You have likely already made a diligent effort to choose a knowledgeable financial advisor and create a sound financial plan, whether that means starting a college savings fund for your children or saving for retirement. However, more than likely, the financial plan you built with your financial advisor does not necessarily consider what you want to happen in the event of your incapacity or upon your death. So, what happens to a Nebraska resident that does not have these important estate planning documents?
The state of Nebraska, in its generosity, creates a “will” on your behalf, and the laws of intestacy dictate who gets what. But what does Nebraska law really say? Well, that all depends on your then living heirs and the total value of your estate. For example, if you are a married person with no children, Nebraska law says the first $100,000.00 plus one-half of your remaining assets go to your surviving spouse, and the balance of your assets go to your parents. For a married person with children, Nebraska law says the first $100,000.00 plus one-half of your remaining assets go to your surviving spouse, and the balance of your assets get distributed equally amongst your children, so long as all your children are also children of your surviving spouse.
If these state laws surprise you, or if they do not reflect the plan you envisioned, do not let the State of Nebraska dictate these things for you. Be diligent in your planning and consider executing these very important documents, not only for yourself, but also for your loved ones.
When it comes to estate planning, most people are familiar with the concept of a Will. However, in addition to a Will, there are many other essential documents that you should consider, and we will discuss each in greater detail below.
Last Will and Testament. What comes as a surprise to many is the fact that a Will is much more than just an instrument detailing who you want to inherit your property. A Will is a legally enforceable document stating the “who, what, and when” upon your death. In a Will, you will consider things such as:
How your estate will be distributed;
Whether you want to include any bequests to specific individuals or charities, or in the alternative, whether there are individuals you would like to disinherit;
Who you want to take care of your minor children, if any;
At what age or ages you want your children to receive their inheritance and whether you want to set conditions for asset distribution;
Who you want to wind up your affairs and handle your property after death; and
Where you want your property to go in the event you die without any living descendants (i.e. children, grandchildren, etc.)
Power of Attorney. Although this document may take many forms, all Power of Attorney documents allow another person to make decisions on your behalf during your lifetime. Giving a person you trust a power of attorney gives them the ability to advocate for your medical needs or make necessary legal and financial decisions for you.
An agent under a Durable Power of Attorney for Financial Affairs (“Financial DPA”) is appointed by you to act on your behalf regarding your property, business, and financial affairs, among other things. Your agent is legally permitted to perform acts that you designate, whether that be limited powers, or all powers to the fullest extent allowed under the law. An example of such powers includes simple tasks, such as paying bills and depositing checks, or more complicated tasks, such as managing your real estate, investments, or business interests. Unless expressly stated in the document, the agent may act even while you, the principal, have capacity.
Should you not have a Financial DPA in force in the event of an incapacity, it is very possible that your family will need to petition the court and ask a judge to establish a conservatorship for you. In addition to being labor intensive, court proceedings are also costly and typically require the assistance of an attorney. Oftentimes, the situation that calls for a conservatorship also requires immediate action. Of course, as with all fiduciary appointments, who you name as your agent needs thoughtful consideration, such as whether the person is capable of managing your assets, can be diligent when carrying out actions, and fully understands your wishes. Furthermore, you must consider who you want to serve as a back-up in the event the primary agent is unable or unwilling to fulfill the role.
An agent under a Health Care Durable Power of Attorney (“Health Care DPA”) is appointed to make health care decisions for you in the event you are unable to make health care decisions for yourself. If you want the agent to have authority regarding life-sustaining treatment, the authority must be expressly stated in the Health Care DPA. In the alternative, you may choose to execute a Living Will and expressly state your wishes to refuse life-sustaining treatment. You may also express your wishes regarding organ donation within the Health Care DPA.
If you have questions regarding the aforementioned documents, or are interested in more information about Trusts (which is another highly sought-after method of estate transfer), please reach out to any of Erickson & Sederstrom’s highly knowledgeable and experienced estate planning attorneys at (402) 397-2200.