Did you know that 48% of adult Americans do not have a will? Do you know what happens to your property, other assets, and loved ones if you die without a will?
Without a will in place when you pass away, these decisions are put in the hands of the state, which is called intestate, and it creates a lot of extra work for your family and friends at a time when their lives are already turned upside down. In order to ensure your affairs are conducted in a manner that you have decided upon, you need to have a will in place.
A will is just one document, and the most common one, that makes up an estate plan. I can assist you in preparing these documents and ensure they are kept up-to-date for you and your family. Here are some common documents that should be included in your planning:
Power of Attorneys or Advanced Medical Directives
Packages, with pricing, for consulting with you and your family and preparation of the documents include these options:
Basic will for individuals – $400
Will plus trust – $700
A complete estate plan including wills, advanced medical directives (power of attorney) and trusts – $1,000
A will is a binding legal document that sets forth the distribution and management of a person’s estate – property, assets and other family matters. There are simple wills and complex wills. A simple will addresses:
Distribution of property following death
Designation of guardians for minor children, and
Designation of personal representatives to administer and settle the estate
A simple will is sufficient in the high majority of situations. I can prepare a will for you and your family for fees ranging from $350 – $500.
Any will that contains provisions for one or more trusts transforms a simple will into a complex will because of the additional considerations involved.
A trust involves three parties:
You, the grantor, requesting the trust
The beneficiary, receiving the benefits of the trust
The trustee, managing the trust as defined by you and your family
A trust is a legal document whereby one party, the grantor, provides property (usually money) for another, the beneficiary, to be managed or controlled by another party, called the trustee. One of the benefits of having a trust in place is that property transferred through a trust is not subject to the probate process (link this to an article about probate).
There are different types of trusts, revocable trust and irrevocable trusts. One major difference between the two types are that one can be modified and one cannot be modified. The type of trust you choose to setup depends on your individual situation and should be discussed with a lawyer with skills in this area of estate planning.
A revocable trust can be modified during the life of the grantor and may be subject to the estate tax. This trust will be part of the grantor’s taxable estate. The property in a revocable trust can be distributed, remain in the trust for the benefit of the beneficiary, or a hybrid of the two. A revocable trust is great for those that may want to change their estate plans. This type of trust is especially useful in avoiding probate and maintaining your confidentiality, or in preparing for a potential or actual mental disability.
An irrevocable trust is typically exempt from the estate tax but cannot be modified. One of the biggest advantages to an irrevocable trust is protecting your property from creditors. This provides you with the ability to provide for family or others without worry that a creditor may take from the assets you plan to leave.
Advanced Medical Directives or Power of Attorney
A power of attorney is a document that designates a person (and often a substitute, as well) to act on your behalf in the event you become incapacitated or are otherwise unable to manage your own decision-making. A power of attorney, like many estate planning documents, has specific legal requirements that must be satisfied to have binding force. There are different types of powers of attorney and are also referred to as advanced medical directives. They are often used to designate an individual to oversee your medical, financial, and/or legal affairs.
Advanced Medical Directives include the following and are just as important as having a will in place:
Durable Power of Attorney
Health Care Proxies
A will or a trust may not govern in a situation where a person becomes disabled or incapacitated over a period of time because such person is still living. A proper durable power of attorney ensures that your designated representative is empowered to manage your affairs on your behalf concerning your financial affairs or make medical decisions on your behalf.
A living will is your written expression of how you want to be treated in certain medical circumstances. This document may permit you to express whether you wish to be given life-sustaining treatments in the event you are terminally ill or injured, to decide in advance whether you wish to be provided food and water via intravenous devices (“tube feeding”), and to give other medical directions that impact your care, including the end of life.
A living will applies in situations in which the decision to use such treatments may prolong your life for a limited period of time and not obtaining such treatment would result in your death.
A health care proxy, sometimes called a “durable medical power of attorney,” is a durable power of attorney specifically designed to cover medical treatment. You appoint a person and grant to him or her authority to make medical decisions for you in the event you are unable to express your preferences about medical treatment. As in the case of a living will, medical professionals will make the initial determination as to whether you have the capacity to make your own medical treatment decisions.
Why Have Advanced Medical Directives or Health Care Directives?
Regardless of the name your state gives to these documents, their purpose is to allow you to express your preferences concerning medical treatment in an extreme medical situation when you cannot communicate, including at the end of your life. By expressing such preferences in a written legal document, you are ensuring that your choices are made known.