Many people think that estate planning is only for rich people who have a lot of money. That’s simply untrue! There are a number of situations in which you can benefit from estate planning during your lifetime.
Financial and Health Care Powers of Attorney and Advanced Directives
Maybe you’ve heard about Powers of Attorney or Advanced Directives. If you’ve ever gone in for a medical procedure, you’ve probably been given a handout in the hospital waiting room. These two documents serve distinct functions, but together give you control of how you will be treated if there comes a time that you are unable to communicate those wishes.
A Power of Attorney (POA) is, put simply, a paper that authorizes another person to make decisions on your behalf. A POA may be granted in business settings, family matters, real estate transactions, or medical situations. When drafted properly, the POA gives another person, known as an agent, the legal right to make decisions (as outlined specifically in the POA) on behalf of the person who made the POA, known as the principal. POAs can be created to last a specific amount of time (for instance, if you own a business but will be unreachable during an extended vacation on a remote island), or from a set start date lasting indefinitely.
Advanced Directives can have great impact on the way you live your life. If there comes a time that you are unable, either due to physical or mental disability, to make decisions regarding your medical care, an Advanced Directive tells your agent whether you want to be kept alive my heroic measures or life sustaining means. Advance Directives only come into play if you are terminally ill, in a persistent vegetative state, or you are suffering from an end-stage condition, and two doctors certify you aren’t going to get better. Also with an Advance Directive, you can create a detailed list of medical treatments you are willing to undergo, as well as treatments that you do not wish to experience under any circumstances. These are truly life and death decisions, so you should not undertake them without great thought and an experienced attorney to make sure that your wishes will be properly recorded so they can be carried out accurately should the time come. The most important aspect of an Advance Directive is that you are the one making these decisions about your life and not leaving it up to your loved ones to make those hard end-of-life decisions which may cause those loved ones to live with endless guilt.
Perhaps you have a relative or close friend who has become incapable of making important decisions in their lives. It is really tough to sit by and watch somebody put themselves in one precarious situation after another. You may be able to help. A Guardianship can be established by seeking court approval to take over the affairs of a person who has become unable to do so on their own. Once granted a Guardianship, the Guardian (sometimes called a conservator) takes over all financial, legal, and health care decision making powers. Our courts do not take Guardianship lightly because these situations involve a significant shift in power. Guardianship will only be granted if something less restrictive, like a Power of Attorney, is no longer a viable option.
Special Needs Trusts
People with special needs and disabilities, who receive federal, state, and other benefits, need to take extra care when making financial decisions to ensure compliance with Supplemental Security Income (SSI) and Medicaid. If you or a loved one receive SSI or Medicaid and are going to receive money either from an inheritance or as part of a legal settlement, that newly-received asset has the possibility to disqualify you from receiving SSI and Medicaid benefits. In these circumstances, a Special Needs Trust can be established to make it possible to receive both the benefits of SSI and Medicaid and retain the additional asset without suffering the negative consequences. A Special Needs Trust appoints a Trustee– a person to be in charge of distributing the money placed into the trust as necessary and only for the benefit of the disabled beneficiary. Special Needs Trusts are irrevocable, so it is critical to appoint a Trustee that understand the complicated rules regarding SSI and Medicaid benefits, and is willing and able to make sound financial decisions on your behalf for many years to come.
So, you see, there are reasons to speak with an attorney that’s knowledgeable and experienced in dealing with Estates & Trusts issues even when you aren’t worried about what will happen to your things after you die. Contact the skilled and sensitive attorneys at Ferrante & Dill, LLC at 410.535.6100 to see how we can help you prepare these critical documents.