The Goal

            The goal of a basic estate plan is to simplify any transfers of property, personal or real estate, to your desired heirs. This could include keeping assets out of the probate process, planning for a reduction in taxes, or simply giving your heirs or administrators an understanding of what you want done.

            The thought of planning for your demise can make some people uncomfortable. Making a plan does not mean that you are on death’s door; it is never too early to make a plan. The plan can change as your life changes. A sound estate plan can reassure your loved ones again that you had thought of them and will reduce their burdens, avoiding rash decisions.

Contents of an Estate Plan

            The first instruments in a good estate plan are to ensure your wishes are known while you are of sound mind. The durable power of attorney, the healthcare power of attorney, and the living will declaration helps loved ones to manage your affairs and your care. In many circumstances, when you need these instruments, it is already too late. Planning ahead is important.

Durable Power of Attorney

The durable power of attorney (POA) gives someone, or more than one person, the power to act in your place and stead while you are alive. The most expansive permissions give the power to do anything as if they are you, including planning your estate in many ways. It is in the principal’s (the person assigning the powers) discretion to remove any powers they do not wish the attorney-in-fact to wield when drafting the document. There are “springing” POAs and non-springing. A springing POA does not go into effect – the attorney-in-fact has no power – until you are incapacitated; it springs like a trap. The determination of incapacitation can be troublesome and delay the effectiveness of the POA. A non-springing POA is effective upon execution. The durable POA become ineffective at death or can be revoked at any time in writing and recorded with the county recorder.

The durable POA is durable because it survives incapacity. Having a POA in place can take the place of a guardianship through the probate court when the principal can no longer legally make decisions due to incapacity.

Healthcare Power of Attorney

            A durable power of attorney can grant powers over anything except healthcare decisions. A specific power of attorney for healthcare (HPOA) is required to assign the rights to medical decisions. Unlike a POA, an HPOA is only effective once the principal is incapacitated. If the principal achieves capacity again, for instance awakes from anesthesia, the HPOA is no longer effective.

Living Will Declaration

            A living will declaration goes hand-in-hand with an HPOA. A living will declaration makes your wishes for end-of-life care known to loved ones and medical providers. A living will declaration is not a DNR (do not resuscitate order); that would be a separate document. A living will deals with artificial hydration and nutrition only after two doctors have determined that you will likely not wake up again. A person exercising powers under an HPOA cannot alter the living will declaration.

Transfers or Payments on Death

            In many instances of titled property and financial accounts, a designee can be named to either transfer the title to or pay the contents of the account at death. Real estate, vehicles, and bank accounts can all have transfer on death designations. Very little action on the part of the designee is required to affect the transfer. Pay on death designations usually require no action beyond notification of death.

• Real Estate:
  • Many couples hold their property in survivorship, meaning the other party acquires the interest at one party’s demise. This is designated on the deed.
  • A Transfer on Death Designation Affidavit can be filed to name the party or parties the owner designates their interest to transfer to. A second affidavit transfers the interest at death.
• Vehicles:
  • Any vehicle with a title can name a transfer on death designee at the title department when acquiring title.
  • If a designee needs to be added later, a new title can be acquired with the updated designee.
• Financial Accounts:
  • Check with the bank or institution to verify a designee has been named.
  • The institutions will have forms or other ways to add or change these designations to accounts.

Last Will and Testament

            The will is what most people think of when they think of an estate plan. This document names the executor to handle any estate and then names the heirs. A will can list property separately and bequeath it to separate people or list everything together as the entire estate and name the heirs. Wills can be personalized to add most anything to them.

            Even if most or all of the estate has transfer on death designations, it is still good planning to also have a will as a “safety net” for anything overlooked or that may fall through the cracks.

When to Plan

            It is never too early to plan for your estate. Once a plan has been made, reviewing the plan every couple years ensures the plan stays up to date and useful.

            Contact J. Murphy’s Law to get started on your estate plan today. Our fees for many of these documents are flat fees and are comparable to online sites. Let us give you peace of mind and personal service.