I survived the January 12, 2010, earthquake in Haiti while some of my friends and colleagues did not.
For many, a near-death experience pushes us to get our affairs in order. But the truth is, I already had my will ready before the earthquake. Finding a dependable financial advisor and writing a will were two of the most important things my husband and I did when we first married. However, it wasn’t until after the earthquake that I learned there was so much more to proper estate planning than just having a will.
Our first will was simple. We did not have very many assets at the time so it outlined who would inherit my jewelry and who would handle our affairs if we both passed away in the same tragic accident. We paid a standard fee to a small legal practice and kept our will in a safe place. It was not until two years later when I came face to face with a real tragedy that I realized how inadequate our will really was.
Surviving A Devastating Earthquake
On January 12, 2010 my day started like any other. I woke up at the crack of dawn to get dressed for work and waited for a shuttle to pick me up. I was working in Port-au-Prince, Haiti and my husband had just left the island two days earlier, after spending a couple of weeks with me celebrating the Christmas holiday. That afternoon, the same shuttle that picked me up took me home after work. I began to get dressed for dance class. While getting ready, I started to call my husband to see how his day was going. That’s when I heard a loud screech and the sound of dishes breaking. The fact that my home was shaking only confused me even more. My immediate reaction was to run out of my house with the phone still in my hand.
As soon as everything stopped I found myself leaving a voicemail for my husband, “Hey babe I think we just had an earthquake.”
I immediately assessed my surroundings and realized the magnitude of what really happened. We had experienced a massive earthquake (7.0 magnitude to be exact). While I was able to escape my home, my next door neighbor was not as fortunate. The next 24 hours were the longest of my life. The following morning, when I was finally able to travel to my office, I called my husband to let him know I was okay.
A month later I was granted leave from work and my husband and I were reunited for the first time. We discussed whether I should stay in Haiti and when we wanted to start our family. We also took the opportunity to review our affairs. Near-death experiences really help put your life in perspective; and the earthquake forced us to redefine our next steps.
The weeks after the earthquake were when I began to realize that a will is not enough to protect your life, legacy, or family. This is where my deep dive into financial literacy began and continued for the next several years. I learned that someone truly prepared for an untimely death should have life insurance, a will, a living will or medical directive, and a trust (for folks with children and many assets). No one wants to think about dying, but you have to plan and prepare. Otherwise, you are leaving your family to pick up the pieces. Lack of preparation can not only be costly for you but also for your loved ones long after you are gone.
Applying What We Learned: Revisiting My Estate Planning
When I left Haiti in Summer of 2010, my husband and I decided to start our family. My oldest son was eager to come into this world and actually arrived the day of his baby shower. Of course, I was not there for the party but our friends celebrated without me and then came to the hospital to see our firstborn for themselves.
Our second son was born in Dubai and was just as eager to arrive. However, he came several weeks early and as a result spent the first five months of his life in the hospital. His survival was our family’s miracle. When we left Dubai in 2015, I suggested to my husband that it was time to revisit our will and update our documents. We had two children now – one with special needs – so it was more important than ever to ensure our children would be taken care of if either of us passed away.
Estate Planning: Understanding the Lingo
Our subsequent consultation with an estate planning attorney was the first time I learned about the importance of a revocable trust and a living will. A revocable trust is a document that outlines how to divide your assets and designates the beneficiaries of your estate, as well as what to do in the event you are incapacitated. On the other hand, a living will define your medical plan and lets your family and physicians know if you want life support or other specific treatment in the event you are terminally ill or unable to communicate for yourself. These documents, in conjunction with a will, can protect your family from probate court and confusion. On top of that, if you are the parent of a special needs child, like me, a special needs trust outlines who will care for your special needs child and outlines their inheritance terms and usages. This is important if your child qualifies for government assistance or funding that takes personal assets into consideration when defining eligibility for programs.
Here are a few more key terms that can help you make sense of the estate planning process:
Will – This document indicates how you want your assets passed on after your death. This is especially important if you have several children and need to declare a legal guardian for them. Without a will, your assets will be divided according to the laws of your state. Probate takes time and money that your family may not have; so please spare them the headaches that arise if you only have a will.
Probate – This is a court-supervised process where the last will and testament of a deceased person is authenticated and assets are distributed accordingly. If a will is not left, the court will distribute assets based on local laws.
Living Will – This document is also known as a medical directive. It defines your desire for life support and experimental treatments so your family and doctors can take necessary medical action in the event that you are unable to communicate your wishes for yourself.
Revocable living trust with an incapacity clause – This document defines how to allocate your assets and handle your affairs while you are alive and after your death. A trust can be changed as much as you want while you are alive, and then the terms of the trust are executed and cannot be changed after your death.
Power of Attorney – This is a document that you sign to give someone else the power to handle your legal affairs on your behalf.
Trustee – The person designated to take care of your affairs if you are incapacitated or after you die.
The Basics of Estate Planning: How to Make a Will
Whether you have children or are a single person with a new home, you should understand the basics of estate planning. Everyone should have a will, revocable trust with an incapacity clause, and a living will for health care matters. These are the basics of estate planning … but many of us still don’t have these bases covered.
For about ten dollars each pay period, my husband gets discounted legal services from his job. Check to see if your job offers this or a similar employee benefit. We used an attorney in this legal network as a starting point to discuss our wills. The first consultation allowed us to go over our family situation, assets, and what actions we would like to see taken if we both were to pass. The lawyer advised us to also consider a special needs trust to fully protect our youngest son, explained how we could fund the trust, and gave us homework or questions to think about before she drafted up the documents for our review.
We also had to decide who we wanted to handle the details of our affairs, a person is known as the executor of the estate. You can have as many executors for your estate that you like, but most experts recommend keeping this process simple. If you and your spouse can decide on one person, that is often the best option. Finally, we had to make a decision about who would take care of our children and how we wanted to distribute the assets from our trusts to them. We decided to break up the inheritance for our children over time, as many young people are not ready to handle a large sum of money at 18 years old. The attorney helped us figure out ways to break down the inheritance and what items we could define as acceptable to fund at any age, items such as education fees, medical expenses, or general cost of living support.
As you are designating roles for your friends or family members, make sure to talk to them first about this commitment. They need to know if they are responsible for your estate, children, or assets. It’s also important to give your executor instructions on where to find originals of your important documents (wills, trusts, and medical directives), as well as sending them copies for their records.This conversation may be tough, but here are some tips to get you started.
Although there are a lot of websites that tell you it is easy to write a will, I highly recommend hiring an estate attorney licensed in your state. Laws regarding estates and probate vary between states and doing your planning the right way will save your family a lot of money and time in the long-run.
Start Your Plan Today
While no one likes to think too much about their own death, the truth is we all should be prepared for this event that we know is going to happen. Preparation and correct documentation can save your family money and headaches. It will make a difficult time easier to manage because a will and living trust provide your family instructions to help navigate through the process of carrying out your last wishes.
Estate planning is important and an invaluable investment. We never know what may come, so the time to prepare your family for when you are not here is now.
For more resources on estate planning, check out this firm’s blog.
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Acquania Escarne is the creator of The Purpose of Money, a community of women building generational wealth for their families one dollar at a time. As an entrepreneur, real estate investor, and licensed insurance agent, Acquania has always been passionate about financial literacy. On her website, Acquania blogs about ways to help you improve your money habits, create wealth, and invest in real estate. Follow Acquania on social media for daily tips.