BASIC ESTATE PLANNING THAT EVERYONE NEEDS
There are basic estate planning documents that everyone should have in place to address critical moments in your life and at death. The primary purpose of estate planning is to: (1) identify persons who will make decisions for you when you are not able to do so, and later after death; and (2) have an orderly plan for the conclusion of your life and take care of your loved ones.
The basic estate plan will include the following documents:
1. Financial Power of Attorney (“POA”). The practical use of the POA is to enable your agent to pay your bills, sign contracts, and otherwise manage all your legal and business affairs when you are not able to do so. This document is used only in life and terminates at your death. The POA identifies one or more persons to be in charge of your legal affairs when you are not able to do so. With a “General” POA (i.e. not limited) your agent can do most anything that you can do for yourself. This is a very powerful document, and should only be given to a person that you trust completely, such as a spouse, child or dear friend. The POA may be limited by either removing some of the general powers, or adding specific limitations or prohibitions, or provide for only a limited purpose, i.e. to close a real estate transaction.
2. Health Care POA. This is a uniform document created by the American Medical Association and American Bar Association. The Health Care POA is a specific and limited POA that identifies one or more persons to make your health care decisions when you cannot make them yourself; i.e. when consent is required for a procedure or treatment, or alternatives are available and a decision would normally be made by you.
3. Living Will. This is also a uniform document created by the American Medical Association and American Bar Association. The Living Will has a very limited use. You are providing authority to your agent to deny or terminate life-sustaining treatment if you are in a terminal condition and a permanently unconscious state. Two doctors must examine you and agree that you are in the prescribed state. “Permanently Unconscious” generally means that it is a medical certainty that you will never be conscious again and you are not aware of your surroundings. “Terminal Condition” generally means that it is a medical certainty that you are suffering from a condition that will end your life and cannot be cured. The Living Will includes a “Do Not Resuscitate” provision. The goal is to allow death to occur naturally and not be delayed by artificial life support, and save your estate unnecessary medical expenses. Please note that “Comfort Care” continues at all times, and includes any measure taken to diminish pain or provide you comfort, but does not postpone death.
4. Last Will & Testament (“Will”). The purpose of your Will is to identify the persons to be in charge of winding up your legal affairs after your death, and to provide an orderly provision for payment of your debts and gifts to your loved ones. You name an executor, who is the person in charge of winding up your estate, and that is typically your spouse or adult child. You may consider making gifts and leaving specific items of property or money to specific persons or organizations. The rest of your estate is typically left to your spouse, children and loved ones or charities. In cases where you have minor children or grandchildren, you may provide a trust to assist with their education and hold money back until they are mature enough to properly handle a considerable inheritance. You will name a Guardian to care for minor children. It is very important to identify alternates for all persons identified in your Will in case they do not survive you. In addition, you may consider making a final gift to your favorite charities to show your appreciation for a charitable organization that was important to you during your life.
5. Joint & Survivorship Deed, Transfer on Death Affidavit, & Avoiding Probate. These documents allow title to real estate to pass without the need for a probate court action. You should make certain that it will not be necessary to probate your estate upon the death of the first spouse. We will check title to your real estate, and guide you through the process of making certain that no probate court action will be required upon the death of the first spouse. If you wish to also avoid probate on the death of the second spouse, we will guide you through that process and create documents for that purpose as well.
6. Trusts. There are many different types of trusts to accommodate many different functions. A trust generally involves a person or entity that holds property for the benefit of others. If you have a situation that warrants the use of a trust in your estate plan, we will discuss that with you and create a trust that is tailored to your particular needs.
7. Charitable Giving. If you wish to makes gifts to charity, we will discuss alternatives with you including making a special gift in your Will, or transferring assets to a Charitable Remainder Unit Trust (“CRUT”). In a CRUT you make a gift of property to a charity that is held by a trustee, and you retain the income from the property for the rest of your life, plus you receive an income tax deduction for the value of the gift made to the charity (subject to limitations and the deductions are often taken over several years), and the charity receives the property after your death.
Summary. No two estate plans will be the same. When we meet with you to discuss your estate plan, we will take time to explain to you in simple terms everything you need to know so that you will understand your estate plan and how it will work for you. Your estate plan will be carefully tailored to meet your specific needs. In addition to the basic documents discussed above, we will also explain and discuss ways to transfer title to property outside of your Will, and how to properly include the use of Life Insurance, Payable on Death or Transfer on Death financial accounts, and joint and survivorship property in your estate plan.
If you are ready to start estate planning, please call Vernau Law at (740) 587-2637 for an appointment. We have been serving our clients for nearly 30 years with estate planning services. After we meet with you and determine your estate plan, we can often quote you a flat fee for the services to be rendered. We take pride in providing you a professional legal service that is both high quality and affordable.