Things to Consider for Your Estate Plan
When it comes to estate planning, many people are familiar with the options presented by wills and trusts. However, there are several other popular estate planning tools that you may not be familiar with that you may want to discuss with an elder law lawyer about incorporating into your estate plan. The following is a brief overview of these options.
Power of Attorney
There are different power of attorneys that an individual should include in their estate plans. Instead of addressing decisions after their death, powers of attorney address necessary decisions in the event the person becomes too ill or incapacitated to make these decisions on their own. Tragically, this can happen at any age, due to not only illnesses but can also occur if the individual is injured in a catastrophic accident.
A general power of attorney grants another individual the power to make all decisions involving finances and healthcare. Some people prefer to have more specific types of power of attorneys in place that narrow the scope of the person’s chosen authority. They may have one person who is designated power of attorney for financial issues only. This person is in charge of handling all financial decisions and oversight of assets. The individual then names a second person as their healthcare power of attorney. This individual is in charge of making all final decisions over the medical treatment they will receive if they do not have the capacity to do it on their own.
In addition to having a healthcare power of attorney, it is also important to include a living will in your estate plan. A living will is your way of specifically addressing what your wishes are when it comes to any life-sustaining treatments or procedures that you would agree to. By having this document in place, your final wishes will be kept, regardless of what your healthcare power of attorney may decide. Although an elder law lawyer may recommend you pick someone who will abide by your wishes, it is also not uncommon for loved ones to want medical professionals to do everything they can to save a loved one’s life, even if there is no hope. Their grief can cloud their judgment and they may make decisions you would not agree to. A living will ensures this does not happen.
A “pour-over will” is when a gift is made from assets covered in the last will and testament to a trust. This is done by including a clause – referred to as a pour-over clause – in the will which states that any asset not mentioned in the will should be placed in a trust. A trustee is named to oversee the contents of the trust and administered based on the instructions that the decedent stated in the pour-over clause.
A pour-over will is a smart tool to use to protect any assets that may have accumulated after the will is executed, but before the decedent had a chance to include them in the will. Otherwise, these assets become part of the total estate and could be distributed in a way the decedent would not have wanted.
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