What is Estate Planning?
Whether they realize it or not, most adults have an estate. Your estate is made up of everything you own at the time of your death. It can include things like cash, pets, annuities, vehicles, insurance, investments, jewelry, household items, real estate, retirement funds, bank accounts, and stock certificates. Estate planning allows you to decide in advance what happens to your estate when you die. It also allows you to be prepared for an emergency situation or if you become incapacitated.
To ensure your wishes are carried out, you must have legal documents in place that stipulate how your assets will be distributed and who will be in charge of making decisions. At a minimum, you should have the following estate planning documents:
A Last Will and Testament is a formal legal document where you decide exactly how and in what portion you want your assets and property to be distributed upon your death. You can choose any number of recipients of your property, whether they be family members, friends, or charities. The Will is witnessed and signed by a person who is at least eighteen years old, of sound mind, and under no undue influence at the time of signing the will.
In a Will, you decide who will be the person in charge of administering your estate, called the Personal Representative. Another decision you make in a Will is determining how final expenses and taxes are paid. An important aspect of a Will for parents is the ability to designate a guardian for your minor children. Without a Will expressing your wishes, the Court will not know who you’d like to serve as guardian for your children. Also, you can decide whether or not the court should supervise the administration of your estate.
Power of Attorney
A financial Power of Attorney gives the person you name in your document the authority to handle financial transactions. There are different types of Powers of Attorney, but the durable Power of Attorney lets someone manage all your financial affairs throughout your lifetime.
The attorney-in-fact can take care of a variety of tasks from depositing checks for you to handling retirement accounts to filing your tax return. Your attorney-in-fact does not need to be a financial expert, just someone you trust. The attorney-in-fact can always hire a professional to help them out if needed.
Advance Directives for Health Care
Advance Directives for Health Care are actually four legal documents rolled into one: Health Care Power of Attorney, Living Will, Appointment of a Health Care Representative, and a HIPAA Release. Together, they comprise one of the most important steps you can take in letting your family and doctor know what your wishes are for your own medical care.
Health Care Power of Attorney. You can choose a person to serve as your power of attorney for health care decisions during the times when you can’t make a decision for yourself. That person will be able to do any or all of the following:
Employ health care providers
Consent to or refuse health care for you
Admit or release you from a hospital or health care facility
Have access to your medical records
Make anatomical gifts
Request an autopsy
Make plans for the disposition of your body
Living Will. A Living Will clarifies your wishes for life‑prolonging procedures to be withheld or withdrawn so that you can be permitted to die naturally. Your attending physician must first certify in writing that: (1) you have an incurable injury, disease, or illness; (2) your death will occur within a short time; and (3) the use of life‑prolonging procedures would serve only to artificially prolong the dying process.
All medical procedures and medications which are necessary to provide you with comfort, care, and the alleviation of pain will be continued. In addition, you can make your wishes known regarding artificially supplied food and water. If, on the other hand, you wish to have medical procedures continued under such circumstances, you can sign a Life‑Prolonging Declaration rather than a Living Will.
Appointment of Health Care Representative. Your Health Care Representative will be the person who ensures your Living Will is enforced when you are unable to do so. This person will consult with your doctor as well as other family members, if appropriate.
Many people think estate planning only applies to older or wealthy people. However, estate planning is for everyone. Life is uncertain and illnesses or accidents can befall us at any time. For people of modest or little means, estate planning allows you to protect what you have and make arrangements for your minor children.
If you put off estate planning because you think you don't need one or you are too busy, the state will make decisions for you. If you die without a Will or Trust, the state determines what happens to your assets, who is in charge of your estate, and who will be guardian of your children. If you become incapacitated and do not have a Power of Attorney in place, your family will need to go through the expensive and lengthy process of getting a guardianship.
Rather than leaving these important matters up to the state, take the time to meet with a qualified estate planning attorney. Our attorneys have over 35 years of combined experience in planning estates. We guide our clients through the estate planning process by closely evaluating your unique goals and desires and your family dynamics. Call or schedule an appointment online with us today.