I’ve always tried to be a positive person and I’ve always been a planner as well. I believe the more we age, the more we realize we can’t control what happens in life and when things happen. I’m a “Hope for the best and plan for the worst” kind of gal. Sorry, but that is my truth. My guest contributor this month, Kristin Canty, an attorney at Donahue, O’Connell and Riley, has written this blog that I would like to share because she explains these documents much better than I can.
Written By Kristin Canty, Esq.
Partner with the law firm Donohue, O’Connell & Riley PLLC. She focuses her practice on estate and tax planning and elder law matters.
Have you ever considered who would help you if you became incapacitated as a result of an accident, disaster or sudden illness? It is better to legally name your own team of helpers, rather than have a judge appoint people to care for you. The following documents allow you to appoint another person, referred to as an “agent”, to act on your behalf, without giving up any of your own autonomy:
- Power of Attorney – This document allows you to name an agent who can make financial decisions on your behalf. Your agent must act according to your instructions or if you are incapacitated and unable to give instructions, your agent must act in your best interest. Most Power of Attorney documents today are durable, which means the document is effective immediately.
- Health Care Proxy Designation, aka Power of Attorney for Health Care – With a Health Care Proxy you identify a person you trust to make healthcare decisions for you if you are unable to communicate. It is usually a good idea to name a successor health care agent as well.
- Living Will, aka Advance Directive – This is your way of letting your family and friends, doctors and judges know that if you are unconscious and there is no hope of recovery, you want breathing machines and/or feeding tubes to be withheld or withdrawn.
- Finally, everyone should have a Last Will and Testament (Will). If you have strong feelings about who should receive your personal possessions and other assets (home, car, bank accounts, and other financial accounts) after you die, then you should put your instructions in writing, known as your Will. It is a good idea to work with an estate planning attorney who can help you consider the tax consequences and other possible outcomes of your gifts and bequests.
In some cases, you may benefit from transferring real or personal property to a trust. Trusts are an excellent way to transfer assets without involving the Surrogate’s Court. Trusts are also used to minimize estate taxes or to hold property for someone who is vulnerable and would not be able to manage the money on his/her own, such as a minor child, a person suffering from addiction or mental health issues, or a person with cognitive decline or dementia. There are many different types of trusts and many reasons for using trusts; it is best to speak with an estate planning attorney to determine if trust planning is right for you.