If you’re confused about estate planning and whether you need or have a will, a living will, a living trust, or a durable power of attorney, you’re not alone. If the names of the documents are confusing, the legalese typically used to explain them is worse.
There are four documents you should have and understand why you have them (or don’t have them) when it comes to estate planning. They all have different purposes, lifespans, and are distributed to varying individuals or facilities as needed.
A living will: does not have anything to do with your last will and testament.
Purpose: It expresses your wish (your will) that you don’t want to be kept alive by extraordinary means if your death is imminent.
Life span: Its enforcement and purpose dies when you do.
Distribute to: Primary care physician and assisted living facilities, hospitals, nursing homes, and those who you appoint as your health care surrogate so that they know in advance that you don’t wish to be kept alive with feeding tubes, respirators and other artificial means. Note: It differs from a “do not resuscitate order.”
A durable power of attorney:
Purpose: Gives broad authority to a person you appoint to act on your behalf in financial matters in the event that you become incapacitated. Gives access to bank accounts.
Lifespan: Effective upon the date you sign it but may spring up when you become incompetent or incapacitated). Its enforcement and purpose dies when you do.
Creation and modification: Anytime before your death or incapacity so long as you remain in sound mind.
Distribute to: Assisted living facilities, nursing homes, and those you appoint as your power of attorney or as alternate power of attorney.
Note: A power of attorney does not need to be a licensed attorney, it needs to be someone you trust.
Purpose: To instruct the court how you want your assets distributed. It does not avoid probate but often avoid family quarrels.
Effective: Upon your death, but not a moment before.
Creation and modification: Anytime so long as you are of sound mind.
Distribution: Your attorney normally keeps a copy of your will. You may file with the clerk of court in the county of your residence and you should provide to whoever you appoint as your personal representative (that person you choose to take care of your affairs and your assets and liabilities after your death.)
Note: It should be signed in front of a notary and two witnesses.
A living trust: is also known as a revocable trust.
Purpose: Outlines a distribution of your assets at the time of your death. It avoids probate (see note below).
Creation and modification. Anytime if you remain in sound mind.
Distribution: A trust is confidential. A copy should be given to the trustee.
Note: It never achieves its purpose if you don’t transfer assets into it. Federal tax laws reduced need for trusts in 2018.
If you have questions or would like a free family assessment to assure that your estate planning, real estate, long term care, and death directives are in place, call Attorney Linda Carley at 386-281-3340. Linda Carley has more than thirty years of legal experience, including serving as a probate judge.