One of the most important things we can do for our loved ones is prepare for the day when we will no longer be there to care for them. Estate planning is something everyone should do, but having an up-to-date estate plan in place will be even more important if you are unexpectedly injured or killed in a disaster. This section reviews some basic estate-planning considerations.

Estate-Planning Documents
Your “estate” is everything you own, and you need estate-planning documents to ensure that everything you own is distributed according to your wishes. In addition, these documents cover your health-care wishes and who should care for children and pets.

How do I plan my estate?
It is a good idea to hire a lawyer to help you set up your estate plan. In particular, if your issues are complex or you have a large estate, be sure to use a lawyer who is thoroughly experienced with estate-planning methods and techniques. If you don’t have money to pay a lawyer, call a legal aid clinic or a law school and ask if they can help you for a reduced rate or free.

Consider getting the following estate-planning documents in place. You can always change them. The important thing is to get them done as soon as possible. Then, be sure to tell someone where the documents are located.

1. Living trust and/or will. The most crucial document is a will. It names your heirs — the people you want to receive your money and other possessions when you die — and appoints a guardian if you have young children. If you don’t have a will or trust, make them a priority. If you die without one, the state will decide who will get your money and who will take care of your children. Note: Originals of wills generally should not be kept in a bank safe deposit box, because the box may be temporarily sealed after a death. Keep original wills with your lawyer or in another safe, accessible place.
2. Durable power of attorney. This document names the person (or other entity) you want to pay your bills and manage your money if you become ill or incapacitated and are unable to make these types of decisions. The person or entity working on your behalf is your representative, also known as your attorney (not to be confused with your lawyer).
3. Health-care proxy. In a health-care proxy, you name a person who will make decisions about your health care if you get sick and cannot make those decisions. Make sure your doctor has a copy of your health-care proxy.
4. Living will. A living will explains what types of medical treatment you want, or don’t want, if you get sick and are unable to communicate your wishes.
5. Beneficiary documents. If you have life insurance, a retirement account, or certain other types of investments, you must name beneficiaries—the person(s) or trust(s) that will inherit the money if you die. The beneficiaries you name will override any statements in a will, so check that your will and beneficiary designations agree with your wishes. Review your beneficiary designations once a year or whenever there is an important change in your life, such as a marriage, divorce, birth of a child and death.
6. Other options for distributing property. In addition to a will, trust, and beneficiary designations, consider other options for passing your property to your loved ones (such as an instruction letter concerning disposition of property). For example, if your car, house, or bank accounts are in your name only, the asset will go into your estate and will be distributed according to your will during probate (the legal process of settling an estate). In contrast, if you own the property with someone else as a joint tenant or tenants by the entirety, the asset will bypass probate and go directly to the individual named. Similarly if you have a bank account with a payable-on-death provision, the money will go to the person you name, rather than into your estate. Because these actions have legal and tax implications, discuss them with your lawyer, CPA financial planner or other financial adviser before making a decision.

What about a letter of intent?
A letter of intent is not a legal document, but it can be very helpful in telling other people where things are and what you want to happen at your death (or if you are seriously injured and unable to communicate your wishes). Use a letter of intent to write down:

• Where important documents are located.
• The names and phone numbers of your financial and legal advisers, your employer, and other people your loved ones may need to contact.
• Your wishes for your funeral and information about any pre-paid burial plans.
• A financial inventory to explain to your loved ones what income, investments, or insurance proceeds they can expect to receive, and what expenses and other bills may come due. Include information about retirement plans, employee benefit plans, employersponsored life insurance coverage, vacation pay, and business expenses that may not have been reimbursed, personal property you keep at work, car loans, home mortgages, and so on.
• Your wishes for raising and educating your children and any financial arrangements you have made to accomplish these goals.
• Your wishes for your pets.

Some people put their letter of intent in a three-ring binder with pocket pages, so they can include photographs, business cards of financial and legal advisers, and photocopies of important documents, such as a will, power of attorney, Social Security card, employee benefits records, and so on.

Think of a letter of intent as something that you would give to someone if you were leaving on a year-long trip tomorrow morning. Make sure the letter of intent is stored in a safe place and be sure to tell several people where it is. Even better, share copies of your letter of intent with anyone who would be involved in managing your affairs if you were killed or seriously injured in a disaster.

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Estate Planning and Disability
Although everyone needs to do estate planning, it’s particularly important if you have a child with a disability. Use these documents to ensure that your child remains well cared for.

My child has a disability. Should I name a guardian?

In your will, you named a guardian for your young children until they reach the age of majority, which is 18 or 21 depending on the state of residence. At that point, your children are considered by law to be adults and are entitled to make their own decisions — regardless of any disability — unless certain documents are in place. These documents could include a court-ordered guardianship, which gives a parent or other responsible adult the legal right to continue to make financial and other decisions for a child with a disability after he or she reaches adulthood. Naming a durable power of attorney for an adult child is another option.

If you and your child believe that either a guardianship or a durable power of attorney would be in the child’s best interests, talk with your lawyer about how you can make those wishes known in your will. Whenever possible, make sure your loved one participates in choosing who should serve as a guardian now and in the future.

When should I consider a special needs trust?
A special needs trust might be used in situations in which you want to leave your disabled child money or other assets when you die, but you don’t want to jeopardize the child’s ability to qualify for government programs that are based on financial need, such as Medicaid or Supplemental Security Income (SSI).

When set up properly, a special needs trust may be able to pay for items that are not paid for by government programs, thus protecting the child’s eligibility for government benefits. For example, the trust may be able to pay for home repairs, education, a computer, and vacations. However, the impact of a special needs trust on a child’s eligiblity for government benefits varies from state to state.

Another advantage of a special needs trust is your child is not faced with the burden of managing a large sum of money or other assets on his or her own.

If you decide to pursue this option, work with a lawyer who is familiar with the rules regarding assistance programs for people with disabilities. Also be sure to alert anyone else who might leave your child an inheritance, and ask them to leave the inheritance to the trust instead.