Estate Planning

• Wills and Testamentary Trusts
• Powers of Attorney
• Living Wills
• Guardianships
• Retirement and Tax Planning
• Disability Planning and Special Needs TrustsWills:

The following examples are descriptions of some typical wills and estate plans.  It is important to understand that there is no “one size fits all” approach to estate planning.  All estate plans must be tailor-made to each client based upon consultations with the client and review of client’s financial portfolio and income stream.

Types of Testamentary Wills:

• Outright distribution – simplest form of will; leave the entire estate to spouse and then to children in equal shares.  Outright distribution means there are no trusts in this will.
• Outright distribution with specific bequests – for a couple or single persons with no children; leave set sums to certain individuals and residue to individuals or charities.

• Outright distribution to spouse with testamentary trust for children – Appoints guardian and to take care of children and property of children.  Appoints trustee to manage assets left to children in trust.   Children will receive estate when they reach certain ages determined by you. 

• Disclaimer Trust – allows the surviving spouse to put assets in trust and protect from estate taxes; in the event surviving spouse feels that assets should not be placed in trust, then no disclaimer filed and all assets pass to surviving spouse.

• Credit Shelter – an amount equivalent to federal estate tax exemption is placed in trust for benefit of surviving spouse.  The Credit Shelter Trust will shelter this amount from the estate tax due upon the death of surviving spouse.  Assets in excess of the trust amount are paid to surviving spouse; children are beneficiaries of trust and will inherit upon the death of surviving spouse.

• Credit Shelter Trust w/ QTIP Trust – similar to will above but residue is paid in trust for surviving spouse and not outright.

Powers of Attorney – documents that will allow another individual or individuals (called “the attorney in fact”) to do anything for you, usually financial.  Strongly recommended for anyone over 60 years of age.  This document can eliminate the need for a guardianship action in the event of permanent incapacity. 

Types of Powers of Attorney:

• Immediate appointment – attorney-in-fact is appointed the moment the document is executed.  Powers include the financial, sale of real estate, medical decisions and information, gift-giving, and general banking powers.

• Springing appointment – attorney-in-fact is appointed but cannot exercise powers until the person is incapacitated; requires doctor’s certification of incapacity; may require doctor’s current certification of incapacity at time attorney-in-fact seeks to use the power.

• Special Power of Attorney – used for limited reason, such as acting on your behalf in a real estate purchase or sale or giving someone rights when taking care of your children over an extended absence.  

Living Wills/Health Care Proxy:

• Living Will/Advance Directive – a plan created in advance for end of life decisions including suspension or non-use of ventilators; all medications; mechanical, electrical or other external means; and feeding, nutrition and/or hydration by any means other than natural consumption.  This is different than a DNR (Do Not Resuscitate) order that must be signed by a doctor.  A living will does not prevent resuscitation efforts by health care providers or emergency personnel.
• Health Care Proxy – appoints an individual or individuals to speak on your behalf regarding end of life decisions.
• HIPAA permission – allows your health care proxy to receive all medical information about you that is otherwise protected by the federal privacy law known as HIPAA.
• P.O.L.S.T (Practitioner Orders for Life-Sustaining Treatment)– this is a newer form that is used for very end of life decisions. This form is signed by a physician and contains specific end of life decisions. 

Guardianships: this is an application to the Superior Court to seek the judicial appointment of a person or persons to take care of another (a person whom is declared “incapacitated”).  Process takes several months of filings through the Court to arrive at a Judgment of Guardianship; used when the person whom is declared incapacitated (“the ward”) cannot or will not sign a power of attorney.  Court will appoint an independent attorney to represent the ward through this process.  Guardianships are often implemented for:

• Developmentally Disabled Child Turning 18 Years of Age
• Elderly Person has dementia and family members are unable to properly care for their loved one
• Limited Guardianship – for someone whom can mange one aspect (such as health care) but cannot manage another (such as finances)

Retirement and Tax Planning – during consultation, advise is given for the disposition of retirement assets to minimize income tax yet achieve intent of the client for disposition upon death.  Usually involves review of individual retirement accounts (IRAs), pensions, 401k or other tax deferred investment vehicle.

Disability Planning and Special Needs Trusts – a trust is created to protect benefits of a disabled person.  Normally money passing to a disabled person would cause loss of the need-based benefits.  A trust can be created in which assets would placed and benefit only the “special needs” of the disabled person and would not replace funding which pays for “essential needs.”