What is End of Life Planning?

End of Life Planning saves taxes, court fees and directs care

End of Life Planning involves a number of documents that deal with what happens to you and your estate when you die.

  • Wills and Trusts
  • Power of Attorney
  • Living Will or Advance Directive
  • Advance Funeral Plan
  • Ethical Will

A well-designed Will controls the disposition of one’s property (estate), and cash assets at time of death.  These may include bank accounts, land, furniture, buildings, cars, stocks and bonds, proceeds of life insurance and pension plan benefits contained in the deceased person’s estate.  The Will directs property transfers to a spouse, children or relatives and can ease the tax burden for the recipients.  It directs the probate court in the distribution of the property and payment of debts.  An Ethical will is a letter written to survivors dispensing the wisdom of your life to be shared with them.

A valid Will requires that the maker of the will be:

  1. 18 years of age or older
  2. Be of sound mind at time of preparation.
  3. Must be in writing and signed by the maker
  4. Must be witnessed by at least two people by signing at the end of the will in the presence of the maker.

These rules may vary from state to state.  To have a self-proving will, the witnesses swear to having signed the will before a notary, thus eliminating the need to appear in court to prove their signatures.  This is important because one of the witnesses could pre-decease the maker of the Will or be difficult to find.

Why use an Elder Estate attorney?

Each state may have different rules about what a surviving spouse may have and what goes to the children.  That is why it is very important to retain an Elder Estate attorney to help you sort out all of the variables. It is a very complex part of law which they are trained to handle.  You can find a list of Elder Estate Attorneys by going to http://www.naela.org.

Some states require the Will to name a personal representative to administer the estate upon the death of the Will maker.  A trusted family member, friend or bank or trust company may serve in this capacity. 

There are several ways to avoid the time and expense of going through Probate Court.  Joint ownership is one way of distributing property to the other owner eliminating the need for probate.  Another option is to designate (TOD) on bank accounts, cars, and other property.  TOD means transfer on death to a designated person or entity.  A Living Trust also provides a vehicle for avoiding probate.  All properties and investments are placed in the Trust Entity.  A Trust entity avoids public scrutiny and the expense of probate.  Probate can interrupt the flow of cash to one’s surviving spouse whereas a Living Trust keeps on operating without much change.  It can also help reduce taxes but it must be funded to be used which means that all assets have to be re-titled in the name of the Trust.  A Pour-over Will is a safety net to transfer assets which did not make it into the Trust during the Trust maker’s life.

If an older adult decides to place an adult child’s name on the deed to their property, there are some important considerations:

  1. If you deed your house to your child without keeping your name on it, they can sell your home without your permission and force you out of your house;
  2. If you want to add a person to the deed as a joint tenant (an individual with equal interest and right of survivorship), the deed must say “as joint tenants with right of survivorship”.
  3. If you add someone as a joint tenant, you cannot sell the property later without their consent.  Upon your death the property automatically belongs to the surviving person.
  4. The deed must reflect the name of the current owner.  An attorney will need to be contacted to determine the proper procedure to get the correct name on the title.

Life insurance goes directly to the beneficiary.  If the beneficiary is the estate, the proceeds will be distributed according to the Will.  Both federal and estate taxes will need to be paid before distribution of the Will.

Wills can be revocable or irrevocable.  Revocable Trusts or Wills can be changed while the maker is still alive.  Irrevocable trusts cannot be changed.

What should family do when someone dies? First, check to see if there was a Will or Trust.  The executor will be named in the Will or Trust.  That person should contact the attorney who wrote the document.  If there was no Will, an attorney must be contacted.  If a person did a Will or Trust, they may have also arranged for a pre-paid funeral plan.  There may also be insurance policies involved.  Do not distribute anything until the Will or Trust has been processed and an attorney is involved.  As you can see, end of life planning is a complex event.  If the deceased was young, there may not be much to consider.  However, a person at the end of their life may have accumulated much property and assets.  It gets complicated.  Appropriate planning is a necessity.  Get the proper professionals to discuss consequences and alternatives; then draft appropriate documents.

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