As a new year begins, our minds naturally turn to New Year’s resolutions. If prior experience is any indication, most New Year’s resolutions are forgotten by late February. However, there is one resolution that is worth keeping this year: getting or updating your estate plan. The mere thought of an “estate plan” can understandably be a source or anxiety or fear for many, but at its core, an estate plan consists of a necessary set of documents that expresses your final wishes and ensures your wishes are carried out accordingly. There are five essential documents to any estate plan: a Will, a Durable Power of Attorney, a Health Care Proxy, HIPAA Release, and Final Disposition Instructions.
- A Last Will and Testament, or “Will” for short, is a document that states your final wishes in terms of who you want to inherit your assets. This includes giving your beneficiaries anything you may own, from your home or property to your investments and jewelry, or even your beloved stamp collection. If you have minor children, you can also name guardians in your will. These are the people who you would want to care for your children if you should pass away before they turn 18. Without a guardianship nomination, your family may find themselves fighting in probate court over who will take responsibility for the minor child(ren), or worse, someone may become guardian who you did not want to become guardian.
If you die without a Will, it means you have died “intestate.” When this happens, the government will determine what becomes of your assets, often dividing them in ways you wouldn’t choose if you were able to. Working with an experienced attorney will ensure your ill is properly drafted and executed as part of your estate plan.
- A Durable Power of Attorney is a legal document that allows for a trusted friend or relative to make financial and business decisions for you (the “Principal”) should you become incapable of managing your own affairs. A Durable Power of Attorney goes into effect the moment it is signed. Your executed Power of Attorney allows the person you’ve appointed (the “Agent”) to handle important matters such as paying bills, managing investments, accessing online accounts (such as email and Facebook), and running a business, if you have one.
The Durable Power of Attorney described above is considered to be “non-springing.” It is important to know that there is a second type of Power of Attorney, which is known as a “Springing Power of Attorney.” This type of Power of Attorney “springs” into action only after a specific event occurs. Typically, the “event” occurs when two doctors agree that you are incapacitated and can no longer make decisions for yourself. However, the determination of incapacitation can be tricky. Sometimes doctors disagree; sometimes people have good days and bad days or particular parts of the day that are troublesome, such as the “sundowning” which sometimes occurs with people with Alzheimer’s.
If you decide to execute a Durable Power of Attorney, you can continue to manage your own affairs until such time as you are unable and you need your Agent to step in and take over. You can also have your Agent step in for you as needed, such as when you are perhaps traveling cross country and there are issues at home that need tending to.
- A Health Care Proxy allows you to name someone you trust to make important health and medical decisions for you should you become incapacitated and unable to make those decisions for yourself. This person is your “Health Care Agent.” Any individual over the age of 18 can be appointed as your health care agent; you can have more than one agent (e.g., your two children); and you can have alternate or successor agents as well. Your Health Care Agent will make decisions for you by taking into account your wishes as you’ve relayed them to him or her and their understanding of your religious and moral beliefs. Therefore, your Agent should know what treatments you would and would not wish to receive. This includes your views on various life-sustaining treatments. If you do not wish to receive life-sustaining treatments, such as having a machine breathe for you, for example, do you wish to still have hydration (water to drink or IV fluids)? It is not always easy to make these decisions but it is worth spending some time thinking about so that your Health Care Agent can follow your wishes to the best of their ability.
In conjunction with your Health Care Proxy, you can execute a Living Will. While technically not binding in Massachusetts, a Living Will functions as a health care directive, which describes the kind of medical care you wish to receive in the event you become incapacitated. It can serve to capture the discussions you’ve had with your Health Care Agent about your wishes and can be a great reference point and guide for your Agent during what can be a particularly stressful time.
- HIPAA Releases are also part of the core estate planning documents. Your signed HIPAA medical release form includes the names of all the people you would like to have access to your medical information. Having these forms in place is especially important in the event you become unexpectedly incapacitated in some way and need the immediate help of your family members and/or friends.
- The final core document is your Final Disposition Instructions. These instructions will indicate who you want to carry out your wishes as they relate to what is done with your remains, any funeral or burial arrangements you’ve made, any details you wish to include/exclude from your services, etc. It is expected that the person you’ve chosen will follow through on your instructions when the time comes to celebrate your life after you pass.
As you can see, these documents cover important details and wishes and together they create a guide for those closest to you for when you pass away. There may be other benefits that a proper estate plan affords you as well. For example, an estate plan can offer an opportunity for creativity. A will can include gifts to individuals or contributions to charities and institutions. Final Disposition Instructions can specify your favorite music or readings. Nominating your agents and personal representative(s) can be a time of reflection when deciding who in your life is best suited to make critical decisions. There is also peace of mind in knowing that your thoughts on various aspects of your life and death are specified in legally binding documents.
Although the documents are legally binding after they are signed, they can be changed. Divorce, marriage, death, and children’s births are key events for when an estate plan should be reviewed for any necessary changes. After all, do you want your ex-husband listed on any documents in your estate plan? You wouldn’t’ want to accidentally leave a child out of your Will either. However, these are not the only times an estate plan can be changed. An estate plan can be amended simply because you may change your mind about who you want to make important decisions or who you want to receive your assets. Finally, if an estate plan is older than five years, it may need to be updated to reflect changes in the law.
This may seem like an overwhelming New Year’s resolution, but it is not one that you need to carry out alone. We are committed to walking you through every part of the process and helping you craft or update a plan you will be glad to call your own.
Contact us at Hera Law Group and check this New Year’s resolution off your list.
By Phone: 978-637-2048 or email: office@heralawgroup.com
