The Importance of Basic Estate Planning

Posted on October 2, 2012 by

Many adults mistakenly believe that they do not need any estate planning documents.Every adult should have three important documents: a durable power of attorney; an advance medical directive; and a last will and testament.  These documents need to be prepared while the adult is competent. Even healthy young adults should have these documents as incapacity can come not only over time as a result of advanced age, but can also come suddenly and unexpectedly as a result of an accident or illness.

Power of Attorney

A power of attorney authorizes someone (your “agent”) to act in your place and on your behalf. A typical ‘general’ power of attorney covers your property and your financial affairs. This document allows your agent to do such things as access your finances to pay your bills, rent or sell your real property, purchase things you may need and file suit on your behalf.  It is effective only while you are aliveand therefor not a substitute for a will.  For most clients I recommend a broad general power of attorney appointing a primary agent and one or two backup agents to serve in the event the primary agent is unable to.   A simple separate agreement outlines the terms and conditions of use.  It is important to make sure the power of attorney is “durable” – meaning that it survives your incapacity, as most people would only want an agent to act on their behalf in the event of incapacity.

When a person becomes incompetent and does not have a power of attorney, in order to handle that person’s financial affairs, the family members often must petition the court to have a conservator appointed for the incapacitated person.  The court process is more cumbersome and typically results in a time delay, additional expenses (i.e., attorney fees, and court costs), lack of privacy, restrictions on actions, and a duty to file accountings through the court. It may also result in a fight amongst your loved ones as to who should be appointed.

Advance Medical Directive

An advance medical directive is a combination of a health care power of attorney and a living will. It covers your person (i.e. your body) instead of your property and finances.  For my clients I recommend that it also include a statement of their wishes concerning organ and tissue donation.

This health care power of attorney authorizes someone (your “agent”) to make medical decisions for you when you are unable to make them for yourself. It is effective only while you are alive.  For most clients I recommend a broad health care power of attorney appointing a primary agent and one or two backup agents to serve in the event the primary agent is unable to.  The document allows your agent to do such things as authorize treatment, hire medical providers, authorize your admission into a hospital, deal with you insurance company, obtain medical records (HIPAA release).

When a person becomes incompetent and does not have a health care power of attorney the family members often must petition the court to have a guardian appointed for the incapacitated person.  The court process is more cumbersome and typically results in a time delay, additional expenses (i.e., attorney fees, and court costs), lack of privacy, and restrictions on actions. It may also result in a fight amongst your loved ones as to who should be appointed.  It is common for the petition to the court to be for the appointment of a guardian and a conservator.

A living will expresses your wishes concerning the use of life-support and end-of-life decisions when you are terminally ill or in a persistent vegetative state from which there can be no recovery.  It must be a clear and concise statement of your wishes. A living will allows death with dignity when life support would only prolong the dying process; it does not prevent you from receiving life support if there is a chance of recovery.  The living will only comes into use when you are unable to form your own decisions.  So long as you are still competent you are still the one making the decisions, even if you are terminally ill.  This document allows you to express what treatments you wish to receive or not receive. For example, you may want to receive artificial nutrition and hydration but not be placed on a respirator.  Most of my clients choose to include a statement specifically allowing “comfort care” to alleviate pain and suffering.

When a person becomes terminally ill or is in a persistent vegetative state from which there is no hope of recovery and they have not executed a living will, the decisions fall to his or her next of kin. Many times this leaves the next of kin in a very difficult position, especially if the patient is young and the situation is unexpected – as is the case of a tragic accident. Often times the family does not agree on what to do, or feel guilty if they authorize the withdrawal of treatment knowing that it will result in death. Frequently I have clients that do not want the decision making left to next of kin. Many clients have “significant others” or “life partners” that are not legally their next of kin but are the ones that should be making the decisions. If the next of kin does not approve of the relationship, often times the significant other is not even allowed to be present let alone involved in the decision-making process.

Without a clear and concise statement of your wishes you could be setting your loved ones up for a nightmare.  Remember Terri Schiavo, the young Florida woman who, in 1990, at the age of 27, suffered brain damage after going into cardiac arrest.  In 1998, after eight years on a feeding tube her husband sought to remove the life support and her parents objected. For the next seven years her loved ones fought. The case involved 14 appeals and numerous motions, petitions, and hearings in the Florida courts; five suits in federal district court; Florida legislation struck down by the Supreme Court of Florida; federal legislation (the Palm Sunday Compromise); and four denials of certiorari from the Supreme Court of the United States.  Sadly, when she passed away in March of 2005, a few days after her feeding tube was removed, her parents were not allowed to be her side due to the strained relationship between them and her husband.

Organ and Tissue Donation.  A person who has a preference concerning organ and tissue donation should be sure that those wishes are specified.  Most often your loved ones are in a state of shock, disbelief and grief when faced with the need to make decisions about donation. You can provide them with some comfort if they know what your wishes are.

Last Will and Testament

A properly drafted last will and testament can save time and expense in the settlement of your estate. It provides rules to follow and can help avoid conflict and problems amongst your loved ones. In you will you can specify such things as who should raise your children, who receives what items of your property (both real and personal), who handles the settlement of your estate, who handles funds held in trust for a minor beneficiary, and  under what restrictions can trust funds be used for the beneficiary.

 

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The Importance of Basic Estate Planning

Many adults mistakenly believe that they do not need any estate planning documents.Every adult should have three important documents: a durable power of attorney; an advance medical directive; and a last will and testament.  These documents need to be prepared while the adult is competent. Even healthy young adults should have these documents as incapacity can come not only over time as a result of advanced age, but can also come suddenly and unexpectedly as a result of an accident or illness.

Power of Attorney

A power of attorney authorizes someone (your “agent”) to act in your place and on your behalf. A typical ‘general’ power of attorney covers your property and your financial affairs. This document allows your agent to do such things as access your finances to pay your bills, rent or sell your real property, purchase things you may need and file suit on your behalf.  It is effective only while you are aliveand therefor not a substitute for a will.  For most clients I recommend a broad general power of attorney appointing a primary agent and one or two backup agents to serve in the event the primary agent is unable to.   A simple separate agreement outlines the terms and conditions of use.  It is important to make sure the power of attorney is “durable” – meaning that it survives your incapacity, as most people would only want an agent to act on their behalf in the event of incapacity.

When a person becomes incompetent and does not have a power of attorney, in order to handle that person’s financial affairs, the family members often must petition the court to have a conservator appointed for the incapacitated person.  The court process is more cumbersome and typically results in a time delay, additional expenses (i.e., attorney fees, and court costs), lack of privacy, restrictions on actions, and a duty to file accountings through the court. It may also result in a fight amongst your loved ones as to who should be appointed.

Advance Medical Directive

An advance medical directive is a combination of a health care power of attorney and a living will. It covers your person (i.e. your body) instead of your property and finances.  For my clients I recommend that it also include a statement of their wishes concerning organ and tissue donation.

This health care power of attorney authorizes someone (your “agent”) to make medical decisions for you when you are unable to make them for yourself. It is effective only while you are alive.  For most clients I recommend a broad health care power of attorney appointing a primary agent and one or two backup agents to serve in the event the primary agent is unable to.  The document allows your agent to do such things as authorize treatment, hire medical providers, authorize your admission into a hospital, deal with you insurance company, obtain medical records (HIPAA release).

When a person becomes incompetent and does not have a health care power of attorney the family members often must petition the court to have a guardian appointed for the incapacitated person.  The court process is more cumbersome and typically results in a time delay, additional expenses (i.e., attorney fees, and court costs), lack of privacy, and restrictions on actions. It may also result in a fight amongst your loved ones as to who should be appointed.  It is common for the petition to the court to be for the appointment of a guardian and a conservator.

A living will expresses your wishes concerning the use of life-support and end-of-life decisions when you are terminally ill or in a persistent vegetative state from which there can be no recovery.  It must be a clear and concise statement of your wishes. A living will allows death with dignity when life support would only prolong the dying process; it does not prevent you from receiving life support if there is a chance of recovery.  The living will only comes into use when you are unable to form your own decisions.  So long as you are still competent you are still the one making the decisions, even if you are terminally ill.  This document allows you to express what treatments you wish to receive or not receive. For example, you may want to receive artificial nutrition and hydration but not be placed on a respirator.  Most of my clients choose to include a statement specifically allowing “comfort care” to alleviate pain and suffering.

When a person becomes terminally ill or is in a persistent vegetative state from which there is no hope of recovery and they have not executed a living will, the decisions fall to his or her next of kin. Many times this leaves the next of kin in a very difficult position, especially if the patient is young and the situation is unexpected – as is the case of a tragic accident. Often times the family does not agree on what to do, or feel guilty if they authorize the withdrawal of treatment knowing that it will result in death. Frequently I have clients that do not want the decision making left to next of kin. Many clients have “significant others” or “life partners” that are not legally their next of kin but are the ones that should be making the decisions. If the next of kin does not approve of the relationship, often times the significant other is not even allowed to be present let alone involved in the decision-making process.

Without a clear and concise statement of your wishes you could be setting your loved ones up for a nightmare.  Remember Terri Schiavo, the young Florida woman who, in 1990, at the age of 27, suffered brain damage after going into cardiac arrest.  In 1998, after eight years on a feeding tube her husband sought to remove the life support and her parents objected. For the next seven years her loved ones fought. The case involved 14 appeals and numerous motions, petitions, and hearings in the Florida courts; five suits in federal district court; Florida legislation struck down by the Supreme Court of Florida; federal legislation (the Palm Sunday Compromise); and four denials of certiorari from the Supreme Court of the United States.  Sadly, when she passed away in March of 2005, a few days after her feeding tube was removed, her parents were not allowed to be her side due to the strained relationship between them and her husband.

Organ and Tissue Donation.  A person who has a preference concerning organ and tissue donation should be sure that those wishes are specified.  Most often your loved ones are in a state of shock, disbelief and grief when faced with the need to make decisions about donation. You can provide them with some comfort if they know what your wishes are.

Last Will and Testament

A properly drafted last will and testament can save time and expense in the settlement of your estate. It provides rules to follow and can help avoid conflict and problems amongst your loved ones. In you will you can specify such things as who should raise your children, who receives what items of your property (both real and personal), who handles the settlement of your estate, who handles funds held in trust for a minor beneficiary, and  under what restrictions can trust funds be used for the beneficiary.