What is a Last Will and Testament?
Very simply it is a document that directs how your property will be distributed after death. The Will also designates the person’s choice as Executor, and, if you have minor children, will appoint a guardian. It must be in writing and executed in the manner set forth by the statute to be effective.
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Why do I need a will since everything will just automatically pass to my spouse?
The idea that everything will automatically pass to a spouse is one of the most common misconceptions in the area of estate planning. If there is not a will then assets will be distributed pursuant to the Massachusetts intestacy statute which provides for children and other family members as well as the surviving spouse. This could leave a spouse with insufficient assets, particularly as he or she becomes older and the children develop independent lives. Also, since the intestacy laws require that property be divided exactly as called for in the statute, it can result in the forced sale of assets that the decedent hoped to keep in the family (including the family home, heirlooms, or other valued personal property).
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What is a Durable Power of Attorney?
This document grants to a specifically-designated individual the power to act for you when you become incapacitated or are otherwise unable or unwilling to act for yourself. The power can be general or specific. The power is, in most cases, effective immediately although you can choose to have it effective only upon disability.
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Why is a Durable Power of Attorney important to the estate planning process?
A Durable Power of Attorney is a crucial estate planning document. It allows another, specifically designated individual, to act in your place in certain instances. Without such a document, an individual’s family could be forced to bring a costly legal petition for the appointment of a guardian to allow even the most basic transactions to be performed. Without having the document, family members may disagree as to the proper person to act as attorney or disagree on what steps to take, increasing legal costs substantially. Powers of attorney can be as expansive or limited as the individual desires. In general it always includes the right to handle banking needs and other basic financial obligations, and often is expanded to allow the making of gifts and handling real estate.
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What is a Health Care Proxy?
A Health Care Proxy appoints a specifically-designated person to make health care decisions for you when you are unable to make those decisions for yourself. The power granted in a Health Care Proxy is effective only when your physician certifies that you are unable to make a reasoned decision for yourself.
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Does a Health Care Proxy address end of life issues?
As with the Durable Power of Attorney, the Health Care Proxy is essential to insuring that a person’s wishes are carried out when they are no longer able to make decisions for themselves. The Health Care Proxy allows another person to make necessary medical decisions when the individual is no longer able. The power given to the designated proxy is usually general in nature. The designated individual is responsible for considering all possible medical alternatives and then making a decision based on the applicable medical advice. However the Health Care Proxy does not deal directly with end of life issues as this is a matter for the Advanced Directive (or Living Will). As with the Durable Power of Attorney it is again important to stress that without a valid Health Care Proxy the chance of having to engage in costly legal proceedings greatly increase.
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What is a Living Will or Advanced Directive?
A Living Will is a document that sets forth your instructions as to what to do in the event that you are suffering from a terminal illness and your physicians determine that there is no possibility of a meaningful recovery. The directions often state simply that one does not wish to be kept alive by artificial means (e.g. feeding tube, respirator, etc …). It is important to note that Living Wills are not recognized under Massachusetts law, and as such, are not required to be followed. However, we strongly recommend that you execute a Living Will so that your family and physicians will fully understand your wishes in such circumstances.
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Who Should I Appoint as my Executor, Health Care Proxy and Durable Power of Attorney Holder?
This decision is, of course, always up to you. The most important consideration is that the person or persons that you appoint be an individual(s) that you trust. Frequently our clients choose their spouse or another very close family member. Even for complicated estates we recommend that you appoint a trusted family member or close friend. Although the complexities may require that you hire a professional to assist in moving through the process, it is still best to have the trusted family member or friend be the primary representative so that you can be certain that your desires and concerns are always kept in mind.
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Can a Properly Drawn Estate Plan Avoid Probate?
It is possible. Certain types of property are not considered part of the probate estate. Transfers to a trust place property outside of the probate estate. In that case the Trust document itself dictates the method of distribution. Jointly held property passes to the other owner or owners automatically. This type of property includes joint bank accounts and real property (depending on how the title is held). Life Insurance benefits also can pass outside of the estate if the policy is set up with appropriate beneficiaries.
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How Difficult is it to Create an Estate Plan?
It is really not that difficult. You will have to collect all of the information necessary to allow for the proper formation of your estate plan, and there are often some difficult decisions that you need to make as to your property and representatives, but we have attempted to make the process as easy as possible by providing a questionnaire that you can fill out and bring with you to your consultation visit. We can then contact you to make an appointment to review your questionnaire and begin to formulate a plan.
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How Often Should I Review my Estate Plan?
You should review your plan every three to five years. Circumstances in life change and these changes can affect the manner in which your wishes, as expressed in your plan, are carried out. You should also review your estate plan earlier if any of the following occur:
- You marry (upon marriage any prior Will is automatically revoked)
- You divorce (all provisions concerning a prior spouse are automatically revoked upon divorce
- Legal separation
- Marriage, divorce or legal separation of a child or grandchild
- The birth of a child or grandchild
- The purchase or sale of a substantial asset (i.e. house)
- The change in health of a previous appointee
- The death of a previous appointee
- A change in applicable laws
- A change in assets
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