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Estate Planning Documents by Roger Levine, Esq.

Every senior should have five documents in his or her estate plan.  For financial concerns, A Will (Trust) and a Durable Power of Attorney (DPOA) are a must. For health concerns, a Health Care Proxy, Living Will and HIPPA agreement are necessary.

 A Will is a document that directs how any assets in your name alone, whether real estate, personal property or money (in all its myriad forms, such as stocks, bank accounts, CD’s, etc.) is distributed upon your death. By making a will (or a Living Trust) you can determine who gets what (or doesn’t get what), according to your wishes. If you die without a Will, the State will make these determinations for you. A Will ensures the choice will be yours.

 The second financially based document your estate plan should contain is a Durable Power of Attorney (DPOA). If through mental and/or physical infirmity, you become what is considered “legally incapable” of handling your own affairs, the DPOA pre-appoints somebody of your choice to make decisions for you in your interest on your behalf. If no DPOA is in place and you become legally incapacitated, your family, friends, or whoever is close to you, must go to probate court and petition the court to become your conservator, a time consuming, expensive, and nerve-racking experience. By having a simple DPOA in place, this potential crisis may be completely avoided. 

 A Health Care Proxy is a document that appoints an agent to act on your behalf should you be physically and/or mentally incapable of doing so. Without such a document appointing an agent (and usually an alternate), your friends and/or family would be forced to go to Probate Court to get a Guardianship for you, a time consuming, expensive and nerve-racking experience. With a valid Health Care Proxy, the agent should be able to act on your behalf without having to pursue a Guardianship.

A Living Will, a companion document to a Health Care Proxy, is a direct statement from you yourself, stating if you should be on life sustaining equipment, in a vegetative, comatose state, with no chance of recovery, that you would not want to be kept alive by mechanical means in those circumstances. Although a Health Care Proxy appoints an agent to make this decision, the agent (or the medical institution) is under no legal obligation to make the decision you want. A Living Will helps insure that your agent (and the medical institution) will follow your wishes.

 A HIPPA release agreement is a relatively new document (2003) which evolved in response to privacy of health records legislation. Such agreement insures that your health care agent has access to your medical records if needed. Without such a document, a medical institution will often not give your agent your records for fear of violating privacy laws.  

 Trusts can be valuable tools for estate planning purposes but are often misunderstood.  Much confusion exists as to what kind of Trust does what. So, here is a brief overview.

 A Revocable Living Trust can be useful for maximizing the amount of money a husband and wife can leave estate tax free. It can also be useful for avoiding probate if properly administered. Contrary to popular opinion, however, it does not protect assets against potential nursing home costs. An Irrevocable Trust may protect assets against nursing home costs (depending on the amount of time that has passed since establishing the Trust). However, since only the income (and not the principle) is available to the Trust maker, you must be able to live on the income generated. A Testamentary Trust is a Trust established in a Will that can be useful for certain nursing home situations and also for Will bequests you might want distributed over time (instead of all at once).

Trusts can be useful for specific purposes you might have but tend to be more complicated than basic estate planning documents (Wills, Durable Power of Attorney, Health Care Proxy, Living Wills and HIPPA release) If you think a Trust might be relevant for your situation, it might be useful to talk with an estate planning attorney.

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