Basic Planning
The other day I was at the supermarket and the greater asked me if I had just been to church. When I realized she was used to seeing me in casual clothing for my late night shopping runs I told her, “Sometimes I have to dress up and play attorney.” That started the conversation. As soon as she realized I practiced Estate Planning law, she immediately told me what she had (or didn’t have) and asked, “What do I need?” This is the most common question I receive.
For the door greeter with a very small home, no investments, no savings, one child, and very limited income the choices are limited. However, she still needs to know what the essentials are.
POWERS OF ATTORNEY
Powers of Attorney are one of the most overlooked but most important legal planning tools available. They are applicable to both rich and poor. They take effect during life and allow someone else to assist us by doing things on our behalf while we are unable to do them ourselves. Times when a Power of Attorney (POA) may be used include, extended business travel, military service, long term hospital stays, and loss of mental capacity.
There are two types of Power of Attorney that most people should be aware of. Each of these Powers of Attorney should be “Durable” powers. A “Durable” power means that it will be effective even if the person who granted it loses mental capacity to make their own decisions. The Powers of Attorney are 1) Financial and 2) Medical. We should consider these for ourselves and our children.
What happens if something happens to you and you are unavailable to any minor children in your home? Provision should be made to authorize someone you trust to care for your children, deal with schools, deal with the government, and deal with agencies on your child’s behalf.
What if your child is no longer a minor and something happens to them? Without a POA in place, you may no longer have legal authority to tell the doctors what to do.
Powers of Attorney are essential in prudent planning. The person holding the power may be the same for both financial and medical decisions or they may be completely different. In choosing someone to help you in this capacity you should choose carefully. There are many criteria that should be considered.
WILL
When most people think of legal planning for their families, this is what they think of. A will becomes effective at death. However, it is only as effective as the Probate Court allows it to be. You see a will is only effective under orders of the Court. Once you file a will you are in the probate process. Through probate there are often challenges to wills for one reason or another. The national average amount of time taken from the opening of a probate to its close is about 18 months. While it may be good practice to have a will, it should be a very small part of most comprehensive estate plans. A will by itself may be one of the most dangerous estate planning documents ever created.
TRUST
The term “Living Trust” is almost a misnomer. While it is certainly a legal document that is written during a person’s lifetime, it typically only deals with death related issues. A traditional living trust is created for the express purpose of managing the dispersal of property and saving money in taxes upon one’s death. Sometimes known by attorneys as an inter vivos trust, a living trust should also protect the estate from probate proceedings.
Properly designed, a living trust can do all this plus 1) protect financial privacy, 2) strengthen protections against fraud and misappropriation of savings, and 3) provide protections and guidelines if one is incapacitated. The very best trusts, as designed by Advanced Legal Planning, LLC can do all this plus extend these benefits and protections beyond your lifetime to your children and grandchildren. A properly drafted living trust becomes the cornerstone for most comprehensive estate plans. More information about what a living trust should provide can be found here. (the page for Why Your Living Trust Won’t Protect You)
HEALTH CARE
We have already touched on Health Care documents when we discussed Powers of Attorney. However, there are other documents that must be in your plan. Those would include:
1) A HIPAA compliant medical release. A medical release gives permission for those whom you direct (who may be involved in helping you or your estate) to speak with doctors and collect medical records. It gives them access to the records.
2) A Living Will. This is the “Unplug Me” document. If you do not wish to live in the hospital as a vegetable. Often the reason for choosing to have this document is simply to remove the emotional burden of life terminating decisions from those we love. The living will allows them to instruct the Doctors of your wishes without feelings of guilt.
3) Advanced Healthcare Directives – These give those responsible for your medical care more in depth understanding of what you do and do not want done to you or for you while you are in care and unable to communicate your own desires.
The above documents are the basics in proper planning. Anything less is typically not a complete plan. Anything more gets into the realm of Advanced Legal Planning.
Contact us to schedule an Estate Planning consultation today.