Your Protection Strategy Needs a Legal Foundation

David Glienke |

Any protection strategy that focuses only on insurance can leave you and your family vulnerable to the threat of legal system which doesn’t necessarily share your objectives. Absent specific, court sanctioned directives on your part, your life and the lives of your family members will be subject to the default provisions of the law that guide critical financial, family and health decisions when you are unable due to incapacitation or death.  A sound protection strategy must incorporate legal protections that expand your capacity to ensure that your expectations and intentions control the decisions made on your behalf.  At a minimum, a protection strategy should include a will, a power of attorney, a living will or health care proxy, and a living trust.


When someone dies, their estate becomes subject to probate proceedings. And if a will doesn’t exist, the state becomes the executor. That means the state will decide how your property is to be distributed, who gets paid first, and, they can even establish guardianship for children. It would be hard to imagine a situation in which the state would dispose of your estate in exact accordance with your wishes. After the delay and costs of an “intestate” probate, your family will suffer far more than you have intended. 

A will is a fairly simple document, but it forms the foundation of your estate plan and is the key instrument used to ensure that your estate is settled in the manner in which you desire. While there can be more to an estate plan than just a will, it is the presiding document that guides the process of settling your estate. The probate courts won’t take your will lightly, so you shouldn’t either.  Consider all that a will accomplishes for you and your family:

  • Specifies the disposition of your assets: Without a will, any asset that does not pass by beneficiary (such as a retirement plan or insurance policy) will be divided equally among your blood relatives, which may not be what you intended. A will specifies your priorities and directs your assets where you want them.
  • Names a guardian for your children: You know who would be the best guardian for your children.  But, unless a guardian is named in your will, the state will decide who takes care of your children.
  • Names an executor: The executor plays the critical role of ensuring each provision of your will is followed and your estate is settled in accordance with your wishes. Often times a spouse is named as an executor, however, a contingent executor should also be named.
  • Accounts for special circumstances: In this day and age, it is not uncommon for family situations to become somewhat convoluted as the needs of blended families have to be considered. 

Power of attorney

Planning your estate isn’t only about what happens after you die; it’s also about what happens if you don’t die but are incapacitated and cannot make decisions on your own. Your power of attorney provides explicit instructions to your family and the courts for the management of your legal and financial affairs while you are alive.

Living will, health care proxy

A living will (not to be confused with a will or a living trust because it has nothing to do with the settling of your estate) is a legal document that instructs medical practitioners of your desire or rejection of life-sustaining medical intervention in the event you become incapacitated through a terminal illness. Also referred to as an advance medical directive, it takes medical decisions out of the hands of your doctors and your family.  Most states still only recognize living wills as instruments to be applied after a terminal illness has been diagnosed. So, it would be important to add a health care proxy to your will which guides medical intervention in cases where you are incapacitated but not terminally ill.

Living trust

A living trust is a form of ownership that can hold title to your assets. The primary purpose for doing this is so your assets can be transferred directly to your beneficiaries outside of probate. They are still includable in your estate of tax purposes, but they will be immediately available for your family. Any asset, such as your residence, investment accounts, real estate, a business, and anything asset that doesn’t already pass by beneficiary (i.e. life insurance, retirement plans). You can also establish timelines for the disposition of your assets.

Legal Protections Action Steps:

  • Establish your goals: Translate the vision you have for your family’s future into tangible goals. What is it exactly you want to have happen for your family? It’s important to revisit your goals regularly as your circumstances change.
  • Take inventory: List all of your property and assets and assign values and your intentions for their ultimate disposition.
  • Meet with an estate planning attorney
  • Get a will
  • Review your beneficiaries: Most people don’t realize the kind of problems that can occur with improper beneficiary designations. If you have dependent children named as beneficiaries, they should be designated as contingent behind a spouse or trust. The best course is to coordinate your beneficiary designations with a living trust which can provide more explicit instructions for the disposition of the proceeds.
  • Check you titles: Some assets can pass automatically, outside of probate if they are titled properly (i.e. JTWROS)
  • Assign power of attorney
  • Establish a living will
  • Draft a living trust

*This content is developed from sources believed to be providing accurate information. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel. Neither the information presented nor any opinion expressed constitutes a representation by us of a specific investment or the purchase or sale of any securities. Asset allocation and diversification do not ensure a profit or protect against loss in declining markets. This material was developed and produced by Advisor Websites to provide information on a topic that may be of interest. Copyright 2022 Advisor Websites.