By: Charles C. Bratton, II, Esq., LL.M., founder of Bratton Law, LLC and practices life care planning, elder law, estate planning and administration, tax planning and disability planning
When considering home care Monmouth for a loved one, one of the questions you will get from the company is if you have your planning documents in place. No one likes to think about these things, but they are essential to ensuring that your wishes—both health care and financial—are carried out how you want while you are still living and after you pass.
What is estate planning?
Estate planning includes designing a plan which provides for the disposition of assets upon your death. The issues to be addressed are: who will receive your assets and when, who will handle the distribution of the assets and how this can all be accomplished at the least possible cost, and with the minimum amount of taxation. A comprehensive estate plan will also provide for the administration and protection of assets during your lifetime and will provide for decision-making in the event of your incapacity.
Download this easy guide: Bratton Law Estate Planning Definitions
What is a Will?
A Will is a legal document that becomes effective only upon the death of the person who created the Will. The Will sets forth who will be the beneficiary and what share of the estate they will receive.
When drafting a Will, you will be asked to choose an individual, called an executor or executrix (if female), who will carry out your wishes as dictated in your Will. This is not the same as a Power of Attorney. The Power of Attorney is only in effect while you are living, once you pass the executor takes over. They can be the same person or different people, but they must be designated with the proper legal documentation.
Trusts may be established within the Will. It is very important to follow all legal requirements of the state in which it is executed when setting up and signing the Will.
While Wills are valuable tools for any individual, they are especially beneficial when it comes to, protecting your children, safeguarding those with special needs and guaranteeing the continuance of your non-profit distributions.
What is a trust?
A trust is basically an agreement between you (the grantor or trustor) and a trustee (which can be either an individual or an entity) that is made during your lifetime. The trust agreement determines how assets placed in the trust will be managed and distributed. There are a variety of reasons that people establish trusts such as asset management, asset protection or to minimize the death taxes.
A common trust is a Revocable Living Trust which is a “will substitute.” It appoints another person, a trustee, to manage the assets set aside in the trust. Trustees can be an individual or an organization. A revocable trust will not protect assets from a nursing home or other long-term care needs. It contains provisions regarding asset management and disposition of assets upon death. Another type of trust is a testamentary trust which is a trust that is funded only upon an individual’s death. You may have read about life insurance trusts as well. This is a technique used to provide estate tax savings. A special needs trust is a Trust that is designed to provide funds to the beneficiary in such a way that the individual remains eligible for public assistance programs. There are many different types of trusts for different purposes depending upon your need and goals.
What is the difference between a Revocable and Irrevocable Trust?
A revocable trust is a trust that can be modified, altered, or canceled by the grantor. The grantor holds certain powers that cause inclusion of the trust in the estate of the individual. An irrevocable trust is a trust where the grantor relinquishes control of the trust and allows the trustee to control the trust assets. This type of trust, depending on how it is structured, may cause the assets of the grantor to be excluded for estate purposes.
What is a General Durable Power of Attorney?
A General Durable Power of Attorney is a written document whereby you authorize someone to act on your behalf as it relates to finances and/or other decisions. A General Power of Attorney allows the individual to make financial decisions on your behalf within the parameters of the powers enumerated in the Power of Attorney. A Durable Power of Attorney remains effective after the onset of a disability.
What are Advance Directives?
Any written instructions, recognized by the laws of the state in which you live (usually a Living Will or Health Care Power of Attorney) which appoints an individual to make medical decisions on your behalf. The document may also describe the types of health care the individual wants or does not want if he or she is not able to make health care decisions.
A Living Will explains your wishes about when you want medical care to extend your life, and what type of care you want. This document goes into effect only if you become seriously ill, suffer severe injuries, or are otherwise incapacitated.
It differs from another medical document called Practitioner’s Order for Life-Sustaining Treatment, or a POLST form. The POLST form is designed to be completed jointly by an individual and a physician or advanced practice nurse, expressing the individual’s goals of care and medical preferences. A completed POLST form is an actual medical order that becomes a part of the individual’s medical record. It also is valid in all healthcare settings.
What is a HIPAA Document?
The Health Insurance Portability and Accountability Act (HIPAA) was designed to provide privacy standards to protect patients’ medical records and other health information provided by health plans, doctors, hospitals and other health care providers.
The HIPAA (Health Insurance Portability and Accountability Act) Privacy Rule regulates the use and disclosure of Protected Health Information (PHI) held by “covered entities” (generally, health care clearinghouses, employer-sponsored health plans, health insurers, and medical service providers that engage in certain transactions.). This document Will allow those you authorize to be able to speak to your physicians and other health care professionals about your health care issues.
Download this easy guide: Bratton Law Estate Planning Definitions
To learn more about estate planning for your family and ensure that your wishes are carried out, call 856-857-6007 to make an appointment with the skilled lawyers at Bratton Law Group.
