Estate planning for your peace of mind

  • Mail this page!
  • Delicious
  • 0

By Lauren Epstein

People can be very good at finding excuses to avoid updating their estate plan. Perhaps it is the thought of meeting with an attorney (and the potential expense). Or maybe it is finding the time to actually consider the decidedly depressing subjects of death and incapacity. Or it could be that you think you don’t need a will. However, a well-drafted estate plan, which generally includes a will, financial power of attorney and health care directive, gives you control over who will help you make decisions if you become incapacitated and who will inherit your assets after your death.

Last will and testament

A will directs the distribution of your probate assets after your death (assets that have a joint owner or that name a beneficiary will pass to the other joint owner or beneficiary automatically upon death). There is no right or wrong way to dispose of your assets. Although children, in certain circumstances, and spouses have special protection under Maine inheritance law, you can generally otherwise leave assets to anyone you choose, including other family members, charities, or dear friends. Without a will, your assets will be distributed in accordance with Maine law. This may or may not reflect what you want.

A will also permits you to name a personal representative. The personal representative is responsible for collecting your assets and distributing them in accordance with the will. If you do not have a will, Maine law provides a list of people who have priority to be appointed as personal representative, but this does not necessarily take into account who would actually be the best person to serve in this role.

Additionally, a will can also allow you to plan for an incapacitated spouse. For a spouse living in a long-term care facility and receiving public benefits, inheriting assets from the “community” spouse could make him ineligible for those benefits. Instead, the community spouse can include a special type of trust in her will, called a supplemental-needs trust, for her spouse’s benefit. The trust assets can be used to pay for those items and services that are not otherwise covered by public benefits. At the same time, the spouse in the facility can remain eligible for public assistance. A qualified elder-law attorney can determine whether a supplemental needs trust will work for your particular situation.­

For most people, a simple will should be sufficient to distribute assets after death; however, if your total net worth is more than the applicable Maine estate tax exemption amount (currently $1,000,000) or federal estate-taxes exemption amount (currently $5,000,000) you may benefit from including tax-planning provisions in your estate plan.

Durable power of attorney

In a durable financial power of attorney (POA), you name an agent to help you make financial decisions. The POA can take effect immediately (meaning that both you and your agent can act on your behalf) or take effect only when you become incapacitated.

A general POA, with no limitations, is a powerful document. Your agent could do anything for you financially that you can do for yourself. For example, your agent could write checks; open and close bank accounts; or sell real estate. Also, depending on how the document is drafted, your agent may also be permitted to make gifts of your assets. Although your agent has a legal duty to serve in your best interest, there is always a risk that he or she could abuse these broad powers. It is critical that you have absolute trust in your agent.

Although there are forms available online, not all of these forms contain certain provisions required by Maine law. An attorney can make sure that the document is properly drafted and will explain the powers you are granting so you fully understand how the POA will work.

Health care advance directive

Many doctors’ offices and hospitals offer a health-care advance-directive form prepared by the Maine Hospital Association. This comprehensive form contains both a health-care power of attorney, in which you name an agent to help you make health care decisions if you become incapacitated, as well as a living will, in which you can express your wishes about being kept alive by artificial means. The form also contains instructions regarding burial arrangements and organ donation.

By expressing your wishes regarding end-of-life choices, you can relieve your family of the anxiety that often arises when faced with making these difficult decisions for a loved one in a medical crisis.

It is important to remember that estate planning documents live with you and should be reviewed every few years to ensure that they still reflect your wishes. Taking the time to review and update your estate planning documents is invaluable in providing both yourself and your loved ones with peace of mind for the future.

Lauren Epstein is a member of Bernstein Shur’s Tax, Trusts & Estates Practice Group, where she focuses her practice on estate planning and elder law.  She can be contacted at lepstein@bernsteinshur.com.

0