When you ask the typical person on the street about estate planning he or she may well tell you that the exercise is all about drawing up a last will to direct distribution of your assets after you pass away.  Everyone is aware of the last will, and it is indeed the most commonly utilized vehicle of asset transfer in the field of estate planning.

But there are other ways to transfer assets to your loved ones, and the last will is not always the best choice.  And beyond this, there is another type of will that should be included in your estate plan that is called a living will.

Some individuals are under the mistaken impression that a living will is a document that somehow arranges for the transfer of assets while you’re still alive.  These people are probably confusing a living will with a living trust.  In fact, a living will has nothing to do with financial issues at all.

A living will is utilized to express your wishes regarding medical decisions.  People sometimes fall into incapacitated states and become unable to communicate with their physicians in real time.  In some of these cases they are being kept alive via the use of artificial life support systems and there is no hope of recovery in the assessment of the doctors.  With a living will you state how you would like to proceed if you were in such a position.

You can imagine how difficult it would be for your family members to make this decision in your behalf if they had no input from you. In addition, members of your family could disagree regarding the best course of action and this makes a horrible matter that much worse.  You can circumvent this possibility by simply executing a living will with the assistance of an experienced, licensed elder law attorney.

Frank & Kraft, Attorneys at Law is a member of the American Academy of Estate Planning Attorneys.

Estate planning attorneys typically utilize multiple variations of the same types of legal instruments.  This can sometimes lead to confusion among people who are trying to understand what estate planning is all about.  Some of these terms are rather wordy and complex, but even some of the simpler ones can be a bit misleading because of the way that they overlap.  With this in mind we would like to clear up some popular misconceptions about three very commonly used estate planning vehicles.

Last Wills

Everyone knows what a last will is in a general sense. It is the most commonly used vehicle of asset transfer for people who are engaged in the process of estate planning.  When you use a last will as your primary vehicle of asset transfer, your estate must pass through the process of probate before your heirs will receive their inheritances.  Probate can be costly and time-consuming, so people sometimes implement strategies to avoid it.

Living Trusts

Living trusts are estate planning vehicles that take effect while the grantor is still alive.  Living trusts offer a number of advantages over last wills, not the least of which is the fact that they facilitate the transfer of assets outside of the probate process.  Because of this many people choose to use living trusts as their primary vehicle of asset transfer instead of last wills.

Living Wills

A living will is an advance health care directive, and as such it does not serve any financial purpose.  With a living will you make your preferences known with regard to the types of medical procedures you would accept and those that you would deny should you become incapacitated at some point in time.  Because most individuals recognize the term “will” as a vehicle of asset transfer, sometimes people will assume that a living will serves the purpose that is actually served by a living trust.

Frank & Kraft, Attorneys at Law is a member of the American Academy of Estate Planning Attorneys.

The fact is that most people don’t pass away when they are in good health, right?  So when you are planning your estate, you invariably find yourself rewinding a bit to the days, weeks, and months prior to the reading of your will.

This leads to the question of how long you should expect to live.  If you examine the statistics you will find that the group of Americans deemed the “oldest old,” which is a term that refers to those who have reached the age of 85 and above, are the fastest growing age group in the United States.

Upwards of 50% of these people suffer from some form of dementia; 40% of the oldest old have Alzheimer’s disease. In addition to these problems with mental cognitive function there are many others that cannot communicate due to physical ailments.

So the facts would indicate that it is very possible that you will live beyond the age of 85, and if you do, you may well be unable to make sound decisions for yourself.

For these reasons and the simple fact that accidents and unexpected illnesses can strike people of all ages, it is a good idea to include advance health care directives in your estate plan.  Most people choose to execute a living will with which they elucidate their preferences with regard to the medical procedures that would accept and those that they would prefer to reject in the event of their incapacitation.

In addition, a health care proxy or durable medical power of attorney is also recommended, and these are especially important for same sex couples. With these instruments you empower someone to make medical decisions in your behalf should you become unable to do so at some point in time.

As we all know, same sex partnerships are not legally recognized in most jurisdictions, so the execution of a medical power of attorney making your partner the attorney-in-fact is a must if you want to make sure that he or she has the legal authority to act in your behalf.

Frank & Kraft, Attorneys at Law is a member of the American Academy of Estate Planning Attorneys.

Many people wonder if they should include instructions in their Will to let loved ones know what kind of medical care they’d like if they’re in the final stages of a terminal illness.

But your Will is not the place for this type of information. In fact, in many cases, your family doesn’t even find your Will until sometime after your death.

What’s more, your Will, by definition, does not take effect until you die – so it’s powerless to make sure that your health care wishes are followed.

The best place to express these wishes is through documents known as Advanced Health Care Directives.

The first, a Living Will, allows you to specify in writing exactly what kind of medical treatment you want – or don’t want – if you are incapacitated. The instructions people leave in advanced medical directives can range from general preferences, such as no artificial life saving measures to the very specific, such as a list of the types of medications they do and don’t want administered.

If you want to go a step further and appoint someone to act on your behalf to make medical decisions for you when you’re no longer able, then you’ll also need a Health Care Power of Attorney.

This document gives someone of your choosing the ability to make medical decisions on your behalf, in the event that the treatments you need are not specifically covered in your Living Will.

And lastly, to ensure that your financial responsibilities are tended to, you can include a Durable Power of Attorney which would give someone of your choosing the ability to make financial decisions and complete financial transactions on your behalf while you’re incapacitated.

Having these documents as part of your estate plan can ensure that you and your assets are protected, no matter what the future might hold.

Frank & Kraft, Attorneys at Law is a member of the American Academy of Estate Planning Attorneys.