Five Estate Planning Documents to Have When You’re Battling an Illness
Whether you’re young, old, healthy, or ill, estate planning should be a top priority. However, if you’re faced with a prostate cancer or have received some other unfavorable medical diagnosis, it’s especially critical that your legal affairs are in order and up to date.
Here are five key documents that you’ll need to include in your estate plan .
1. Healthcare Proxy
Most of us have at least one person in our lives who we can trust to act in our best interests. Who can you depend on to act in your best interest? A healthcare proxy allow s you to designate someone to be responsible for making decisions with your doctor. The person should not only be aware of your ethical and spiritual beliefs, but also capable of honoring your wishes in the event that you’re unable to articulate them.
2. Living Will (commonly referred to as “Advance Directive”)
You don’t have to look further than the landmark Terri Schiavo case to un derstand the benefits of a living will. When Schiavo suffered a heart attack in 1990, her family and husband were embroiled in a contentious legal battle about whether to keep her alive through a feeding tube after she fell into an irreversible vegetative state. A living will outlines your wishes and your position on issues such as life support, organ donation, feeding and hydration, and CPR.
3. Patient HIPPA Form
When you visited your doctor for the first time, you probably signed a Health Insurance Portability and Accountability Act (HIPAA) form. This document is based on a federal law that protects sensitive medical records, including clinical information and financial documents. Under the HIPAA Privacy Rule, you can also elect someone who will have authority to s peak with your health care providers, access your medical records , and exercise your HIPPA rights.
4. Financial Power of Attorney
In addition to determining who gets to make decisions regarding your care, you need to appoint a power of attorney agent. Each state has its own statutory form that will allow you to designate an agent and stipulate the rights that he or she will have to manage your financial affairs . This inclu des paying your bills, signing contracts, hiring an attorney, filing taxes, and making decision s related to your place of residence. The most common powers of attorney are springing power of attorney and durable power of attorney. A springing power of attorney privilege generally comes into effect when a person is incapacitated or battling a temporar y illness. A durable power of attorney is effective immediately.
It’s important to keep in mind that enforceability issues can occur with powers of attorney if they are not properly drafted and executed. A bank may refuse to accept a power of attorney , among other reasons, because the form does not comply with a change in the law or the agent’s name does not match up with their legal identification. A revocable trust might be a better option since a trust provides more details, are executed with more for malities, and provide advance notice to financial institutions about the assets owned by the trust as well as the authority of the successor trustee.
A will is fundamental in estate planning. If you die without a will, the courts will divide up your estate in accordance with state laws . As a result, assets may get distributed to persons that you have been vehemently opposed to. While the first step is c reating a will, it’s also paramount to update your will or your trust periodically. Because your circumstances may change over the course of your lifetime, your will or trust should reflect this. A variety of software programs claim that they allow laypeop le to successfully write a will on their own, but DIY wills come with serious risks. Many of these programs will in fact result in wills that are far inferior to those written by attorneys . They can also be problematic to probate.
A revocable trust can provide protection and easy access to you r finances during your lifetime. This is not an option in a will. When you create a revocable trust, you can act as the initial trustee or designate another person such as your spouse, child, or a bank to act as your co – trustee or successor trustee. You will have complete control over the assets owned by your trust as long as you are willing and capable of acting as trustee. Remember, the assets held by your trust can only be used for your be nefit during your lifetime. Upon your death , the trust terminates and acts as a will substitute. Your trustee will distribute your trust assets in accordance with your wishes. This process is handled privately without probate or the need for a judge’s approval.
Thinking about the potential curveballs that can arise when you’re struggling with an illness is not easy, but having an estate plan can make that process smoother. No matter where you are in your health journey, it’s never too early to plan for the future.
Linda Amato is a New York – based attorney and Malecare guest blogger whose private practice, Amato Law, PLLC, is exclusively devoted to providing estate planning . For additional information, visit www.amatoestateplanning.com