Estate Planning is the process of planning the transfer of your personal assets at death to your beneficiaries. The attorneys at Millhorn Elder Law Planning Group will help you plan your estate in a manner that meets your goals, whether drafting a Last Will and Testament or a Revocable Living Trust. We are sensitive to the personal nature of estate planning and will address your unique needs.
In addition, we will create Durable Power of Attorneys with health care surrogate provisions to ensure that in the event you become incapacitated, you have appointed someone to make financial and medical decisions for you. Living Wills are also important to include in your estate plan. Living Wills give specific instructions to your doctors and loved ones concerning the withholding of life-prolonging treatment in the event you are diagnosed with a terminal condition.
Many people believe that estate planning is only for people who are particularly wealthy, have elaborate schemes in mind for passing their money to their heirs, or for people who are acutely ill and contemplating their death. This could not be farther from the truth!
Persons who fail to plan during their lives and die without creating a will ‘die intestate’.Each state has laws that dictate how an intestate person’s property will be distributed leaving you with absolutely no control. Property may go to people you don’t want and in ways that you never intended. Dying intestate means no tax planning was done on your behalf.
Estate planning is for every husband, wife, mother, father, grandparent, business owner, professional, or anyone else who has someone they care about, are concerned about providing responsibly for their own well being and for the well being of those they love, and for anyone who seeks to make a difference in the lives of others after they’re gone. Estate planning is not ‘death planning’; it’s ‘life planning’, and an essential and rewarding process for individuals and families who engage in it.
When done properly, estate planning requires that a highly trained individual lead you through one or more in-depth meetings to uncover your hopes, fears, and expectations for yourself and for those who are most important to you. This process almost always requires the preparation of several sophisticated legal documents, but those documents themselves are not ‘estate planning.’ Planning is a process, represented by a complete strategy that is properly documented and maintained by a professional who has taken the time to get to know you, and who is committed to continuing to serve you.
Estate Planning Maintenance
Your estate plan is a snapshot of you, your family, your assets and the tax laws in effect at the time it was created. All of these change over time, and so should your plan. It is unreasonable to expect the simple will written when you were a newlywed to be effective now that you have a growing family, or now that you are divorced from your spouse, or now that you are retired and have an ever increasing swarm of grandchildren! Over the course of your lifetime, your estate plan will need check-ups, maintenance, tweaking, maybe even replacing. So, how do you know when it’s time to give your estate plan a check-up?
Generally, any change in your personal, family, financial or health situation, or a change in the tax laws, could prompt a change in your estate plan. [Top of Page]
Click on any of the Common Estate Planning Documents Below to Learn More:
- Last Will and Testament
- Revocable Living Trust
- Pour-Over Will
- Durable Power of Attorney
- Health Care Power of Attorney/Surrogate
- HIPAA Authorization
- Living Will/Advanced Directive
- Pet Trust
Last Will and Testament
A will ‘ or a ‘last will and testament’ ‘ is a legal document that tells the probate court how you want your property distributed after you die, and who has the power and responsibility to wrap up your affairs. Through the probate process the court will give the ‘executor’ of your will the authority to gather all of your property, pay any remaining creditors’ bills, and distribute your remaining property as you specify in your will.
Because the will takes effect only after a court determined that it is a valid document, a judge must act before your executor can step in and manage your estate. [Top of Page]
Revocable Living Trust
Perhaps the most common type of trust is the revocable living trust. As the name implies, revocable trusts are fully revocable at the request of the trust maker. Thus, assets transferred (or ‘funded’) to a revocable trust remain within the control of the trust maker; the trust maker (or trust makers if it is a joint revocable trust) can simply revoke the trust and have the assets returned. Revocable trusts can be excellent vehicles for disability planning, privacy, and probate avoidance.
REVOCABLE LIVING TRUST based estate plan provides instructions that will allow you to:
- Control your property while you are alive
- Take care of you and your loved ones in the event of disability
- Pass your property to your heirs when and how you want while maintaining privacy
- Ensure that you and your spouse have sufficient assets to maintain your standard of living.
- Maintain maximum control and flexibility during your lifetime.
- Provide for you in the event you become disabled.
- Simplify administration upon your death or disability (avoiding probate & guardianship).
- Avoid having your private matters being made public unnecessarily.
- Ensure that the efforts you desire are used to save your life.
- Have your property continue to benefit the survivor after one of you dies.
- Protect your assets so that they cannot be lost as a result of remarriage after the death of one of you.
- Ensure that the persons you select in fact become the guardians of your minor children.
- Protect your children’s or grandchildren’s inheritance from mismanagement.
- Structure your children’s or grandchildren’s inheritance in such a way that it installs values and virtues.
- Educate your children and grandchildren.
- Reduce the risk of litigation from heirs who receive less than they think they are entitled to.
- Minimize income taxes to the extent possible.
- Avoid or minimize capital gain tax on the sale of assets.
- Eliminate as much estate tax as possible. [Top of Page]
A ‘pour-over’ will is a will with a safety net provision that ensures that any property you fail to transfer to your living trust during your life will be transferred to your trust through the probate process. It will transfer all non-trust assets to your trust that are not controlled by beneficiary designations or by ownership with a joint tenant. Your goal is to avoid probate by ensuring that your pour-over will controls nothing. You must transfer all your assets to your trust during your life to avoid probate. Your will is merely your backup to ensure that all your assets are ultimately controlled by your living trust.Who will make decisions for you if you are unable to make them for yourself? Who will have the power to sign documents on your behalf, or make sure your bills get paid? [Top of Page]
Durable Power of Attorney
Without a durable power of attorney, someone who is mentally incapacitated must be taken to guardianship or conservatorship court to have a decision maker named for them by a judge. A carefully written durable power of attorney will allow you to name someone you trust to make decisions for you if you become disabled to the point of no longer being able to make those decisions yourself. [Top of Page]
Health Care Power of Attorney/Surrogate
A healthcare power of attorney allows your trusted friend or family member to make medical treatment decisions for you if you are unable to communicate your wishes to doctors. Without one, you must have a guardian or ‘conservator’ of your person appointed by the court before decisions can be made on your behalf.
A healthcare power of attorney not only saves precious decision making time, but it also makes sure that the individual you trust the most has the power to make these most important decisions for you if you are unable to make the decisions on your own. [Top of Page]
A Durable Power of Attorney and Health Care Power of Attorney should contain HIPAA Authorization provisions to ensure that your named decision maker is able to access your ‘private’ information. The Health Insurance Portability and Accountability Act of 1996 (HIPAA), absent a written authorization from the patient, a health care provider or health care clearinghouse cannot disclose medical information to anyone other than the patient or the person appointed under state law to make health care decisions for the patient. The Regulations promulgated under HIPAA specifically authorize a HIPAA Authorization for release of this information to persons other than you or your personal representative. Thus, you should consider creating such an Authorization so that loved ones and others can access this information in addition to the personal representative.
Consider acquiring a HIPAA Authorization for loved ones and others who potentially need access to your medical information if you become disabled. [Top of Page]
Living Will/Advanced Directive
A living will or directive to physicians directly informs your doctors that you do not want extraordinary medical measures taken, especially those that would cause you pain or discomfort, if those measures would only prolong the dying process. This document backs up your health care power of attorney. Anyone can deliver this document to your doctors if your agent under your health care power of attorney is unavailable to make health care decisions for you. [Top of Page]
For many pet owners, pets are members of the family. Given the feelings of many individuals towards their pets, and the costs of care and longevity of some types of pets, planning in this area can be of critical importance. Today, thirty-eight states and the District of Columbia have enacted statutes pertaining to pet trusts, and others have legislation pending (Florida Statute §736.0408). These statutes allow virtually any third party designated by the terms of the trust to use the trust funds for the benefit of pets.
Some state statutes specifically limit the terms of a pet trust. For example, some states limit the amount of money an individual can leave in trust for his or her pet to the amount required to care for the animal over the term of the trust. The trust must distribute any excess funds to the beneficiaries who would have taken them had the pet trust terminated.
The pet’s current standard of care determines the endowment amount required to provide care for the pet. Factors include: the cost of daily care (food, treats, and daycare), veterinary care (yearly teeth cleaning, shots, nail trimming, and emergency care), grooming, boarding, travel expenses, and pet insurance. Additional factors may apply in particular cases. For example, horses are expensive to maintain and require exercise, training, and a large tract of land; some birds and reptiles have very long life expectancies; and care of some pets will require construction of a special habitat on the caregiver’s property.
Even if your state does not have a specific pet trust statute, a pet owner can name a human caregiver as the beneficiary of a trust, require that the distributions to the beneficiary are dependent on the beneficiary caring appropriately for the pet, and require the trustee to ensure that the beneficiary is properly caring for the pet using trust assets. This type of trust may be used without regard to whether the state has a specific pet trust statute.
By discussing these issues with your estate planning attorney, pet owners can ensure that all of their loved ones are cared for, even when the owner is unable to care for them directly. [Top of Page]
If you are interested in learning more about the legal assistance our attorneys can provide in drafting a comprehensive Estate Plan, please contact our firm at (352) 753-9333.