Whenever you decide to create an estate plan, it is important to consider several factors, whether you decide to use a Living Trust or a Last Will and Testament as your primary method of transferring assets at your death. Part of that process includes understanding the purpose of some of the other important documents which should be included in your estate planning portfolio. Those documents are:
• LIVING WILL: This document tells your health care providers that, if you are terminally ill or incurably injured and likely to die within a
short period of time, not to take any special measures to keep you alive (such as using ventilators and other life sustaining equipment).
• HEALTH CARE REPRESENTATIVE APPOINTMENT: This document gives the
named individual the power to make health care decisions for you if you are unable to
communicate with health care providers. This differs from the Living Will, because it does not require that you be diagnosed as terminally ill before decisions can be made for you about health care matters. The document covers all medical matters including the power to stop health care where appropriate.
• DURABLE POWER OF ATTORNEY: This instrument is sometimes referred to as a
financial power of attorney in order to distinguish it from the health care document. This power only is used, if you are determined by a physician to be incapacitated, or you decide, in writing, to make it effective immediately. Prior to that time, you are in charge of your own day-to-day affairs. When such a power is "activated", the person who is named, has full authority to handle all of your day-to-day needs. The power is also restricted, in that the person named cannot change the terms or intention of the estate plan which has already been put in place.
• “POUR-OVER” LAST WILL AND TESTAMENT (used only with a Trust Portfolio). In the event that assets are held in your sole name at the time of your death, this Will's sole function is to place those assets in the trust so they can be distributed according to the terms of the trust. In addition, Indiana, Michigan, and Illinois have statutes which allow a certain value of assets, in a person’s sole name (for example, $50,000 in Indiana), to avoid the need to probate the Will. Of course, if there are no assets outside of the trust, the document will never be used. It is always wise, however, to have such a document in place to avoid any future potential problems with your estate plan.
Have questions or want to make an appointment? Call the law office of Michael V. Riley at 219 879-4925 to set up a no-cost, no-obligation consultation regarding creating an estate plan for yourself in person, by phone, or video.