M&A has coined the name ‘Tri-Powers’ to represent the three most basic documents that are the first step in Estate Planning. The Tri-Powers consist of a General Durable Power of Attorney, Healthcare Power of Attorney and a Living Will. These documents are vital in protecting you and your family against incapacities that are certain to occur in life.
Healthcare Powers of Attorney allow you to name primary and alternative agents to make health care decisions for you when you are not able to make the decisions on your own. This document also sets forth important guidelines for your agent to follow in making healthcare decisions for you.
Now, you may be thinking, “if I were in a situation where I was unable to make my own healthcare decisions, my family would be able agree on a course of action and would take care of making those decisions for me.” This may be the case for some of you. But, what if your family members did not agree on the best course of action? What if you were in a coma, with no hope of recovery, kept alive only by artificial life prolonging measures – but because of your family’s indecision, you remained in a vegetative state indefinitely while they argued over the agonizing decision to remove life support? This situation is entirely possible. (see Terri Schiavo case)
A Healthcare Power of Attorney and a Living Will can provide a directive to your Health Care Provider not to artificially sustain life when there is no hope of recovery. This is a ‘pull the plug’ directive so that you will not live on for years in a vegetative state. Healthcare Providers also require a Living Will when you are hospitalized.
These are powerful words in the legal and title industries – almost magical. It means that if these words are present in the title of a document – the moment a co-owner dies, his/her ownership interest in that title vanishes with them. The surviving owner or owners get all of the decedent’s interests automatically and without probate. It’s a very efficient way to avoid probate – but a very dangerous legal potion, if these magical words are not used with knowledge and skill. Why? Because it is also a very efficient way of unknowingly disinheriting a loved-one or of giving Uncle Sam a gift called a gift tax or of giving a creditor a fast track to your assets even if it’s not your debt. Call us and ask about a Living Trust.
Similar with death and taxes, many people hear the word “probate” and cringe. Words and thoughts such as expensive, time-consuming, and fear of the unknown come into mind. But what is probate? Simply put, probate is the legal process that takes place after a person dies by resolving any claims and transferring property of the estate to those who would inherit under the probate court’s supervision.
The probate process involves proving that the deceased person’s will is valid, notifying creditors, resolving debts, paying taxes, identifying the decedent’s property, inventorying the deceased person’s property, and distributing any remaining property according to the will’s terms or under the direction of state law.
For example, in Nevada, after a person dies the executor or administrator will file probate filings in the Clark County Probate Court located in Las Vegas, with the assistance of a probate attorney (you don’t want to attempt this yourself because it is complicated). The probate filings include information such as a list of the decedent’s property, debts, and names of who will inherit the property, etc. Creditors and relatives will be notified of the death and once all required steps have been fulfilled, the court will order the estate’s property to be transferred and distributed to the recipients.
Probate can be time consuming, expensive and nerve wracking, but can be avoided with some basic estate planning. However, if you find yourself in a situation where you must probate the estate of a loved one, we can help you through the process. The death of a loved one is always difficult and we at Michaelson & Associates are here to help and guide you through these difficult times so that you can focus on the more meaningful things in life.
If the unthinkable happens – both parents died and they had not taken the time to prepare their Wills naming guardians for their children – there could be a battle between the families over who gets the children. While the battle is going on and the Judge is trying to decide where the best place is for the children, the Judge may put them into a foster home pending a decision. A simple Will can avoid this horrible situation by naming guardians for minor children.