Protecting Yourself With These Estate Planning Documents
It is important to understand the necessity of certain estate planning documents. The most commonly utilized estate planning documents are Revocable Living Trusts, Wills, Power of Attorneys, Advanced Health Care Directives, and Health Insurance Portability and Accountability Authorization & Waivers (HIPAA).
Revocable Living Trusts
A Revocable Living Trust is a document that transfers your assets to your designated beneficiaries upon your death. Because this type of Trust is revocable, it allows you to be in control of your assets during your life while at the same time providing for your chosen beneficiaries in the event of your death. Revocable Living Trusts are both revocable and modifiable at any time prior to your death. By placing certain assets in your Trust, you are essentially shielding them from Probate Court.
Formal Probate Court has significant costs associated with it, which unfortunately reduces the share of your estate going to your beneficiaries. These proceedings will not only reduce the amount of your inherited estate, but it will also delay your estate from being distributed. The formal Probate Court process frequently takes anywhere from 8 months to 2 years, and sometimes much longer. Having a Trust prepared will help your estate avoid the costly and time-consuming Probate Court process, and allow your beneficiaries to receive your estate in a timely manner.
Wills
A Will grants you the opportunity to distribute your estate to whom you wish, arrange for the care of your children or pets, and memorialize any other express wishes you have upon your death. The downfall of a Will is that the named assets can be subject to the Probate Court process (unlike Trust assets), which can be costly and time-consuming. Therefore, in order to avoid Probate Court, you may want to consider a Trust instead of a Will.
Durable Power of Attorneys
A Durable Power of Attorney allows you to appoint an Agent who can take care of your finances should you become incapacitated. Your appointed Agent can pay your bills, file your taxes, make investment decisions, and handle other personal financial matters that may fall through the cracks in the event of your incapacitation. Without a Power of Attorney, Conservatorship Court proceedings would likely need to occur in order for someone to have the authority to access and manage your personal finances. Through the Conservatorship Court process, you risk your financial affairs being handled by a court-appointed Conservator. This process also takes time, costs money, and the judge may not choose the person you would have chosen to be your Conservator.
Advanced Health Care Directives
An Advanced Health Care Directive (“AHCD”) allows you to appoint an Agent who can make health care decisions in the event of your incapacitation. The AHCD gives your chosen Agent the power to sign consents and releases with hospitals and doctors, helping ensure you get the care you need. An AHCD also acts as your instructions for end-of-life decisions. Such decisions include whether and for how long you would like to be on life support, and whether you would like to be an organ donor.
Along with your AHCD, we will provide you with a free HIPPA Authorization and Waiver form. This form authorizes your health care providers to release information concerning your otherwise confidential medical information to the individuals you have designated to be in charge of your health in the event of your incapacitation.
Written By Alexandra M. Warfield, Esq.
