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Estate Planning Primer

One of the first things you need to know about estate planning, is there are a minimum of four (4) documents which need to be included: a Will, a Durable Power of Attorney, a Designation of Health Care Surrogate, and a Living Will. Preparing these documents in advance can save you and your loved ones much grief and expense which can occur during times of great emotional stress. Estate planning impacts the control of both your assets and your physical well-being while you are alive but either not able or not competent to make these important decisions.

Will

A Will is a legal document that details who is to receive the various portions of your assets upon your death, who is to act as the Executor to carry out terms set forth in your Will. If you have minor children, it can create a testamentary trust and name a guardian to care for them.
There are a number of unfortunate consequences which can occur if you do not have a Will. Florida statutory laws will dictate who will receive your assets. Your spouse and children might end up with less than you desired, or people you did not want to inherit could end up inheriting your assets. Your minor children could be placed with a guardian selected by the Courts, instead of a guardian of your choice. If a testamentary trust is not created for your minor children, they could inherit money before they are ready to manage it properly.
It is important to know that a will does NOT cover property which you own as a joint tenant with right of survivorship, insurance policies or retirement plans in which you have named a beneficiary, accounts for which you have designated a “Payable on Death” beneficiary, or address your burial plans.

Durable Power of Attorney

A Durable Power of Attorney (a “POA”) is a document that allows you to designate another person (a “Representative”) to perform certain actions for you in case you should become ill, incapacitated or otherwise unable to manage your affairs. The Representative can be your spouse, an adult child or someone else that you trust, who will be able to pay bills, manage your assets, buy and sell securities or real estate, or make other financial decisions on your behalf. The POA can be as broad or as limited as you determine. A POA can be revoked at anytime; however, without a POA, your spouse or other loved ones may be required to to go through expensive court procedures to have a guardian appointed in order to carry out necessary financial transactions.

Designation of Health Care Surrogate

A Designation of Health Care Surrogate is a document, similar to a POA, that authorizes a designated person (the “Surrogate”) to make medical decisions on your behalf if you are unable to make decisions for yourself. Typically, the Surrogate is your spouse, an adult child, or another trusted individual that is designated to act on your behalf to carry out what you’ve specified in your Living Will (see below) or otherwise follow your previously discussed instructions on handling your medical care. Having a Surrogate that knows your wishes can greatly ease the burden and uncertainty otherwise placed on your spouse and other loved ones if no Surrogate has been designated.

Living Will

A Living Will is also known as an Advance Medical Directive, a Health Care Directive, or a Physician’s Directive (and you are probably asked every year by your doctor if you have one and requested to provide a copy for their records). Generally, the Living Will is a person’s written declaration of what life-sustaining medical treatments will be allowed or refused in the event a person should enter in a persistent vegetative state or develop a terminal condition. Many factors must be considered, including but not limited to: finances, health insurance, age, quality of life, the potential burden on loved ones, etc. A Living Will does not become effective unless you are incapacitated; until then you will be able to say what treatments you do or do not want. In most cases, a certification by your doctor and another doctor stating that you are either suffering from a terminal illness or permanently unconscious will be required before becoming effective.

Summary

Estate planning essentially is a way to organize your financial affairs so that when you are unable to manage them yourself, someone of your choice can step in and do it the way you prefer it to be done. It is strongly recommended that you have your estate planning documents drafted by a professional to ensure that they are prepared in accordance with state laws, and you and your loved ones do not end up with estate planning documents that will be contested and invalidated in the courts.

In addition, you should consider renting a safe deposit box at a bank. Into this box, you should put all of your important papers, including the originals of the foregoing documents. Those persons trying to take care of your business affairs will have one central place to go for all necessary documents. Of course, you should keep copies at home in a well known, but secure place, so that, absent immediate access to the safe deposit box, copies are readily available to your spouse, adult children, Executor, Representative, and Surrogate.

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