January is a time of new beginnings and of resolutions for the new year. One resolution we all should make is to have our essential estate planning documents in place. There are several important legal documents that all adults should have, regardless of age. These documents include a will, a durable power of attorney, a healthcare power of attorney and a living will. Unfortunately, only about half of Americans have any of these documents – and the number is even smaller for those under age 50. So what are these documents?
Will – A will allows you to designate where your belongings should go after your death. If you have minor children, you can also designate who will care for your children. If you do not have a will, a court will make these decisions for you. The court would choose who will be the guardian for your children, and this may or may not match who you would have chosen. As to your assets, the probate court will rely on state rules of intestacy to divide your property, again regardless of what you would have wanted.
Trust – A trust is a legal structure that permits management of your assets by a trustee on behalf of your beneficiaries. A living trust is established while you are still alive, as opposed to being created upon your death. You can be the trustee for your own living trust until you are no longer able to manage your financial affairs or pass away, at which point the responsibility for managing the trust passes to someone you designate as a successor trustee. When a trust is structured correctly with the help of an experienced estate planning attorney and properly funded, your entire estate can stay out of probate court. This process not only limits court costs, but it also maintains the privacy of your financial records while enabling your beneficiaries to enjoy the benefits of the trust without disruption or delay.
Durable Power of Attorney (DPOA) – A DPOA allows you to designate someone who can make financial decisions for you. You can name someone to act in this position immediately, or designate that it will only go into effect upon some triggering event, such as incapacity. Without such a document, when an individual becomes incapacitated, be it by trauma, illness or a deteriorating health condition, it will likely be necessary to have a court name a guardian to make these decisions– a sometimes long and expensive process, where once again a court decides who will make these important decisions for you.
Healthcare Power of Attorney (HPOA) – With an HPOA, you can give legal authority to another person to make decisions about your health care if you are unable to make them yourself. This prevents the courts from getting involved if there is disagreement between family members and/or the medical community as to what actions you would want taken.
HIPAA Authorization Form - The Health Insurance Portability and Accountability Act (HIPAA), is a Federal law that requires the establishment of standards to protect the privacy of patients’ health care information. A HIPAA authorization allows you to name individuals who can have access to your medical information.
Living Will – A living will, sometimes known as advanced directives, allows you to make your wishes known as to end-of-life medical care. This can help your loved ones know what you would like to have happen if you are ever in a position that you are unable to express your wishes.
If you already have these documents, great! Perhaps the new year is a good time to give them a quick review to make sure there have not been major changes and that they reflect your current intentions.
Creating these essential documents often makes us address uncomfortable topics such as health, end of life issues, and what will happen when your gone, but making these decisions will make sure that your wishes are understood and followed. These documents can help guide your loved ones during times of extreme stress, and is actually a gift that you are giving to them. Indeed, most people indicate relief after drafting these documents because they realize how helpful they will be to their families and loved ones.
If this is one new year’s resolution that you want to keep this year, please contact the office of McFadden Bushnel LLC in order to make an appointment. We can help you work through the process of developing the legal documents that express your wishes.
This article was originally published on January 3, 2017. The current version includes some additional information.
McFadden Bushnell LLC offers a wide variety of elder law, special needs and estate planning services in the greater Cleveland and Northeast Ohio area, including Shaker Heights, University Heights, Cleveland, Cleveland Heights, Beachwood, Warrensville Heights and throughout the area.