I to think, the power of the pen).

Dealing with Possible Mental Incapacity

Here too there are other ways. You can put the property in Joint Ownership or you can create a Durable Power of Attorney (a DPOA, with “durable” meaning it survives the signer’s mental incapacity.) I will discuss the pros and cons of these in another column.

All of that said, a Living Trust might be right for you. Talk to a lawyer to get it done right and buy your own donut (although that might be risky as well).

The Living Trust of Billy and Sandy Knowles

The assets of this trust shall be used for the benefit of Billy and Sandy Knowles, husband and wife, and shall be administered by them. In the event that they become incapable of administering this trust, it shall be administered by their son, Matthew, or, if he cannot, by the First National Bank. At the death of either Billy or Sandy, this Trust shall become irrevocable. Thereafter, the assets of the trust will be used for the benefit of the survivor. At the death of the survivor, the assets remaining in the trust shall be distributed in equal parts to the then surviving children of Billy and Sandy.

Let’s, as we do in law school, parse the language.

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