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The Big 5- Estate Plan.

What everyone needs.

Anyone over 18 years of age needs a will.  Even if a person has few assets, significant sums of money could be due that person’s Estate after death, such as life insurance proceeds (without a named beneficiary) or a settlement from a wrongful death claim.

If you die without a Will, the state where you lived at the time of your death will declare you intestate and write it for you.  Each state has its own laws of intestate succession.  “Intestate succession” is the means through which the law directs to whom your property will go in the event you die without a Will.  Dying without a Will does not help you to avoid probate and it usually makes probate much more complicated and expensive.

All of your real and personal property titled in your name alone must go through a process directing your property to someone else.  This is the process of “probating your Estate.”  After your death, a petition is filed with the Probate Court listing all of your property that does not pass “by operation of law.”  For example, if you have property jointly titled with someone else in such a way that it automatically passes to the other owner at your death passes “by operation of law.”  This property does not need to be probated.

In your Health Care Proxy you appoint an Agent to speak to your health care professionals in the event you are unable to communicate your instructions yourself.  Your Agent can be any adult person of sound mind.  Your Agent need not be a family member.  You want an Agent who will not be intimidated by physicians and whom you trust to follow your wishes.

Health Care Proxies in Massachusetts are often combined with a Living Will.  In your Living Will you direct your health care professionals to do or not to do certain medical procedures in the event you are unconscious and there is no reasonable chance you will survive.  Some people want many medical procedures to be taken and others choose none or few.  It is entirely up to you.

A Health Care Proxy is a critical document in the event you become incapacitated in any way and are unable to make or communicate your decisions about your medical care.  Your health care professional needs to know what you want, not what your family wants.  Also, it is often difficult for family members to reach an agreement among themselves if any decisions are necessary.

You want everyone to know that you have prepared this document; therefore, you want your key family members and each one of your physicians to have copies of your Health Care Proxy.  It is important that you talk to your family and your physician about your Health Care Proxy.

A Durable Power of Attorney means it survives your mental incapacity and can be used if you become mentally incompetent.

In your Durable Power of Attorney you appoint an Agent to handle your business affairs.  Specifically, you give your Agent permission to sign anything you would sign as a competent adult.  For example, your Agent shows your Power of Attorney to the bank representative.  Your Agent then signs their own name to your check or document.  Your Agent prints below the Agent’s signature, “As Attorney in Fact for (your name).”

You can sign a Durable Power of Attorney that is immediately effective or one that “springs” alive only in the event of your mental incapacity as determined by one or two physicians (you decide if you want one or two physician letters).  If you sign a springing Durable Power of Attorney, your Agent would show the bank your Power of Attorney and the one or two letters from physicians before signing the check or document.

You can give your Agent very broad powers stating that your Agent can essentially sign anything and everything on your behalf.  You must only give this kind of Power of Attorney to someone you absolutely trust.  If you give an Agent this power and later change your mind, you must immediately destroy the original document and all copies.  You must take all steps to be certain your former Agent is not taking your money or property without your permission.  This is why I recommend that you permit your attorney to keep original document in the attorney’s safe and keep only one copy for yourself.  Tell your Agent where to find this document if and when it must be used.

If you do not wish to give your Agent a broad Power of Attorney, you can give your Agent specific authority just to do certain things.  For example, you can direct that your Agent only sign checks from one specific bank account.  I generally recommend against using this kind of Power of Attorney because it usually defeats its primary purpose, to avoid a Guardianship proceeding.

In the event you become mentally incapacitated and you previously signed a Durable Power of Attorney, your Agent can immediately take over your affairs.  If you become mentally incompetent without this document, someone may eventually be forced to petition the Probate Court to have a person appointed to be your Conservator or Guardian, a time consuming and usually expensive process.

This is a complicated question to answer.  If you are married and the value of your combined assets (including the amount of life insurance your beneficiary will receive upon your death) is over a million dollars, a Trust is usually recommended.  You will usually prefer a Trust if you have significant monies you wish to pay out over a period of time to your beneficiary (the person to whom you wish to give your assets), such as a child or disabled individual.  A trust is very useful if you own real estate in a state other than the state of your residency.

People choose to execute Trusts for other reasons, such as privacy and flexibility.  You can have a Pour over Will and a Trust.  The Will simply “pours” all of your probate assets into your Trust.  Only your Will, not your Trust, is filed in Probate Court.  This technique can significantly simplify the probate of your assets.  Only the Will is public record, not your Trust.

Most everyone needs a Will, Durable Power of Attorney, Health Care Proxy and Living Will.  It is very important to execute these documents as soon as possible before it becomes too late.  Once a person becomes mentally incompetent, (i.e. is unable to understand what they are signing), it is too late. Once it is too late, petitioning the Probate Court may be the only choice left.


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