A Family Estate Plan – A Wonderful Resolution for the New Year!

Posted By: Ken Russell | January 15th, 2015

Finally, you have decided to tackle one of the most important family matters – your Estate Plan.  This blog will review the three basic estate planning documents:

  1. Advance Directive for Health Care
  2. Power of Attorney
  3. Will 

Estate Planning at this level is primarily about your family (or the persons close to you), your assets and your unique issues.   It is meant to address situations where you are unable to express your health care treatment wishes or competently handle your own assets.  It also brings clarity to your directions about your assets should you pass away.  These are critical issues to you as well as to your family, so let’s take a moment and prepare for the meeting.

You should gather important family information – names of children, grandchildren, in-laws, parents or others who may play a role in your planning (addresses and phone numbers).  You should prepare an asset list which includes:

  1. the name of the asset
  2. the value of the asset
  3. how the asset is titled (your name, joint names, company name, etc.)
  4. whether the asset has a beneficiary designation (typical for insurance or 401(k) plans).

Once you are able to get the asset list, see if you can gather the bank statement, brokerage statement, insurance policy and beneficiary designation form, which contains information about each asset.  This is a good start. 

Let’s get a short primer on the documents that will be discussed as well as the choices that you should consider prior to your meeting.  

Advance Health Care Directive –Generally, there are two different aspects to this document:

  1. a Health Care Power of Attorney (HCPOA) – The HCPOA allows you to appoint someone to make medical decisions for you if you are unable to express your wishes.
  2. a Living Will – The Living Will allows you to tell a medical provider or loved one specific direction for your care if you are in a certain medical condition (typically, if you are terminally ill or permanently unconscious, but it can be used for other situations).

Consider the following issues before your first meeting:

  • Who will make medical decisions for you if you can’t make them yourself?
  • What type of medical care do you want if you are terminally ill or permanently unconscious?  For example, do everything possible to keep me alive or do not needlessly prolong my death if the treatment neither aids in recovery nor eases pain.

Financial Power of Attorney–The Financial Power of Attorney is a relatively simple way to arrange for someone to manage your finances if you become unable to make decisions for yourself (or to authorize someone to assist you with your finances).  Without this power of attorney, if you become disabled or incompetent, someone attempting to handle your finances would need to commence a guardianship proceeding in a court of law, which can be costly, time-consuming and invasive.

Consider the following issues before your first meeting:

  • Who will serve as the financial decision-maker if you are unable to make those decisions?
  • Will your Power of Attorney be conditional (effective only if you can’t manage your finances) or non-conditional (effective even if you are competent and can manage your own affairs)?

Last Will & Testament–Everyone is most familiar with this document which disposes of property after death and names a person to manage the affairs (executor) of the deceased person (decedent).  Wills are as different as the many persons making them, but here are the basics that you should consider:

  1. Upon passing, who will receive your assets?
  2. Do you want your assets to pass outright or in trust (a trust is an arrangement where a person (trustee) oversees assets for a beneficiary and uses trust assets in accordance with instructions left by the person making the trust for the benefit of the beneficiary).  A trust arrangement may be used, for example, for a child.  There are also more sophisticated trust arrangements which address different situations.
  3. Who will manage your estate (executor)?
  4. If your children are minors, who raises them in your absence (guardian of their person) and who would watch over their assets (guardian of their estate).

Remember that these are only three basis Estate Planning documents that everyone should execute.  These descriptions are meant as general information and are not tailored to your specific situation.  There are many additional documents, such as Trusts, that may be appropriate for you if your estate is more complex.  At your first meeting, we will address all of your estate issues and discuss the various options to tailor your Estate documents to your exact situation.

Baratta, Russell & Baratta offers deep knowledge and experience in estate planning and trusts. Our primary goal is to understand what you want, and then tailor a plan to make that happen as efficiently as possible. Please feel free to call us at 215.914.2222 with any questions you may have in regards to setting up an Estate Plan for your family and loved ones.

We look forward to meeting with you.

About the Author

Ken Russell is the principal attorney in Baratta, Russell & Baratta Trusts & Estates department. Ken has been providing estate planning and administration legal advice for over 20 years. Ken understands the importance of your legacy and ensuring your loved-ones receive the fruits of your lifetime of effort.

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