What Estate Planning Documents do we all Need?

So many important discussions about estate planning and writing a will are emotionally challenging as they ask those involved to come face-to-face with their mortality. But these are important discussions, says a recent article, “Elder Law Guys: All the documents to have in place when you’re an adult caregiver,” from Pittsburgh Post-Gazette. The sooner these conversations take place, the better.

Here are the documents needed:

General Durable Power of Attorney. The financial POA is the most essential estate planning document. An agent is named to stand in for the parent or other person and make all financial and legal decisions. Name not just one but two successor agents to serve if the primary agent cannot or will not serve when needed. If no POA or agent can serve, the family will need to petition the court to have a judge name a guardian to manage the person’s financial affairs. There’s no guarantee that the court will name a family member. Speak with an estate planning attorney to ensure the POA permits the specific actions you want the agent to be able to take.

Durable Healthcare Proxy and a Living Will.  For the Healthcare Proxy, an agent is named to make health care decisions for the person. It’s advised to name two successor agents in case the primary person cannot or does not wish to serve in this capacity.

. In other states A Living Will contains the person’s wishes regarding receiving life-sustaining treatment in the event they can’t make their own decisions and the treating physician has determined the patient is either suffering from an irreversible coma, is in a persistent vegetative state, or an end-stage medical condition not survivable even with treatment. Massachusetts is one of only a few states that do not recognize Living Wills as legally binding. However, although not legally binding, a Living Will can help family, health care providers and courts understand your wishes and desires when making health care decisions on your behalf.

Last Will and Testament and Trusts. The last will and trusts both dictate how property will pass, but the will directs how property is passed upon death. A life time created trust contains provisions to manage assets during a person’s lifetime. Assets owned by a trust don’t go through probate, so they transfer directly to beneficiaries, and their value and the identity of beneficiaries remain private.

Suppose there are family members who are disabled. In that case, the estate plan should include a Special Needs Trust to hold any inheritance from a disabled beneficiary who receives needs-based government benefits. Otherwise, the disabled recipient will become ineligible for government benefits. Depending on the circumstances, parents may want assets to be held in trust for other beneficiaries until they can manage their inheritances wisely.

Asset Protection Trust. An Irrevocable Medicaid Shelter Trust holds assets to shelter them from the cost of long-term care and a Marital Deduction Trust can reduce or eliminate estate taxes for beneficiaries. An estate planning attorney will know which type of Asset Protection Trust will be most effective for your situation.

Beneficiary Designation Forms. All accounts or assets with beneficiary designations should be reviewed to be sure the named beneficiary is correct.

These documents must be reviewed every three to five years to ensure they align with the parent’s wishes. Estate and tax laws change, relationships change, and people move and pass on, so it’s important to keep these documents updated.

Reference: Pittsburgh Post-Gazette (July 8, 2023) “Elder Law Guys: All the documents to have in place when you’re an adult caregiver”

Book a Call with attorney John A. Laine to learn more.