Let’s be honest, who wants to take the time to plan for death? It’s a downer. No wonder most of us wait and wait and wait until one day, we are forced to make decisions quickly never knowing if we are signing the right forms or if we’re considering our loved one’s wishes. Death is an uncomfortable subject that most prefer not to explore, but it is an unfortunate fact of life, and eventually, requires some planning.
According to the Social Security Administration each day 10,000 people from the baby boomer generation become eligible for Social Security benefits. So ready or not, many of you reading this article need to start thinking about your own or your parent’s wishes
when it comes to how they would like to be taken care of in the case that they become too ill to manage living alone.
One’s legacy is generally thought of in terms of money. Whether it be land, stocks, life insurance or personal belongings, an estate boils down to financial worth, and it is easy to become overwhelmed with the complexity of that aspect alone.
But what about the rest? Most tend to neglect the other aspects of what is left or not left when our life ends. Death leaves a huge void and often many unanswered questions that can haunt the living, yet it is these aspects that most often go ignored during estate planning.
Principal Attorney with Elder Law of Middle Tennessee J. Barry is an expert in the field of estate planning and says there are several ways that one can plan for the inevitable, but the first thing you must do is start the process. “People should start thinking about planning their estate before they are 45 years old.” Barry continues, “Unfortunately, a great many do not begin to think about it until they are 60 years or older. A lot of times, we don’t want to think about it. Denial isn’t just a river in Egypt, after all.”
Estate planning isn’t just a souped-up term for having a will prepared. Estate planning involves a series of documents specifically written to make sure your loved one (or you!) is taken care of in the event of a major illness or death.
Barry says to make things manageable; there are several documents you should know about and know how they work.
• In estate planning, a Power of Attorney is a legal document that authorizes another person to act on behalf of the person who created the power of attorney if the principal cannot make decisions his or herself.
1. General Power of Attorney- gives broad authorizations to the agent. The agent may be able to make medical decisions, legal choices, or financial or business decisions.
2. Healthcare Power of Attorney- is a document in which you designate someone to be your representative, or agent, in the event you are unable to make or communicate decisions about all aspects of your healthcare. It’s important to note the differences in a medical and general POA. Barry explains, “Some people are better equipped to deal with numbers, and others are better equipped to be a medical advocate. In the most basic form, a health care power of attorney merely says, ‘I want this person to make decisions about my healthcare if I am unable to do so.’”
• Having a Power of Attorney doesn’t mean you’re finished. “A Power of Attorney doesn’t give the person you put in charge capability to create a trust without specific instructions. That’s one of the things we need especially when we are dealing with Tenn Care.” Barry adds, “We might need to create a special government trust where we can move some of the assets and start Tenn Care a little early. This gives them the capability to preserve some of their money and stretch it out and use it alongside government benefits instead of waiting until they only have $2,000 in the bank.”
• A Trust is another document that is becoming more important for estate planning because of the increased need for long-term care planning.
1. Revocable trusts are created during your lifetime and can be altered, changed, modified or revoked entirely. Although useful to avoid probate, a revocable trust is not an asset protection technique as assets transferred to the trust during your lifetime may remain available to creditors.
2. Irrevocable Trust is one which cannot be altered, changed, modified or revoked by the trustmaker of the trust. Normally, once a property is transferred to an irrevocable trust, the trustmaker, cannot take the property out of the trust. This type of trust is often used to protect assets for someone who has a disability.
3. Testamentary Trust-part of will or another trust that will go into effect when you pass away.
• A Will is a document many of us already have. If you don’t, Barry says you need to add it to the TOP of your to-do list. “If you don’t make out a will, the state will determine where your assets go.” Just like a Power of Attorney, there are several types of Wills.
1. Simple Wills-A simple will distributes property from the estate of a testator whose finances and desires for distribution are uncomplicated. A simple will should include the testator’s name, address and marital status; statements indicating which assets are to go to which beneficiaries; a section appointing an executor for the estate and a guardian for the testator’s minor children if the other parent is dead; and places for the testator and two or three witnesses (depending on which state you live in) to print and sign their names. There are very specific procedures for executing a will in Tennessee as well as an affidavit for the witnesses.
2. Testamentary Trust Wills (see: Testimentary Trust Will above)-A testamentary trust will is a will that puts at least some of your distributions into a trust. A trust distributes your assets to a beneficiary but is normally administered by a third person who controls when and how the property is distributed to the trust beneficiary. You might establish a spendthrift trust, for example, for the benefit of a financially irresponsible beneficiary. The trust administrator may distribute the trust assets gradually instead of presenting them to the beneficiary in a lump sum. Although the estate executor and the trust administrator may be the same person, they do not have to be. The format of a testamentary trust will be similar to that of a simple will.
3. Living Will- Unlike other types of wills, a living will does not distribute property after the death of the testator. Instead, it gives instructions on what type of medical treatment you wish to receive if you become too ill to communicate. For example, you might state that if you become terminally ill and unconscious, you don’t want to be hooked up to a feeding tube even if you would die without it. The formal requirements for a living will are more flexible than for a testamentary will, but in Tennessee, it should be notarized or witnessed in front of two people with specific rules as to who may witness the living will.
• These are straightforward things that can be done starting today. It’s as simple as making a call to the experts at Elder Law of Middle Tennessee. It will give you peace of mind when considering the inevitable and will provide your loved ones with answers and eliminate doubt if something should happen to you suddenly, and you are unable to express the things you need to. While you can never be replaced, money can be a lifesaver for your grieving family left behind.
TO SET UP AN APPOINTMENT ESTATE PLANNING CONSULTATION Call 615-444-3568 Elder Law of Middle Tennessee 115 N Castle Heights Ave #101 Lebanon, TN 37087 www.elderlawofmiddletennessee.com
“This is not a substitute for legal counsel. It is very important that you work with an attorney with your specific situation and so that the attorney can ask you the right questions about your matter. The law changes from state to state and a slight fact pattern change will produce very different legal advice.”
