Wills
A last will and testament is a document you create to instruct how you want your property distributed upon your death. Who gets the house? Who gets which antiques? Who gets a bank account? Who takes care of the pets? These are just some of the questions upon which a will answers and instructs, and just some of the information we will obtain to draft a solid last will and testament that can stand up in probate and prevent challenges to its validity.
What is the Purpose of a Will?
The person creating a Will is known as a testator. The testator devises property and assets to named beneficiaries in a Will. This gives testators far more control over assets – both while they are alive and after they pass away.
As such, the Will serves four general but important purposes:
- They allow property owners to control what happens to their belongings, even after they die.
- They incentivize productivity by allowing people to control what happens to their property after death.
- They protect the decedent's heirs, including minor children by appointing a guardian.
- They allow you to appoint who you want to oversee the estate.
In order for the Will to work as intended, it must adhere to proper procedures in accordance with state law.
General Requirements of a Will
Each state's requirements of a Will and what makes it valid may differ somewhat, but all states have four requirements that are true no matter what.
- The testator must have testamentary intent, meaning the testator subjectively intended to create the Will.
- The testator must have testamentary capacity, meaning that they understood they were creating the Will at the time of its execution.
- The Will must have been executed without the interference of fraud, duress, undue influence, or mistake.
- The Will must have been duly executed through a proper ceremony––for example, signing the Will and having witnesses per your state's law were completed properly.
Intestacy: The "Default" Method if You Die Without a Will
If someone dies without a Will, this is known as dying "intestate." Should a person die intestate, the state will step in and distribute any property. There are two key reasons to create a Will, rather than relying on intestacy laws to devise your property, and the reasons relate to family and probate matters.
Family
Intestacy laws aim to pass property in a way that most people would want it to pass, which basically means any property is passed to immediate family members first, like children, then parents, siblings, grandparents, and so on. Intestacy laws only benefit you if you are happy about your hard-earned property going to your immediate family member.
The problem here is that if you have stopped a relationship with a family member, that may not be taken into consideration when the State steps in to disburse your assets. This could result in property, (or even the custody of a minor child) passing to a relative whom you would not wish to be a beneficiary and/or guardian.
Probate
Property governed by intestacy law must pass through probate court, first, which can be expensive and time-consuming, leaving fewer benefits and more burdens for your loved ones. That said, a valid Will also goes through probate to implement its provisions. The only difference is a well-crafted last will and testament will go through probate rather quickly and without incident because it's harder for someone to challenge it.
Further, there are other ways to distribute property according to your wishes while also avoiding probate completely. Speaking with an estate planning lawyer will help you determine what will work best in your specific situation and with your specific assets.
The Risks of “Do-It-Yourself” Wills
The expense and lack of control that comes from dying intestate, coupled with the perceived costs of hiring a lawyer to write a will, has led to a huge increase in the use of “do-it-yourself” wills. These forms, often found online for a fee, claim to be just as good as a traditional will prepared by an experienced attorney.
These "one size fits all" documents, however, are not tailored to your unique circumstances. The process to create a DIY will is often accompanied by mistakes that open the door for challenges to the validity of a Will upon your death. In fact, a court may dismiss the Will completely.
If you decide to try a DIY Will first, keep the following five tips in mind:
- Define who your family members are. For example, if you brought children into a second marriage, make sure who constitutes “family” in your Will.
- Assign and direct the executor to pay debts and expenses, including anything from credit cards to personal loans to funeral expenses.
- Make specific bequests or gifts so that there is no confusion about who gets what.
- Provide a catch-all clause for assets that you do not specifically give away.
- Finally, be specific about people and property as much as you can. Wherever there is any ambiguity there is also room for a challenge.
That said, in the least, it is a good idea to have an attorney review your last will and testament to make sure it's in compliance with state and federal laws.
Powers of Attorney
A power of attorney (POA) is an estate planning tool where you appoint a person, known as the agent, to manage your affairs. Typically, the POA is appointed to manage financial or medical matters when you cannot do so yourself because you are incapacitated by illness or injury.
What Constitutes a Power of Attorney?
A power of attorney is the legal authorization for one person, the agent, to act on behalf of another person, the principal. Often called a letter of attorney or just a "POA", they are a common element of estate planning as they let a person who is losing their ability to manage their own affairs choose someone they trust to make decisions for them.
There are six types of POA, described below.
- Durable POA
A durable POA takes effect immediately upon your signature unless the POA states otherwise and allows your agent to continue acting on your behalf even when you are incapacitated. A durable POA terminates only when you die or when a revocation of POA form is issued.
- Non-durable POA
A non-durable POA takes effect immediately upon your signature unless the POA states otherwise. It does not allow your agent to continue acting on your behalf when you become incapacitated. In the latter scenario, only a court-appointed guardian or conservator can make decisions on your behalf.
3. Medical POA
A medical POA is sometimes referred to as an advance directive because it allows you to appoint a health care agent to make medical decisions for you when you cannot do so. It is limited by your specific medical preferences and any other directive you may have as part of your estate plan, like a living will or a Do Not Resuscitate (DNR) form.
- General POA
A general POA allocates broad powers to the agent to act on financial, business, real estate, and legal matters. This POA is limited only by the terms set out in the POA or by any relevant state statute.
- Limited (Special) POA
A limited (Special) POA allows the agent to act for a specific purpose and once that purpose is accomplished, the POA expires.
- Springing POA
A springing POA takes effect if/when a certain event or medical condition occurs as specified in the POA. It ends at a specified time as outlined in the POA or if/when you become incapacitated or die.
When is a Power of Attorney Necessary?
A power of attorney is a useful tool for people who are planning their estate but who are losing the ability to understand the repercussions of their decisions and actions. By giving an agent the power to make those decisions, a principal can rest assured that someone is taking care of them.
A POA is common in the following situations:
- The principal is suffering from a worsening medical condition that impacts their mental capacity, like Alzheimer's or dementia
- The principal is physically disabled and cannot sign important documents
- The principal wants to give someone else the power to make specific decisions on their behalf
There are, of course, other reasons why you may need or want a power of attorney created. Speaking to an estate planning attorney in State is the best way for you to identify and determine what will work best for you.
How is a Letter of Attorney Created?
Each state has its own requirements for creating a letter of attorney, though most are based on the parties and witnesses signing a power of attorney form. Because having the power to make financial and medical decisions for someone else is such a serious matter, each state incorporates formalities that must be followed to:
- Ensure the power of attorney is legitimate; and
- Confirm the person relinquishing their rights is doing it knowingly and voluntarily.
Many states require a witness along with notarization. Contact us to find out exactly what the process is so that you don't make mistakes that could prompt delays or problems.
Healthcare Proxy
A healthcare proxy, also written as health care proxy, is a means to ensure that––in the event you become incapacitated––someone you trust carries out your wishes regarding medical treatment. This document is a great comforting tool that you can use, knowing someone you trust will make the right medical decisions on your behalf.
What Constitutes a Healthcare Proxy?
A healthcare proxy is a legal document that allows you to appoint a person of your choosing to act as your healthcare agent and make healthcare decisions for you in the event you become incapacitated. Many people choose their partner or spouse, adult child, or sibling to act as their healthcare proxy. Whoever you choose, make sure it is someone that is able to make important decisions swiftly in emergency situations.
A healthcare proxy is only effective when you are no longer able to make decisions for yourself, and this has been verified by a physician. You always have the ability to change or revoke your healthcare proxy as long as you are competent.
Other names for a healthcare proxy, depending on the jurisdiction you reside in, include health care surrogate and medical power of attorney (POA).
How Does a Healthcare Proxy Differ from a Living Will?
A Living Will is a document that allows you to specify what your wishes are regarding end-of-life care and life-prolonging procedures. It is not addressed to anyone in particular but makes your medical care wishes clear to your family, friends, and medical personnel. This differs from a healthcare proxy in that the proxy is actually appointing a person to make your healthcare decisions on your behalf. A healthcare proxy is extremely helpful as it allows the person you appoint to make decisions for situations that were not anticipated and addressed beforehand (like in a Living Will).
There is a document known as an Advance Directive that is available in some jurisdictions that combines properties of the Living Will and the healthcare proxy.
Why Have a Healthcare Proxy?
Having an appointed healthcare proxy can not only bring peace of mind in knowing you have someone looking out for your interests even when you are unable to do so, it can also prevent strife and unnecessary delay in care. For example, family members often disagree on what type of medical care a loved one should receive, and valuable time is spent arguing. By appointing a specific person to make your healthcare decisions, you are able to avoid this.
Without a healthcare proxy, medical establishments will look to state law to determine who can make medical decisions on your behalf. With that said, you especially want a healthcare proxy when any of the following situations are present:
- You have been diagnosed with a serious or terminal illness
- You have reached an age where illnesses are more prevalent
- You are in the process of drafting or updating a Will or other advance directive documents
But again, it's important to stress that you do not (and should not) wait until the last minute to create a healthcare proxy because we never know with certainty when something might happen, like a serious car accident.