The Wealth Advisor
Beyond Wills and Trusts: 3 Documents Everyone Needs
When it comes to estate planning, you probably think of wills and trusts. But there are three other estate planning documents you should think about to make your plan complete:
Planning for Medical Emergencies with an Advance Directive and Health Care POA
Having the right legal documents in place in case of a medical emergency is essential to providing a family member or trusted friend with guidance and decision-making authority during a difficult time.
An Advance Directive allows you to state your wishes about the type of medical treatment you do, or do not, want to receive if you become terminally ill or are in a permanent vegetative state.
A Health Care POA allows you to choose the trusted family member or friend who will be responsible for making healthcare decisions if, for any reason, you lose the ability to make them for yourself. To be the most effective, your Health Care POA should be accompanied by a HIPAA Authorization (Health Insurance Portability and Accountability Act) so your designated health care agents can obtain health care information that is necessary to make informed decisions on your behalf.
Lessons Learned From the Terri Schiavo Case
One of the well-known cases that highlights the need for a medical emergency plan is that of Terri Schiavo, a 26-year old Florida woman who collapsed and fell into a coma in February of 1990. Ms. Schiavo didn’t have a Living Will or Healthcare Directive, and as a result was kept alive for 15 years while her husband and parents fought in court over taking her off life support. Finally, in March 2005, a Florida court ordered removal of Ms. Schiavo’s feeding tube. She died 13 days later - and the autopsy proved that she had been brain dead since she collapsed 15 years earlier.
While the Schiavo case is an extreme one, it emphasizes the fact that without a medical emergency plan, your family members may be left to guess (or possibly fight) about your medical treatment and end-of-life wishes.
But, it doesn’t have to be that way. An Advance Directive and Health Care POA can make your wishes known and legally enforceable. If you have not reviewed your healthcare documents in the last year, now is the time to make sure they reflect your current wishes.
Planning for Property Management with a General POA
A General POA allows you to select a trusted family member or friend who will be responsible for managing your money and other property if you become mentally incompetent. Without this document, bank and investment accounts held in your name may become inaccessible, it will be more difficult to request IRA distributions, bills may not get paid, tax returns may not be filed, and property transactions may be restricted. A loved one may be forced into court to be appointed as the legal guardian, and a judge will oversee the guardian’s actions. A General POA can provide authority to handle these issues without court involvement.
Caution: A General POA Can Become Obsolete
A General POA can become “obsolete” within a few years, because many institutions do not want to rely on stale documents. If it has been more than a few years since you signed your power of attorney, it might be time for a new one.
A Good Estate Plan Needs Up-to-Date “Ancillary” Documents
In the estate planning community, Advance Directives, Health Care Powers of Attorney and General Powers of Attorney are called “ancillary” documents. But don’t be fooled by the name – these documents are essential and should be updated as lives, finances, and laws change. Call us if you have any questions. We are always here to help.
Sound Estate Planning, PLLC • 152 3rd Ave. South, Ste. 107 • Edmonds, WA 98020 • (425) 967-7287