Your Estate is everything you own, including life insurance, joint properties, and real estate.
An Estate Plan means creation of documents that:
Typical Estate Planning Documents include the following:
Having a well drafted Financial Power of Attorney is critical because this is document grants another person the power to act on your behalf while you are alive, to do whatever you could do with your assets and affairs. If you are unable to manage your affairs and do not have a Financial Power of Attorney, your family may have to go to Probate Court and request appointment of a Conservator to manage your assets.
A well drafted Health Care Power of Attorney is also critical. This document, sometimes called a Patient Advocate Designation, Five Wishes, or Advance Directive, is a written document granting another the power to make medical and life support decisions when you are not able to make your own health decisions. If you cannot make your own health care decisions and do not have a Health Care Power of Attorney, your family may have to go to Probate Court and request appointment of a Guardian over you.
A Will is a written document that directs the disposition of assets held solely in your name and with no beneficiary designations, after your death. A will should also appoint a person, called a Personal Representative, to oversee to probate court process.
We would love to meet with you and develop an estate plan to tailored to your estate planning goals and needs. We offer free estate planning consultations.
Planning for the future and possible long-term care (nursing home care, for example) requires open and honest discussions. This conversation is never easy. Westshore Law recommends you start the conversation with the following questions.
1. Do you have a General Durable Power of Attorney for Financial Matters?
A general durable power of attorney is a document that allows a person (the principal) to appoint someone (the agent) to manage business and financial matters. If your parent is living but becomes incapacitated, someone needs to be able to step into your parent’s shoes to perform these tasks. Without this power of attorney, a conservator will need to be appointed through the probate court and your parent has lost the opportunity to choose who manages his or her finances. The court process to appoint a conservator costs much more money and time than does a financial power of attorney.
It is vital that this document is compatible with medicaid planning.
2. Do you have a Health Care Power of Attorney?
A health care power of attorney is a document wherein a person (the patient) appoints someone (the patient advocate) to make health and well-being decisions when the patient is alive but incapacitated. Without a health care power of attorney, a guardian for your parent will need to be appointed through the probate court and your parent has lost the opportunity to choose who makes his or her medical decisions. The court process to appoint a guardian costs much more money and time than does a health care power of attorney.
A health care power of attorney is sometimes referred to as Five Wishes, Health Care Directive, Living Will, and Patient Advocate Designation.
3. Do you have a medical release?
Many people believe that their health care power of attorney allows their trusted patient advocate to access medical information at any time. Health care powers of attorney are effective only when someone is incapacitated. Therefore, if you want to assist your parent with medical decisions while they are still competent, they need to sign a release form such as a general medical release, and provide it to all health care professionals.
A medical release is sometimes referred to as a HIPAA release form.
4. How do you feel about life-sustaining treatment?
Most people do not want to “live like a vegetable.” However, unless wishes are communicated, how will the family know what to do when faced with serious medical situations? The conversation is difficult, and you hope you never have to make these tough decisions; however, you will be thankful that you asked the question if ever faced with life and death issues.
5. Do you have a will or a trust?
A Will instructs the probate court how to dispose of assets and who should be in charge after someone’s death. A trust is similar, except that a trust also controls assets during lifetime and does not require probate court involvement. Therefore, a person appointed as trustee has power to manage assets during lifetime just like an agent under a power of attorney.
6. Do you have a list of your assets and how they are titled?
One of the most helpful gifts a parent can give the family is to have their affairs organized so their nominated agents or personal representatives can easily and quickly manage and secure assets upon the parent’s illness or after death. Knowing how assets are titled is extremely important because how assets are titled controls who receives the asset after death. For example, if a parent and child are joint owners of a bank account, the child typically acquires sole legal title to the account after the parent’s death. This child is not required to use the money to pay for the parent’s funeral, pay bills, or share it with other family members.
7. Do you have beneficiaries listed on all of your insurances, annuities, and IRA accounts?
Many people remember to name a primary beneficiary for these types of accounts. However, life is unpredictable. A contingent beneficiary should always be listed for these assets unless probate proceedings after death are desired. Beneficiaries should be reviewed periodically to ensure the beneficiary is still alive and should inherit the asset.
8. Do you have a pre-paid funeral or life insurance to pay for your funeral?
Many senior citizens have multiple life insurance policies and pay more in premiums than the value of the future life insurance benefit. Many seniors pre-pay their funeral costs but keep their life insurance policies and continue to pay these premiums. Sometimes many small policies can be used to purchase a funeral arrangement. A review of your parent’s policies is important to save money and to ensure that funds are available to cover the cost of the funeral.
9. Do you have federal or state taxes withheld from your pension?
Oftentimes, senior citizens do not have sufficient taxable income to file tax returns. However, many people forget to stop the federal tax withholdings from their pensions. The deductions on your parent’s pension benefits should be reviewed every few years to see if withholding is necessary.
10. Do you have traditional Medicare and a supplemental insurance policy, or do you have a Medicare Advantage Plan?
Health insurance is complicated and confusing. Many seniors have fallen victim to insurance agents who do not explain that the Medicare Advantage plans do not cover nursing home costs like supplemental or Medi-gap policies and Medicare cover. It is imperative that you and your parent know exactly what kind of health insurance coverage exists and the type of coverage.
A revocable trust is a written legal document that is treated as an “artificial person.” You can think of a trust as an invisible bucket. It is your job to place your assets into your bucket by titling the assets in the name of the trust. The trust document is the instruction book for how to use and distribute the assets in the trust bucket.
Some basic facts about a trust document:
Trusts are generally recommended for the following:
Contact us to schedule your appointment to discuss your specific needs.
Losing a loved one is traumatic. Being with family and taking care of your physical and emotional needs are your first priorities. Reviewing estate plans and assets can wait until after the funeral or memorial service. When you are ready, review this checklist. It is meant help you navigate the post-death process. If you need additional instruction, please contact us for an appointment.
If you are feeling overwhelmed, please call us. We are here to navigate this process for you.