• Every adult needs an estate plan, even an 18 year old.
• If you want to control your medical and financial future, comprehensive and legally valid estate planning documents are necessary.
• If you don’t legally document your estate plan, your state law and the court will create an estate plan for you.
• Trusted helpers are personal representatives (i.e. executors), trustees, power of attorney agents, and guardians for minor children.  You need all of these trusted helpers to act on your behalf when you cannot.
• Be sure to ask permission before appointing trusted helpers and name back-up trusted helpers, as well.
• Let your trusted helpers know where you keep your estate planning documents and other important papers.  In addition, make sure that they know how to contact your estate planning attorney for guidance.
• Update your estate planning documents on a regular basis, every three to five years or upon the occurrence of a significant event such as a move to a new state, a new child, a new marriage, or a divorce.
• Consult with a qualified estate planning attorney for the design, drafting, execution and funding of your estate plan.   Do-it-yourself estate plans are typically doomed to fail.
• You absolutely need a will, health care power of attorney, HIPAA release and financial power of attorney.
• You are strongly encouraged to execute a living will, organ donation authorization and revocable living trust.
• Disclose personal family and financial information to your estate planning attorney, even if you’re not sure if it’s important or you’re ashamed of the information.  Know that your attorney needs this information to properly design your estate plan and all conversations are kept confidential.  Your attorney will not judge you or your loved ones.

If you don’t have a basic up-to-date, legally valid estate plan in place, consult with a qualified estate planning attorney.

• A living will is typically part of a comprehensive estate plan.
• It’s an advanced medical directive, meaning that you make a decision now about a potential future situation.
• A living will is informed consent.  In fact, it’s clear and convincing evidence of your intent.
• Terri Schiavo didn’t have her wishes in writing.  She did NOT have a living will.  Because her parents didn’t want life support disconnected she was kept alive, while brain dead, for 15 years.
• Your health care agent or family members cannot override your living will, even if they disagree with your decision.
• Let your loved ones know that you have a living will and where you keep it (and where you keep your other important documents).
• Consider the use of an online document storage system such as Docubank (www.docubank.com) so that your living will and other health care documents are always available.
• In addition to a living will, you also need a health care power of attorney and a HIPAA release.
• The health care power of attorney authorizes your chosen agent to make health care decisions on your behalf if you cannot give informed consent.
• The HIPAA release authorizes medical personnel to communicate with your agent.  For example, they may discuss whether you are in an irreversible coma or persistent vegetative state, making your living will effective.
• Advanced medical directives are informed consent and cannot be overridden by your agent.

If you don’t have a living will in place, consult with a qualified estate planning attorney.

• Consult with a qualified estate planning attorney and have an up-to-date, legally valid estate plan in place.
• Update your estate plan regularly – every three to five years or sooner if something major changes in your life.
• Follow your estate planning attorney’s advice for proper asset ownership.  If you have a trust, fund it.  Avoid jointly owned property and make sure your beneficiary designations match your current intent.
• If your beneficiaries have any special needs or issues, disclose them to your estate planning attorney during your consultation.  If you already have a plan in place, call your estate planning attorney and ask if the development affects your plan.
• Pass assets in a lifetime protected trust, not outright.  Trusts provide asset protection so the assets are used only by your beneficiaries and not your beneficiaries’ creditors.
• Include special needs language in your trust so that an inheritance doesn’t disqualify a beneficiary from receiving governmental assistance.
• Include addiction language so if your beneficiary is suffering from a drug, alcohol, or gambling addiction, an independent trustee will distribute assets for the benefit of your beneficiary, but not directly to him or her.
• Include specific personal items for individual beneficiaries so they have something special to remember you by.  Include a fair distribution system for remaining personal items.  A high percentage of family fights are over personal possessions and final arrangements.
• Write down and share your wishes regarding final arrangements.
• Include an ethical will in your estate plan.  This means that you jot down your wishes, guidance, and words of love for your loved ones.
• During your lifetime, tell your loved ones that you love them and that you’ve engaged in thorough estate planning.  Explain who’s in charge when you die or become incapitated.

If your current estate plan isn’t in writing or doesn’t fully consider your beneficiaries’ needs, consult with a qualified estate planning attorney.

Without a will in place, you’re not in full control over how your property is distributed.  If you choose not to create a will, it’s important to think about a few things.  This will help you get a better idea of how your assets will be distributed.

Do you own property jointly with another individual?  If so, this person will be given your assets after death.  This can be a one way to ensure that your spouse will be given certain property.  It’s important to carefully think through this ownership decision because there are pitfalls to joint ownership, even with a spouse.

Additionally, your state laws will determine how your individually owned assets are distributed after death, if you choose not to create a will.  You may assume that your spouse will get most of your assets, but this is likely not the case.  Many state laws, including Arkansas, ensure that children, even minor children, get a significant portion of an individual’s assets.

Take the time to handle your estate planning affairs so that you’re in full control over how your assets are distributed.  By creating a will, you can outline how you wish for your assets to be given away, making it possible for you to leave a large portion of your assets to your spouse.

If you have any questions, or if you’d like to create a will, consult with a qualified estate planning attorney.

Estate Planning Customization Requires Family and Financial Information

We know that it’s uncomfortable to talk about embarrassing family situations, including addictions such as alcoholism; but it’s necessary.  There is much your estate planning attorney can do to customize your estate plan to help your loved ones and to protect you.  If your plan isn’t customized to your particular situation, it won’t work.

It’s also necessary to disclose family dynamics, health issues, potential divorce situations, financial difficulties, and the like.  It all factors into the design and implementation of a comprehensive estate plan.  Your estate planning attorney will ask you to fill out written forms and then ask you questions during your estate plan design meeting.  The more information that you disclose, the better your estate planning attorney can diagnosis your needs and design an estate plan that matches your needs.

Your Estate Planning Attorney has Heard it Before

Your estate planning attorney won’t judge you, and you can be sure that he or she has previously heard similar stories.  We, as humans, are more alike, and experience more similar situations, than we know.

In addition, rest assured that all your discussions will be kept in confidence by your attorney.

How Your Estate Planning Attorney Can Help

If your estate planning attorney is aware of an addictive disorder, she will take it into consideration when designing your plan.

For example, it would likely be unwise to appoint an alcoholic to a position as a trusted helper such as personal representative (i.e. executor), trustee, guardian for minor children, or power of attorney agent.

In addition, if the person with the addiction is a beneficiary, an outright inheritance could make the problem worse or even kill him or her.  Instead, your attorney can design a life-time protected trust with a professional trustee.  Assets would be distributed to benefit your beneficiary, but not directly to him.  For example, the rent would be paid directly to the landlord and the medical bills would be paid directly to the medical provider.

If you’re in the estate planning process, disclose uncomfortable family, health, and financial issues to your estate planning attorney.  You can trust him or her to keep your confidences and to use the information to help you and your beneficiaries.

This is a good thing, but if you have the choice, and you do, it should be avoided.  Court interference is a total loss of control; plus, it’s expensive, time-consuming, and can be heartbreaking.  Basically, it’s a court case wherein family members, doctors, social workers, and the like have to testify that you are incompetent in a public courtroom.

For financial incapacity planning, all adults need a financial power of attorney and should consider a revocable living trust (it’s a good fit for most people.)

For medical incapacity planning, all adults need a health care power of attorney and HIPAA release and should consider a living will and organ donation authorization.

• Financial power of attorney:  a legal document in which an individual authorizes an agent to act on hisor her  behalf in financial and personal business matters.  Most powers of attorney are effective immediately, but aren’t used until incapacity occurs.  Authorization under a power of attorney ends at death.

• Revocable living trust:  a legal document in which an individual authorizes a trustee to act on his or her behalf  if he becomes incapacitated. The disability trustee has authority to act so long as the trust maker is incapacitated; if capacity is regained or the trust maker dies, then the disability trustee’s authority ends.

• Health care power of attorney:  a legal document that authorizes agents to make medical decisions for the benefit of another if that person cannot provide informed consent.

• HIPAA release:  a legal document that is required for medical privacy laws; it allows medical personnel and health care agents to communicate to named persons (family members, etc.).

• Living will:  a legal document containing an advance medical directive stating that if the principal is in a persistent vegetative state or irreversible coma, no medical heroics, such as life support, will be provided.

• Organ donation authorization:  a legal document containing an advance medical directive, stating that the principal wishes to donate his organs and tissues upon death.

If you don’t have incapacity planning in place, consult with a qualified estate planning attorney.

Follow Trust Instructions

The most important duty your trustees have is to follow your trust’s instructions.  Your trustees are only authorized to act in a particular matter if they can find authorization in the trust document, or under state law.

Examples of Trustee Duties

Trustee duties are outlined in your trust.  Typical duties include protecting and managing assets, paying bills, dealing with financial institutions and creditors, providing for your care if you are incapacitated, paying taxes, and distributing assets to named beneficiaries.

What Does My Trustee Need to Know?

Your trustees must have access to the trust document and will most likely work with a qualified estate planning attorney who will guide them.  Your trustees should read the document and get good advice.  It’s also important that your trustees always act in your highest and best interests; keep your assets separate from their own; keep good financial records of all investments, expenditures, and income; and never use assets as their own, unless the trust documents authorizes such.

Be sure that your trustees have access to your trust document and know how to contact your estate planning attorney. 

Choosing a Trustee

Choose trustees who care about you; are good with money and investments; can work with professionals such as your estate planning attorney, financial advisor, and CPA; can communicate effectively with your beneficiaries; keep detailed records; and stay organized.

When you have a particular trustee in mind, speak with that person to get permission before naming him or her as trustee.  Your first choice may have too much on his or her plate and may not want to take on added responsibility.  In addition, be sure to name contingent trustees (and get their permission) in case your primary trustee is unable or unwilling to serve.

If you need more information on trustee duties or choosing trustees, consult with a qualified estate planning attorney.

Terri Schiavo:  15 Years on Life Support

Terri Schiavo was a young woman living in Florida with her husband, Michael, when she collapsed in their home.  Michael called 911 and Terri was rushed to the hospital; she was hooked up to life support machines.  Like Nancy Cruzan (discussed in part one of this article), Terri did not have a living will, but she had expressed that she didn’t want to be hooked up to machines to artificially extend her life.

The attending physicians made it clear that Terri was in a persistent vegetative state and would not improve.  Her husband sought to have life support removed.  Terri’s parents disagreed.

Years of court battles ensued.  You likely saw news coverage.

Terri was finally removed from life support 15 years after she collapsed in her home.  She died shortly thereafter.

You Need a Living Will

If you don’t want medical heroics at the very end of life, when there is no coming back, execute a living will.  Chat with the adults in your family.  Let your loved ones know how you feel, andlet them know that you’ve signed a living will.

If either you or your loved ones don’t have living wills, consult a qualified estate planning attorney.

Nancy Cruzan

The two most well known life support/right to die cases are those of Nancy Cruzan and Terri Schiavo.  After being injured in a car accident, Nancy Cruzan was kept alive with artificial hydration and nutrition for nearly eight years.

After the first four years and the realization that Nancy was never going to get better, her parents and husband wanted to have the life support removed, but the state of Missouri disagreed.  The case went on for years, and made it all the way to the Supreme Court.

The Court ruled that a living will is clear and convincing evidence of the desire to not be kept alive with life support machines if an individual is in a persistent vegetative state.  Nancy didn’t have a living will, therefore, the state, at that time, was permitted to keep her on life support since there was no clear and convincing evidence presented.

After the Court’s ruling, Nancy’s parents and husband submitted additional evidence which finally constituted “clear and convincing” evidence of her desire, and she was removed from life support.  She died 19 days later – 8 years after her car accident.

If you don’t have an up-to-date living will, consult with a qualified estate planning attorney so that you never share the same fate as Nancy Cruzan.  Please read part 2 of this article, wherein we discuss Terri Schiavo’s life support/right to die case.

Tip 1: Update your will. A last will and testament is not a document that, once created, you should just leave gathering dust. Whenever you go through a major life event, such as getting married, welcoming a new child or going through a divorce, you should update your will to reflect the new situation. You can do it by adding an amendment, known as a codicil, or create an entirely new will.

Tip 2: Update your medical directives. Along with your will,  you should also update any medical directive you’ve made.  For example,if  you’ve named a health care proxy or durable power of attorney, make sure the person you’ve selected is still the person you want. If you decide to select someone new, make sure you create a new document that meets all state requirements.

Tip 3: Review your retirement accounts and any other instruments that allow you to choose your own beneficiary. It’s fairly common for people to set up retirement accounts, 401(k) accounts or insurance accounts that name a beneficiary and then quickly forget about who that beneficiary is. If it’s been a few years since you looked over your beneficiary designations, take some time to review and update if necessary.