Planning an Estate: The Major Components

May 15, 2023Filed Under: Estate Planning

In an estate plan, assets are distributed in accordance with your wishes, and your loved ones are provided for after your death. It requires organization and strategy and begins with five key legal documents that can address many areas of estate planning concerns.

Proper estate planning can provide tax savings and asset protection so that the bulk of your estate remains intact as it transfers to heirs. These major components of estate planning can be tailored to your individual needs and goals, regardless of the size of your estate. All estate documents must be part of a legally valid and enforceable plan to fulfill your wishes.

Major Components

A robust estate plan involves much more than simply creating a will. An estate planning attorney can help you craft a custom plan using these major components to meet your goals and needs while complying with state and federal laws.

Wills

A will is a legal document outlining how a person’s asset distributions will occur after death. An executor or personal representative named in the will oversees the asset distribution, proper court filings, and final tax returns for the decedent’s estate. When applicable, your will can appoint a guardian for minor children.

Without a will, known as dying intestate, the court implements asset distribution according to your state law which may not align with your intentions. It’s important to note a will only applies to assets owned solely in the name of the person who made the will. Jointly owned assets or those held in a trust pass directly to a designated beneficiary.

Trusts

A trust is a legal arrangement in which a trustee holds and manages assets to benefit one or more beneficiaries. Trusts can help avoid probate, minimize estate taxes, and care for minors or those with special needs. A trust is not subject to public probate proceedings as in the case of a will and provides greater privacy as assets don’t become part of public records.

There are many types of trusts, but the most common is a revocable living trust. It allows the person creating the trust, known as the grantor, to retain control of the assets during their lifetime. Upon the grantor’s death, the assets then transfer to the beneficiaries.

Powers of Attorney

A power of attorney is a legal document appointing someone to act on your behalf if you become incapacitated. This individual can manage your finances, make healthcare decisions, and handle other important matters when you can’t.

There are four types of powers of attorney:

A general power of attorney is used when you are healthy and mentally capable.
A durable power of attorney is effective upon signature and continues if you become incapacitated.
A springing power of attorney only becomes effective if you become incapacitated.
A health care power of attorney, surrogate, or proxy allows a person you trust to make health care decisions when you can’t communicate them.

Selecting someone you implicitly trust and know will represent your interests is crucial. They will have significant control over your affairs.

Healthcare Directives

Also known as living wills, advance directives, and other names depending on the state where you live, this combination of legal documents allows you to specify your wishes for medical treatment if you can’t communicate them yourself. The documents enable you to name an individual to follow your instructions and relay medical decisions to family and professionals.

A healthcare directive can include whether you wish to receive life-sustaining treatment, pain management, and other end-of-life care. They provide clarity and peace of mind for you and your loved ones during difficult times.

Beneficiary Designations

Beneficiary designations specify who will receive assets such as life insurance policies, retirement accounts, and other financial accounts after your death. Maintaining updated beneficiary designations is important when life circumstances change, such as divorce, marriage, or the birth of children. These accounts will pass directly to the listed beneficiary.

What if You Don’t Have a lot of Money or Assets?

Even if you don’t think you have enough money or assets, having an estate plan is still important for the following reasons:

● Guardianship of Minor Children

If you have minor children, it’s critical to designate a guardian if something happens to you, your spouse, or other parent. Without naming a guardian, the court will appoint someone to care for your children; this guardian may not be someone you would select.

● Healthcare Decision-Making

Even absent significant assets, you may still want to specify your healthcare wishes in the event of incapacity. An advance healthcare directive can help fulfill your wishes and provide clarity for your loved ones during a difficult time.

● Avoiding Probate

Going through probate can be time-consuming and expensive for those you leave behind. A well-crafted estate plan avoids probate and ensures your accounts and belongings are distributed according to your wishes and outside the public record.

● Protecting Your Digital Assets

Consider your online presence, including email accounts, social media profiles, digital photos, music, income-producing online storefronts, influencer ad revenue, and cryptocurrencies. More than ever, people have a tremendous presence or income in the digital world. An estate plan can address what will happen to your digital assets after your death.

Do I Need an Estate Planning Attorney?

Given the complexity of estate planning, working with an estate planning attorney is beneficial. An attorney can help you navigate the various components of estate planning and ensure your plan is tailored to your individual needs and goals in compliance with state and federal laws.

Each component of estate planning can affect another. For example, a trust can work with a will to provide for the distribution of assets not covered by the trust. A power of attorney can manage assets, not in a trust, and an advanced healthcare directive can work with a power of attorney to fulfill your healthcare wishes. Creating an estate plan where all facets complement each offers a smooth transition of your estate to loved ones.

An estate planning attorney can also review an existing estate plan routinely or when significant life changes occur. Regular estate planning reviews keep beneficiary designations current. We hope you found this article helpful. If you’d like to discuss your particular situation, please don’t hesitate to reach out. Please contact our Cincinnati office by calling us at 513-771-2444 and schedule a consultation. We look forward to the opportunity to work with you.

Medical Estate Planning Documents: What You Need to Know

April 24, 2023Filed Under: Elder Law, Estate Planning

Wills, trusts, and transferring assets are typically thought of when people think of estate planning. However, there is another part of estate planning that doesn’t get as much attention. It concerns advance health care planning.

Have you thought about what type of medical care and treatments you want, or don’t want, if you become incapacitated or terminally ill?
Who would you trust to make health care decisions for you if you were not able to make decisions or communicate with the medical professionals who were caring for you?

If you don’t have the answers to these questions in writing ahead of time, decisions may need to be made in court by a judge. The care you get may be different from your wishes or beliefs. And the person selected to make decisions for you may not know what you want or share your values.

To ensure your health care wishes are honored, you need to spell them out in appropriate legal documents commonly referred to as advance directives. You don’t need to wait for later years. Every adult should have advance directives since a serious medical emergency could happen at any time.

Living Will

A living will is a legal document to specify which medical treatments you want to keep you alive if the need arises. You can also use a living will to express your pain management and organ donation preferences.

When considering what to put in your living will, think about your lifestyle, how you want to live, and what aligns with your beliefs and values. Here are some questions to ask when thinking about your living will:

Would you want medical treatments that would extend your life in any situation or just in particular situations?
Do you want a life-saving treatment only if a cure is available or you have a good chance of a full recovery?
Under what circumstances would you consider your life not worth living?
If you can’t eat solid or pureed foods, do you want to be tube fed? If so, for how long?
Do you want mechanical ventilation if you can’t breathe on your own? If so, for how long?
Do you want to be revived by CPR or similar methods if your heart stops?
What type of palliative care do you want if you are terminally ill? Do you wish to die at home or in a medical facility?
Would you like to donate your organs and tissues for transplant purposes?
Would you like to donate your body to science?

There are other options you can consider. An attorney experienced in estate planning and elder law can help you determine the best options for your situation.

Power of Attorney

In a health care power of attorney document, you name a person or persons who can make health care decisions on your behalf if you are unable to make decisions on your own. The name of this document varies from state to state. And how your chosen person (agent or proxy) is referred to also varies from place to place.

Even if you cover several scenarios in your living will, some situations you didn’t anticipate may arise. Having someone you trust to make decisions for you is especially important. When choosing a person to be your health care agent, choose someone who understands you well enough to know what you want and that you trust to make potentially difficult decisions if necessary. It is a good idea to choose at least one backup agent in case your primary agent is unable or unwilling to act.

HIPAA Form

A Health Insurance Portability and Accountability Act form allows you to name individuals who may receive information regarding your medical condition and history from healthcare professionals who are caring for you. Your HIPAA form should include all the agents you name in your health care directives.

Creating Your Advance Directives

Some attorneys combine a living will with a power of attorney into a single advance health care directive document. This is convenient since all the information is in one place. As mentioned before, healthcare documents are usually part of an estate plan, but they may also be stand-alone documents.

Reviewing and Updating Your Advance Directives

Over time your views and wishes regarding your end-of-life treatment may change. Also, you may change your mind about the person you want to make decisions for you. If you decide to update your advance health care directive, talk with your attorney. After updating your directive, make sure it replaces all existing originals and copies of the previous directive to avoid any confusion later.

This article summarizes aspects of estate planning law and elder law. It is not legal advice and does not create an attorney-client relationship. For legal advice, you should contact an attorney.

We hope you found this article helpful. If you’d like to discuss your particular situation, please don’t hesitate to reach out. Please contact our Cincinnati office by calling us at 513-771-2444 and schedule a consultation. We look forward to the opportunity to work with you.

It’s Time to Talk Treatment: Advance Directives Come From Crucial Conversations

December 19, 2022Filed Under: Estate Planning

The thought of our own death is one of the most challenging things we will ever face. Yet it is very important to think carefully about the medical treatment we would want for that challenging time. Medical technology can now keep us alive long after we have ceased to enjoy a meaningful quality of life.

A series of legal rulings around thirty years ago established the rights of patients to decide when life support should be stopped. The fear of being kept alive indefinitely by artificial means led many to create legal documents known as advance directives. An advance directive expresses our wishes about the kind of medical treatment we would prefer. It is called “advance,” meaning ahead of time; and “directive,” meaning our directions for whether we want medical providers to keep us alive at all costs, or whether we would prefer to pass naturally when life becomes no longer meaningful. It is wise to think about this, and to create such a document, well before we are facing the end.

After thirty years, concerns have now shifted to assess whether advance directives really do serve the purpose for which they are intended. Do advance directives really ensure that we receive the treatment we would like?

The short answer is “yes but.”

Yes because it is just as important now to create a legal document by which to appoint a person to help communicate our wishes. The “but” part comes in with the issues raised below.

The answer to these issues is the same as it has always been: to establish a close relationship with one or two people – called “agents” or “proxies” – whom patients appoint to step in when patients can no longer make healthcare decisions for themselves. Patients must talk with their agents so the agents will know, in as much depth as possible, where the patient stands on end-of-life questions.

Over the years, we have learned that advance directives might not work as well as they could. Here are the concerns that have emerged:

➢ It is unrealistic to micro-manage health care in advance. There are so many variables that depend on the particular situation. Treating a complicated illness has been likened to a jigsaw puzzle, where each puzzle piece could fit multiple other pieces; the right fit for each piece must be arrived at, often by a team of various specialists who sort through the pieces and collaborate in assembling the picture. Under those circumstances, it can be difficult, if not impossible, to interpret a legal document that was intended to guide detailed medical treatment for as-yet-unknown conditions.

➢ The “check-the-boxes” approach taken by many “fill-in-the-blank” forms is too crude to be helpful in any but the most general of ways. Without additional detail, these documents don’t adequately address the nuances that almost always arise.

➢ Change is constant and humans are adaptable. It is one thing to imagine, when in good health, that life would not be worth living if, say, one became permanently bedridden. But when the patient is actually in that situation, new meaning in life could emerge. Choices made years in the past might look a lot different in the moment of truth.

➢ The prognosis can change with time. As reported in Kaiser Health News,

A New Paradigm Is Needed: Top Experts Question the Value of Advance Care Planning

if a senior contracted COVID-19 early in the pandemic, and her advance directive stated that she did not want to be placed on a ventilator, doctors tended to assume that the virus was universally fatal to such seniors. Some never got the care that could have saved their lives.

➢ The documents must be readily available, both at patients’ homes and in agents’ hands too. They must not be hidden away and forgotten about, so no one can locate them when they are needed.

The best alternative is to create an effective, current, and available legal document backed up by serious talk between the patient and the agent or proxy. A document that meets legal requirements is essential, but beyond that: conversation in advance is the crucial additional element.

That conversation should occur first between the patient and their agent or proxy, in which they discuss the quality of life issues and what matters most to the patient. The talk should avoid excessive detail for hypothetical situations that may never arise. Rather, the aim should be to provide the agents or proxies with enough information to be able to respond flexibly to unforeseen circumstances.

These conversations can be challenging. Helpful resources to assist can be found at The Conversation Project (https://theconversationproject.org) or the Centers for Disease Control and Prevention (https://www.cdc.gov/aging/pdf/acp-resources-public.pdf).

Then, if the time comes when the patient is unable to speak or make decisions, the agent will be best equipped to convey the patient’s wishes to medical providers. Knowing those wishes in advance, the agent can focus on ensuring that providers furnish as much information as possible to make the hard decisions on the facts as they presently exist.

What if you are alone and without a person whom you trust to be your agent? First, study the guidance resources provided in this article. Then call us to create a legally effective advance directive document that spells out your wishes. And the final step would be to schedule an appointment with your doctor to discuss your wishes. Give him or her a copy of your document.

Again, all must make sure that doctors and agents have copies ready for use. And everyone should also carry a wallet card to inform healthcare providers whom to call in case of an emergency. Print one here,

https://www.aha.org/system/files/2018-01/piiw-walletcard.pdf

provided by the American Hospital Association.

There are no assurances in this life, except that it will end for us all. The hope is that we will have delegated people whom we trust to step in when we need them – and that we will have talked with them about the kind of care we want to prepare for a passing that is as peaceful and merciful as it can be.

How Do Advance Directives Work?

September 26, 2022Filed Under: Estate Planning

Winnie’s nursing home room door is open, and Kevin is standing in front of it, tears running down his cheeks. The medical staff just finished inserted a feeding tube into Winnie – an act Kevin knew she didn’t want. Unfortunately, Winnie couldn’t express her wishes due to advanced dementia, and she had no legal documents that expressed her wishes not to be fed by artificial means. Kevin had no choice but to sit back and watch his wife go through a procedure she didn’t want.

The situation with Kevin and Winnie could have been avoided through the use of proper advance directive. An advance directive is actually a collection of documents. What that includes differs depending on your needs and wishes, along with what the law allows. However, it usually means at least a Living Will, and a Power of Attorney for Healthcare.

The purpose of this set of documents is to allow you to control what happens to your health care in case you cannot speak for yourself. If certain criteria are met, your doctors must consult with your advanced directive before making decisions about your care.

Usually, what this means is that two doctors agree that an individual is terminally ill, permanently unconscious, or at the “end-stage” of a condition. Once that happens, and the individual cannot express their preferences, doctors turn to the advance directive to figure out what the individual wants.

A Living Will determines what happens to an individual making it, unlike a Last Will and Testament, which determines what happens to their money and possessions. A Living Will describes what healthcare providers can and cannot do to prolong your life and/or ease your pain when you cannot express those preferences yourself. For example, do you want to be placed on a ventilator if you cannot breathe on your own? Do you want a feeding tube and IVs set up, and if so, for how long? Do you want to be an organ or tissue donor?

A Durable Power of Attorney for Healthcare lets you choose someone to make healthcare decisions for you when you cannot. They still must follow your Living Will, but they will be able to make decisions not explicitly considered by your Living Will, in accordance with the facts of the situation. In most states, there are “default surrogate consent laws” which allow family members to make treatment decisions on your behalf, but who is chosen to make these decisions and what they choose to do may not be in accordance with your wishes, as it hopefully would be with a Durable Power of Attorney.

Other documents may be part of an advance directive by law, or they may be worth including of your own volition. These include Do Not Resuscitate orders and Physician Orders for Life-Sustaining Treatment, among others. You might also consider an advance directive in case of a mental health crisis.

This is a difficult subject to consider, and it always seems like it won’t be necessary. But nearly 70 percent of Americans don’t have plans in place for a worst-case scenario, which means for some of them, decisions may be made for them with which they would not agree if they had the capacity to choose. For that reason, it is worth thinking about implementing an advance directive even if it seems unnecessary now.

If you or a loved one would like more information about advance directives, please don’t hesitate to reach out. Please contact our Cincinnati office by calling us at 513-771-2444 with any questions.