What is Estate Planning?
Estate planning is making decisions now to control what will happen to you in the future. In addition to wills, this planning covers actions that will happen during your life such as healthcare treatment. The focus in estate planning is to remove uncertainty so that other people know what your answers are to important questions. These questions cover how you want your property and yourself to be treated by others. In the event that you are unable to make decisions, who will take care of your financial or healthcare needs? If you are not around who will make decisions regarding the care of your children or pets? The future is uncertain but you can take steps through estate planning to reduce that uncertainty.
Some common terms in estate planning are wills, trusts, living will, durable power of attorney, and healthcare surrogate. Some brief explanations follow:
Living Will – A living will is not really a will, but a document that expresses what medical treatment you want or do not want while you are alive. Some people call a living will an Advance Health Care Directive. The Terri Schiavo case shows what happens when a person does not have a living will and a conflict arises between family members regarding what is best for an incapacitated individual. For those that don’t remember, Terri Schiavo collapsed on February 25, 1990 and remained under medical care without the ability to communicate until her death on March 31, 2005. There was a dispute between Terri Schiavo’s husband and her parents regarding whether or not to remove her feeding tube. Because of the lack of a living will, after fourteen appeals the court system entered an order to remove her feeding tube. Whether the decision to remove the feeding tube was correct or incorrect, without a living will nobody knew with certainty what Terri Schiavo wanted for herself.
Healthcare Surrogate – A healthcare surrogate is a person designated by you as someone who has authority to make medical decisions in the event that you are unable. You decide how much discretion to grant to the healthcare surrogate and the healthcare surrogate follows your preferences. This power only comes into play when you are not able to tell the doctors your preference and they need a decision regarding your healthcare. In the Terri Schiavo case both the husband and her parents were attempting to assert themselves into the role of healthcare surrogate with conflicting beliefs as to Terri Schiavo’s desires. Designating someone ahead of time removes this potential conflict between family members.
Durable Power of Attorney – A durable power of attorney can be a designation that appoints someone else to make financial decisions in your place. This person could be the same or a different person from the person appointed as your healthcare surrogate. A durable power of attorney remains in effect even after the grantor becomes incapacitated but it ends when the grantor dies. With the high number of people that ultimately suffer from some form of dementia, designating someone prior to the onset of dementia can help facilitate a smooth and continuous transition. Please note that the durable power of attorney statute in Florida was modified in 2011 and there are still forms floating around that do not comply with the new law.
Trusts – A trust is a legal relationship where one holds property for the benefit of another. A trust can benefit another entity, multiple people and even pets. When Leona Helmsely died in 2007 she left $12 million to her dog, a white Maltese named Trouble. While a Court reduced this amount to $2 million, the dog enjoyed a pampered life until its own death in 2010. While people generally do not have millions to spend on a pet, providing a lesser amount to benefit you, a spouse, children or pets is something to consider in estate planning.
Wills – A will establishes what happens to your property after your death. If you die without a will, commonly called dying intestate, then your property is divided according to state law. If there is something specific that you want to devise to someone then a will can address that desire.
Take time to talk to your family or friends about your goals and desires for your future. In conjunction with these talks, speak with an attorney about putting this into effect.
Mark H. Jamieson is an attorney with MHJ Law, PLLC, www.MHJLaw.com. This article is for educational purposes only and is not legal advice. Please talk with an attorney about your specific situation.