You booked the flights and hotel room months ago. Hours were spent planning your week-long itinerary down to the very last minute. The bags are packed, kids are officially ditched with the in-laws, and you’ve Ubered it to the airport just in time to catch your flight to paradise.
What you really want to be doing in this moment is leisurely sipping a latte at the gate while you prepare to board the plane. Instead, your better half looks over at you in the Starbucks line and casually says, “So what happens to the kids if this plane goes down somewhere over the Pacific? Do we have our shit together honey?”
Fear enters your heart. You suddenly realize you’ve spent countless hours planning your first vacation away from the kids, yet you’ve failed to take care of the most important thing. You’ve failed to plan for and protect your loved ones in the event the unthinkable happens.
Questions begin to pop into your mind. Who would watch over the kids if something terrible happened to you? What happens to your money? What happens to the house? Why didn’t you finish that life insurance application when you had the chance?
Don’t let this moment happen to you.
We want to make sure you can hop on that plane to paradise with all the confidence in the world, knowing that your loved ones will be well taken care of in the event some kind of tragedy occurs. If that’s what you want too, we recommend you get the following six documents in order now.
1) Trust Fund
Wait. Aren’t trust funds just for rich kids who have such huge family estates they have no need to ever work a day in their life? Not at all.
Revocable living trusts provide privacy for your family, can help avoid probate, and should allow your assets to not only go to whom you want but also when you want. If you have any assets at all, whether large or small, it’s a smart move to consider creating a living revocable trust.
Try thinking of your trust like this. Imagine you take all the things you own and put them in a box. This box is your living trust fund. While you’re alive, everything in your box is yours and you can do with it as you please. You will also name someone, called a trustee, to take care of your box in the event you’re unable to yourself. This trustee would pay your debts and distribute your assets according to your instructions. No probate. No added costs. And everything is kept private.
2) Pour-over Will
If you have minor children, you need to think about appointing a guardian who would step in and look after your children in the event you were no longer around. Would this be your in-laws? Perhaps a sibling or a close friend? Take the time now to talk about it with your partner or spouse and make a decision together. This guardian would then be named in your pour-over will since that’s not something you can actually handle in the trust.
So why is this document called a pour-over will? Take a moment to think back to our previous example of your box or trust fund. What if you forgot about something of value that never actually made it into the box? The pour-over will acts as a safety net for anything left outside of the trust fund, so when you’re no longer around it will help facilitate taking those assets and pouring them into your living revocable trust.
3) Temporary Guardianship
You’ve already handled long-term guardianship in your pour-over will, but you also need to make sure someone can act as a guardian for your children should you become incapacitated while temporarily out of town. A basic temporary guardianship form can handle this. It’s nothing too complex, yet when notarized and left with your children’s caretakers, it will allow the temporary guardians to sign things like permission slips or other school forms if needed.
4) Medical Release
For any non-emergency medical or dental care, temporary caregivers looking after your children will need a medical release form so they can get access to medical information or request necessary medical care for your kids. Similar to the temporary guardianship form, this isn’t a complicated document, but it’s one you certainly want to have signed and notarized before skipping town.
5) Financial Power of Attorney
If you become incapacitated for some reason, you’ll also want to know that your financial matters can be handled by someone you trust. The Financial Power of Attorney document names this individual and gives them the specific authority to handle a wide array of financial matters as soon as you’re in need of assistance. In many cases people choose to tie these powers to their successor trustee in order to provide access to all assets both in and out of the living revocable trust.
6) Advance Healthcare Directive
Who do you want making healthcare decisions for you if you became incapacitated? Appoint this person in your Advance Healthcare Directive, and then be sure to have a serious conversation about exactly what your wishes are. It may seem like a nuisance now, but trust us – this is something you want to think through well before the time it’s ever needed.
How to Get Started with Your Trust Fund
Once you’ve completed these six documents, you’ve prepared for both the long-term and short-term needs of your family. You’ve also eliminated a bunch of potential vacation-wrecking anxiety for you and your spouse so you can sit back, sip your latte at the gate, and simply dream about the glorious week of freedom that lies ahead of you sans kiddos.
But how would you actually get started with your trust fund and will in today’s world?
Well, you would most likely begin by searching for a reputable estate planning attorney, getting some price quotes, and setting up an appointment to meet with the one you like the most. Then, after meeting and answering a boatload of uncomfortable questions about your family and finances, you would begin the painful process of emailing various documents back and forth until you reached a final version, printed it, signed it, notarized it, and snail mailed copies to your attorney. Keep in mind you still haven’t even begun the process of actually funding your trust yet, which is an entirely different hurdle to overcome!
Rest assured the entire process is zero fun, extremely confusing for most people, takes way too long, and is way too expensive. Perhaps that’s why, according to a 2016 Gallop Poll, only 44% of Americans say they have a basic will. For revocable living trusts, we believe the percentage is likely less than half that number too.