End of life planning can be intimidating and stressful, but it’s very important. Here are some common questions about estate planning, and answers to help make a difficult process a little easier.
Most laws about estate planning vary from state to state. SixFifty is a Utah company, so some of these details are specific to laws in Utah. We’ve made sure to mention which items are specific to Utah.
Why is estate planning so hard?
One reason it’s so hard to write a will is that it means thinking about your own death. Nobody likes to think about death, much less about their own. But we all die, and the work that you put in now can ease the pain of your passing for the people you love the most. Creating a will, power of attorney, and advance health care directive helps your loved ones understand your wishes and make difficult decisions about your health, your money, your remains, and everything else that you leave behind.
That means asking yourself a lot of questions. “Where do I want to be buried?” “Who should take care of my children?” “What do I want my family to keep, and what should they discard?” Those are the easy questions. You also need to ask “What if I’m on life support and will never recover?” FreeWill 650 guides you through all of these questions, with helpful resources and explanations.
Estate planning is also hard because it’s a legal process. That means there’s a lot of legalese to translate, and hiring a lawyer can be expensive. It means you have to create forms that can be confusing and repetitive. Those are problems that technology is good at solving. FreeWill 650 explains legal terms and asks you questions the way a lawyer would, and uses your answers to fill out all of the paperwork you’ll need.
Here are some of the most common questions about estate planning, and helpful answers.
What is a will?
A last will and testament, or “will,” is a document that summarizes how your money and property should be distributed after you die. It includes instructions about your assets, debts, and final wishes. Laws about wills vary by state, but most wills have many things in common. Since a will distributes your assets, most wills outline who should receive what. Someone needs to make sure that your last wishes are followed; they’re in charge of your will after you die. That person is called a “personal representative” or “executor.”
A will can be very complex or very simple, and there are no official forms or templates that you have to follow. Your will can have as many details or as few details as you want. But it’s important to think about why you’re creating a will, what you want it to accomplish, and then create a will that meets those needs. FreeWill 650 is a free resource for creating a will, power of attorney, and advance healthcare directive for people with basic estate planning needs. If your estate planning needs are complicated—for example, if you own real estate in multiple states—SixFifty recommends that you consult with an attorney to ensure that your estate planning documents are prepared properly.
Most wills include:
- Appointment of your personal representative, also called the “executor” of your estate, plus backups if that person can’t do the job
- Monetary gifts to be made before your estate is divided
- Beneficiaries of your estate (who will get your stuff)
- Details about your family—especially if you have a spouse or children
- Funeral requests
- Names of people who witnessed you signing your will
In Utah, and in many states, a will is legally binding when it is signed by the “testator” (the person making the will) and signed by two witnesses. Wills also frequently include what is referred to as a “self-proving affidavit” that needs to be notarized, which will help speed up the processing of your will after you die.
Why do I need a will?
If you die without a will, your money and property will be distributed to your surviving family (spouse, children, parents, siblings, etc.) according to the laws of your state. The court will also appoint a guardian if you have any minor children. If you are worried that the default laws of your state will not carry out your wishes, or may fail to act in the best interest of your surviving minor children, you should create a will. Creating a will can also give your surviving loved ones confidence that your estate was distributed in accordance with your wishes. If you don’t plan for your death, your family and friends will need to figure everything out themselves—instead of having time and space to grieve. A will helps your loved ones understand your wishes, so that they can honor your life the way you want.
What is an “estate”?
The IRS defines your estate as “an accounting of everything you own or have certain interests in at the date of death.” In other words, your “estate” is just a fancy word for “all of your stuff left over after you die.” Certain interests, like life insurance payments or joint ownership of real estate, will not be included in your estate because those interests already specify the person who will receive the interest after you die. In other words, all your money, property, and other interests that don’t already have legally binding plans for after you die will be included in your estate.
What is a trust?
A trust can be a lot of things. In estate planning, a trust is just an arrangement between a grantor, who creates the trust and transfers assets into it, and a trustee, who manages the trust according to the terms of the trust agreement. Individuals who may receive benefits under the trust are referred to as beneficiaries. Some people choose to create a revocable trust (sometimes referred to as a “living trust”) so that their assets will not be subject to the legal or judicial processing of their estate after they die known as “probate.” FreeWill 650 does not help people create a trust. If you want or think you need a trust, you should consult with an attorney.
What is a Power of Attorney?
There are many kinds of power of attorney, and the laws about what they can do and what paperwork you need will vary by state. Broadly speaking, a power of attorney, or “POA,” gives someone else the ability to make decisions for you and sign legal documents for you. That person is called your “agent” or “attorney-in-fact.”
FreeWill 650 is built around Utah law. The power of attorney document generated by FreeWill 650 is the same document you can download from the Utah Court’s website and becomes legally binding when you sign it and have it notarized. Just like your will’s Personal Representative, you can designate backup POA agents in case your first choice can’t do the job. Generally speaking, the people you designate as your Executor and backup Executors can be your POA agent and backup agents. You can give someone broad authority over many aspects of your life, or you can give them only very specific authority, so it’s important to carefully consider which options to choose.
Why do I need a Power of Attorney?
When you can’t make decisions for yourself, your loved ones need to do it for you but they may disagree. A Power of Attorney lets you decide exactly who will make decisions for you and it gives them guidelines about how they should make those decisions.
What is an Advance Health Care Directive?
Like a Power of Attorney, laws for an Advance Health Care Directive vary by state and FreeWill 650 is based on the state of Utah. You may see an Advance Health Care Directive referred to as a “Living Will,” “Advance Directive,” or “AHCD.” Like a Power of Attorney, you can designate someone to make healthcare decisions for you, and this person is also called your “agent.” For clarity, we’ll call this person your “Health Care Agent.” Generally speaking, your Health Care Agent can be the same person as your POA Agent. There are some restrictions about that under Utah Law though. Your Health Care Agent cannot be your healthcare provider. They also can’t be an owner, operator, or employee of the healthcare facility where you’re receiving care unless they’re related to you by blood, marriage, or adoption.
The Advance Health Care Directive generated by FreeWill 650 is based on a document you can download from Utah’s Commission on Aging and becomes legally binding when signed by you and a witness. If you are unable to sign the document, you can agree to it orally and someone else can sign for you. Utah Law indicates who your witness can be. The witness who signs your Advance Health Care Directive cannot be:
- The same person who signed your Advance Directive for you (if applicable)
- Related to you by blood or marriage
- Entitled to any portion of your estate
- The beneficiary of any of your life insurance policy, trust, or other “pay on death” accounts or property
- Entitled to benefit financially from your death in any way
- Directly financially responsible for your medical care
- A health care provider who is providing care to you, or an administrator at a health care facility where you’re receiving care
- Your Health Care agent
Why do I need an Advance Health Care Directive?
Some of the most difficult decisions your loved ones may have to make will be about your health in the event you are incapacitated and cannot make decisions for yourself. These decisions can be painful and controversial, especially if your loved ones don’t agree. For example, if your life can be prolonged but it will cause you pain and won’t improve your quality of life, your loved ones may find it very hard to decide what you would want. It’s so much better for them, and for you, to put that all in writing first. An Advance Directive can be time consuming and uncomfortable, because it asks questions you may not have considered before. Do you want your life extended at all costs? If not, when do you want your loved ones and healthcare providers to remove life-saving measures? When you’re in a vegetative state? When you can no longer recognize your family? These are painful questions to think about, but they’re very important. And FreeWill 650 makes it as easy and streamlined as possible.
Is an advance health care directive the same as a DNR or POLST?
An advance health care directive is not the same thing as a DNR or POLST. A POLST is a Provider Order for Life-Sustaining Treatment. Some people refer to a POLST as a “DNR” or “Do Not Resuscitate.” A POLST serves the same purpose as a DNR, but is more comprehensive. It is something your medical provider will fill out with you. They are intended for seriously ill or frail individuals. You can learn more about POLST and DNR here, and you can see Utah’s POLST form here.
How do I know if my estate is worth more than $100,000?
FreeWill 650 will ask you if your estate is worth more than $100,000. Using the IRS’s definition of “estate,” the value of your estate is determined by calculating the current market value of everything you own and have an interest in. Some of those numbers are easy—like the balance in your bank accounts.
For most people, the majority of their wealth is in their home. Specifically their “home equity.” That’s the difference between what your home is worth and what you still owe on it. So if you owe $300,000 on your home, and it’s worth $370,000, then you have $70,000 in home equity. If you’re like most people, your home equity is the biggest part of your estate.
What is FreeWill 650?
FreeWill 650 is a free tool to plan for the end of your life, including circumstances where you can’t make decisions for yourself. We worked with estate planning attorneys and other experts to create a tool that generates all the documents you need for simple estate planning. The result is an easy-to-use tool for generating a simple Will, Power of Attorney, and Advance Health Care Directive.
We’re here to help
SixFifty’s free tools like FreeWill 650 are made to advance our mission of making the law accessible for everyone. We never ask for payment and do not store, sell, or profit off of the data you provide to generate documents with our pro bono tools. If you have questions about our pro bono tools, contact us at firstname.lastname@example.org.