Everyone, regardless of age or financial circumstances, can benefit from some legal planning designed to address potential medical and end of life care as well as estate issues.
Ensuring that you have a valid and up-to-date Will is one of the most important pieces of planning one can do – it may spare loved ones from potentially expensive and stressful disputes and litigation about your assets, funeral arrangements, and more. Change in marital status, children, purchasing a home, death of beneficiaries and new tax laws are all reasons to update an existing Will.
The following covers some of the most notable reasons to make a Will.
CHILDREN: Without a Will, the Court makes the final decision about who takes care of your children. A Will allows you to provide for your children in the event of your death, including specifying guardians and setting aside funds for the care of your children.
ESTATE PLANNING: Creating a Will gives you sole discretion over the distribution of your assets, including any charitable donations you wish to make. You can decide how your belongings, such as cars, heirlooms or family property interests should be distributed, and designate the person (known as an executor) responsible for carrying out the distribution of your estate. If you have a business or investments, your Will can provide instruction for handling these assets.
Providing explicit direction as to disposition of your assets minimizes tensions between survivors – relatives squabbling over your possessions can weaken what may have otherwise been a strong family.
TAXES: A skillfully written Will can help minimize any estate taxes. The law regarding taxation on estate assets depends upon your jurisdiction; for instance Georgia (as of 2015) does not collect estate tax, so Georgia estates would only be subject to federal estate tax. The federal estate tax exemption varies by year – for 2015 it stands at $5,430,000. There are a variety of legal options to managing potential estate tax liability, including trusts.
Durable Financial Power of Attorney
A power of attorney is a legal document that authorizes someone to act for you. By contrast, a durable power of attorney creates an agency relationship that only goes into effect in the event you become incapacitated. A durable financial power of attorney allows you to designate an agent to maintain your financial affairs while you are unable to do so, without any need for court involvement.
Durable Power of Attorney for Health Care
When you make a durable power of attorney for health care, you name a trusted person to oversee your medical care and make health care decisions for you if you lose the capacity to make those decisions for yourself. Your agent will work with doctors and other medical providers to make sure you get the kind of care you wish to receive. When arranging your care, your agent is legally bound to follow your treatment preferences to the extent that he or she knows about them.
It is advisable, though not mandatory, to make separate durable powers of attorney for financial and medical purposes. This will keep your financial details separate from your medical history, meaning that financial institutions will not receive your personal medical details and your medical care providers don’t have your financial information.
Also known as an Health Care Declaration, this is a legal document designed to address end of life medical care. A living will memorializes your wishes in the event that you wind up in a persistent vegetative state or irreversible coma and can no longer make and communicate your own wishes; in that event, a living will can help your family decide how to handle your medical treatment.
Some states, such as Georgia, combine a durable power of attorney for health care and living will into a single document, commonly called an Advance Directive For Health Care. For more information, see The State Bar of Georgia website or contact this office.