Estate Planning


Things to Think of While You Can Still Think

Will - this is a document directing the disposition of your assets after you die. Generally, if you leave a large enough estate, a will is enforced through a process called "Probate". Probate is a court proceeding in which a Personal Representative is appointed to collect assets, pay debts, taxes and expenses and then distribute the remainder to the beneficiaries indentified in the Will or the heirs at law if there is no Will.

Trust - this is a method of holding title to assets while you live and directing the management and disposition of those assets after you die. The administration of a trust is normally accomplished without the involvement of the court system.

Beneficiary Designations - even if you have a Will or Trust, any beneficiary designation that you have made on an asset, such as a life insurance policy, will determine who actually receives that asset. It is possible to put a beneficiary designation on most types of assets, including real estate. Not all beneficiary designations are interpreted the same way if a named beneficiary has died, however.

Power of Attorney - this is a document which names someone to act on your behalf with regard to your finances. It is sometimes also referred to as a "durable" or "general" power of attorney. Although it is normally used after you are no longer able to manage your finances yourself, it can be used at any time, regardless of whether you are competent or not. It gives the agent the ability to manage assets the same way you could, including paying bills, investing assets, withdrawing funds from accounts and selling real estate.

Power of Attorney for Health Care - this is a document which names someone to act on your behalf with regard to your medical decisions if you are not able to provide guidance to your health care providers yourself.

Living Will - this document, technically entitled Declaration to Physicians, provides advance direction to Health Care providers regarding life-support and feeding tubes in cases of terminal illness or persistent vegetative state. It does not cover any other situations.

Medical Information - healthcare providers are limited by the federal health information act [HIPPA] in how they handle your medical information. As a result, they may not share information about you with your children or others who are close to you, unless you sign a written release authorizing them to give information to those persons you identify. This can make it possible for the identified person to receive information and help you make medical decisions.

Funeral Directive - this document makes it possible for you to designate who would control your funeral arrangements and specifies your preferences regarding funeral services. This can be especially important if your closest relatives may not agree with your choices, with each other or would not be your preferred decision makers.

Long-term-care costs - generally Medicare does not cover nursing homes, assisted living or in-home care services. If you do not have enough income and assets to cover these costs, you would need to qualify for a government welfare program, entitled Medicaid and often referred to as "medical assistance" or "title 19", in order to cover those costs. An alternative is long-term care insurance.

Retirement income - it is likely that Social Security benefits will be reduced in the future and will not keep pace with rising costs. Life expectancies have been increasing. If you have retirement savings, you will need to plan for the investment and withdrawal of those savings in a fashion which will not exhaust those savings before your death. Long-term-care costs can disrupt those plans.

Veteran’s benefits - all US service veterans are eligible for some benefits based upon their years of service, health, income and assets. Veterans who served during periods of war are also eligible for an Aid and Attendance benefit which is meant to help pay the cost of long-term-care for veterans who meet the financial requirements.

Planned giving - in addition to regular annual charitable giving, you should also consider the desirability of making charitable donations a part of your estate plan. This can be accomplished by specific bequests in your will or trust. It is also possible to set aside assets for ultimate distribution to charity while retaining the right to receive income from those assets during your remaining lifetime. Of course, there can be significant income tax advantages to making charitable donations.

Location of Documents - In order for others to carry out your wishes, it will be necessary for them to be able to locate your important documents and information at some point in time. Make sure they know where to look. If the documents are in a safe deposit box, they will not have access after you die unless they are listed as a co-owner of the box. If the documents are in an electronic format they will need to know your user names and passwords.