Frequently Asked Estate Planning Legal Questions
What Is Probate?
Probate is a legal process allowing the court to supervise the process of handling the affairs of someone who has died. It can be formal or informal. The probate process varies in each state, and the details and procedures vary by judicial district within the state. Probate is designed to ensure that bills are paid and assets are delivered to the appropriate beneficiary or heir. For more about probate, go to Probate Facts.
What Are All These Documents?
MEDICAL POWER OF ATTORNEY
The Medical Power of Attorney or Health Care Power of attorney appoints another adult to act for you and make medical decisions if, and only if, you are unable to communicate. It lists the powers that you give to that other person, such and hiring and firing doctors, and giving or withholding medical treatment. If you are later able to communicate, then you again resume the decision-making power. Naming a health care agent allows you to choose who will make decisions for you and prohibits others from taking over.
Usually combined with the Medical Power of Attorney, this document is used as a guide for your doctors and health care agent (appointed in the Medical Power of Attorney), for the types of treatment you want in certain circumstances. For instance, if you are in a condition which prohibits you from communicating and your doctors and agent do not believe you will recover, this document states whether or not you want continued treatment
MENTAL HEALTH CARE POWER OF ATTORNEY
This document is very similar to a Medical Power of Attorney, but is effective only regarding mental health issues. It allows someone to participate in making mental health care decisions for you without having to go to court to get a mental health guardianship.
INFORMATION RELEASE UNDER HIPAA
The Health Insurance Portability and Accountability Act (HIPAA) greatly restricted the ability for anyone to get medical information about you. The release allows your agent (the person you have named to make medical decisions for you) to get medical information about you in order to make appropriate decisions. It also allows the agent to transmit information about you from one health care entity to another (such as from your doctor to your insurance company), and to send appropriate information to a governmental entity to apply for governmental benefits, such as social security disability
DURABLE GENERAL POWER OF ATTORNEY
This document deals only with financial matters. The durable general power of attorney allows the person you have named, (your agent), to step in and deal with your financial affairs in the event that you are unable to handle things yourself. Thus, if you are hospitalized, and unable to function normally, your agent will be able to cash your paycheck, pay the mortgage, etc. without any further effort on your part. This document is usually structured so that you need not have a disability in order for the agent to act. If you are suddenly called out of town on an extended business trip or family emergency, for example, the person you have appointed will be able to keep financial matters up to date while you are gone. It may be specifically drafted to include permission for your agent to use your money for purposes other than just for yourself, such as supporting your children and/or your partner or spouse. This power is “durable” because it functions even after you become disabled, but it can be revoked by you at any time.
A will states your wishes in the event of your death. It states who is to receive what items of your property. It also appoints another adult of your choice to act as Personal Representative (executor), to carry out your wishes, and probate your estate, if necessary. It states your preference as to who should be guardian for your minor children, and how any money or property left to them is to be handled until they become adults (or the age you direct, such as 25). Finally, the will names the person you want to handle your body after you die, permission or refusal to donate organs, whether you want burial or cremation, and where you want your body buried, or your cremains distributed.
This functions similar to a will, but there are several differences. This document begins working in the present (hence the name “living”) and functions a little like a corporation that you own completely. All of your assets are put into the trust and all future assets should be put into the trust. You do not lose control, however. You continue to buy, sell, transfer items, etc. just as you have been doing, but as the trustee of the trust, instead of in your own name. The only difference is that upon your disability or death, another adult whom you have appointed, (the successor trustee or co-trustee), steps in and continues to deal with your property according to your instructions, which are detailed in the trust. Upon your death, your property passes as you have instructed, without having to go through probate, and because the trust doesn’t have to be filed with the court, it is not a public document and therefore you privacy is protected.
Beneficiary designations are used primarily on financial accounts, retirement accounts, insurance policies, etc. The named beneficiary is the person who is to receive the account or asset upon your death. It “trumps” any designation in a will or trust
A beneficiary deed allows you to retain title to your real property, but designate a beneficiary to receive the property upon your death. Often used as a means to avoid probate, Arizona was one of the first states to make provisions for beneficiaries on real property.
PAY ON DEATH OR TRANSFER ON DEATH ACCOUNTS
POD or TODs are another form of naming a beneficiary, usually used by banks. Handled through your financial institution, you may sign a new signature card or bank form designating who you want to have the contents of the account in the event of your death. POD and TOD (different institutions use different terms) accounts are used to easily transfer assets after death, and avoid the probate process.
MOTOR VEHICLE BENEFICIARY DESIGNATION
Like the other beneficiary designations, this allows a transfer of title to your vehicle to another without going through probate. Simply complete the form and attach it to your car title.
Partnership and Parenting Agreements
DOMESTIC PARTNER AGREEMENT
This highly customized document spells out the agreements between you and your partner. It delineates who owns what and how you deal with financial matters. Similar to a prenuptial agreement, this document primarily is between you and your partner. No one need know it’s contents, or even that it exists. It does function, however, to clarify your understandings and refresh memories, years after decisions were made. It also clarifies these matters to outsiders, in the event of death or disability. For instance, a relative may not come in suddenly, in the event of your disability, and evict your partner from your home. This document may be used in the case of a termination of the partnership to protect the interests of both parties and help ensure that the original agreements are followed. It may be modified or revised as your circumstances and agreements change.
A co-parenting agreement also is a very individualized document that helps to define the relationships in a non-marital family with children. It will state that even though one partner is the biological parent, it is the intent of both parties to co-parent the child. It states the rights and obligations of both parties in relation to the child, and particularly defines the rights and obligations in the event of the death or disability of the legal parent, or in the event of a dissolution of the partnership. While not binding on the courts, it is evidence of the original intent of the parents in terms of their relationships to the child or children.
DELEGATION OF PARENTAL AUTHORITY
This is a relatively simple form that grants guardianship-type powers to another person. It is only good for six months, and must therefore be redone every six months when one parent does not have a legal relationship to the child. It gives most parental rights to another without the legal parent giving up any rights. With this document, a non-legal parent has the right to grant medical treatment, pick up a child from school, sign permission slips, etc.
DONOR INSEMINATION AGREEMENT
This contract is between the known donor and the recipient of sperm for artificial insemination. It specifies the terms of the agreement between the parties regarding such areas as support payments, custody and visitation rights, disclosure of parentage, (whether it will be disclosed or not, when and to whom), and recognition of the recipient’s partner as a primary parent, if applicable. Although the courts are not absolutely bound by the terms of the agreement, it is strong evidence as to the parties’ original intent, and will be followed, except when the “best interests of the child” would be harmed by the terms of the agreement.