The Basics of Estate Planning and Advance Directives

If you want to have an effective estate plan together with advance directives, there are four essential documents you should have: a Will, a Health Care Proxy, a Living Will, and a Durable Power of Attorney. Having these four documents prepared by an experienced estate attorney, tailored to your  unique situation, lets you protect your health care decisions, provide your loved ones with access to your financial resources so they can be used for your benefit in the event you become unable to manage your affairs alone, and control the distribution of your assets on death. If your financial or family situation is complex, you may also benefit from the use of a trust, or trusts, however, most people are well served by the four documents summarized below.

  1. Health Care Proxy

A Health Care Proxy (HCP) is a simple straight forward document defined by state statute. It permits you to appoint a trusted individual to act as your health care agent only in the event you lose the ability to communicate what health care treatment you want. In order to be effective, you must sign the HCP in the presence of two witnesses who also must sign it. Only one person can act as your agent at any time, but you can provide for a secondary agent in the event your first choice cannot act. This is the document hospitals always require before they perform any procedures and it must be honored by doctors and the hospital where you are being treated.

  1. Living Will (Health Care Decisions Declaration)

A living will sets forth the circumstances under which you direct whether or not life-sustaining procedures be withheld, administered or withdrawn. By signing a Living Will, you express your treatment desires when you can no longer communicate effectively and thus remove the responsibility for making such decisions from your loved ones.

  1. Durable Power of Attorney

A Durable Power of Attorney (DPOA) is a document also created by state statute whereby you appoint an Agent who has broad or narrow powers to act on your behalf in connection with your finances. The broad powers granted by the DPOA allows your Agent to manage your daily affairs as soon as it is signed. The intent is usually that the DPOA is only to be used when you are unable to perform the necessary functions by yourself. You should be careful whom you appoint as your Agent and review the powers to decide if you want to limit them in any way.  In the event you become incapacitated and do not have a DOPA, your family will not be able to utilize your assets for your benefit, including paying for your living expenses and for any medical care you may need. In order to do these things, someone would have to petition the court to be appointed as your Guardian, an expensive and time-consuming proceeding.

  1. Will

A will is intended to specifically direct how your property, such as any jewelry, cash, securities, and real property, and all other property you own upon death. You can make outright bequests or you can set up trusts for any recipient of any part of your estate, which allows for greater control of your assets. For those with young children, a will also permits you to nominate the persons who will serve as their guardian. All wills also nominate someone to act as the executor, and as trustee if you have created any trusts. There are certain formalities specific to each state that must be followed in order for the will be valid and be able to go through the probate procedure in the Surrogate’s Court. In general, the will must be properly prepared, properly signed, and properly witnessed. This can all be accomplished by an experienced estate planning attorney.