Planning for the future can be a challenge. Some things are easy to account for – Example: you know your daughter plans to head off to college in a couple of years, so you begin saving for her education in advance. Not everything is as straightforward or expected, which is why a healthy emergency fund and good insurance coverage should be a priority.
Unfortunately, there will always be events categorized as “known unknowns.” Former Defense Secretary Donald Rumsfeld coined the phrase back in 2012 to describe the Iraqi government’s alleged decision to supply weapons to terrorist groups:
“There are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns — the ones we don’t know we don’t know. And if one looks throughout the history of our country and other free countries, it is the latter category that tend to be the difficult ones.”
– Former Secretary of Defense Donald Rumsfeld
Surprisingly, this metaphor applies perfectly to the sometimes confusing task of estate planning. No matter how much you prepare, there will always be unexpected curveballs thrown your way. While there are steps you can take to address known unknowns – Example: paying for disability insurance coverage out of caution, for instance – it’s impossible to know the unknown unknowns.
What To Do
One way to address this challenge, is to prepare the next generation to take over. Should you become incapacitated, you may want your children, other relatives, or trusted friends to make decisions on your behalf. If so, you should consider designating them as your Agent(s) under financial and health care powers of attorney. These documents permit your Agent(s) to act for you when you cannot, and the documents also avoid the need for anyone to go through the time and costs of court proceedings for them to obtain a guardianship over you to otherwise act on your behalf. You should also ensure that you avoid the time and cost of probate court proceedings by properly designating beneficiaries and possibly establishing a revocable living trust plan. You should further consider compiling a list of your accounts, passwords, assets and other personal information to help your Agent(s) know what accounts and other assets over which they should exercise control on your behalf. Having customized estate planning documents in place will provide the safeguard you need to ensure that known and unknown unknowns can be dealt with as they arise.
When preparing for the unknowns in life, the advice and guidance of an experienced estate planning attorney can be an invaluable resource to provide you with the peace of mind you need. While no one can predict the future, an experienced estate planning attorney can use his or her experience to help identify and prepare for the unknowns in life.
The experienced estate planning attorneys of Wilson+Miller look forward to helping you take back control. Give us a call today to schedule your consultation. 501.221.7776.