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Estate and Health Care Planning Basics

Timothy R. Hughes, Esq.
Hughes & Associates, P.L.L.C.

It is likely that all of the readers have now heard of Theresa Schiavo. Regardless of your personal views, the case clearly points out the critical need for each person to document their wishes with respect to estate planning, health care and treatment, and handling of financial affairs. A basic understanding of the terms and concepts surrounding this area of the law is important to know exactly what you need to do to establish your wishes.

What Are Will and Trusts?

A will is a written document which sets forth your wishes regarding disposition of your assets upon your death. In addition, wills can set forth your directions with regards to guardianship of children, burial arrangements, and other matters as well. A “codicil” is a supplementary document signed after a will which amends or adjusts the terms of the will.

A trust is an arrangement where one person holds property for the benefit of another. The person holding the property is the trustee. The beneficiary is the person for whom the property is being held. Trust documents set forth the parameters of how the property is to be held and for whose benefit. For example, you may set up a trust so that the trustee manages your assets for your children’s benefit until they reach a certain age.

What Are “Powers of Attorney” and “Durable Powers of Attorney”?

A power of attorney is a document which gives your agent the power to act on your behalf. Powers of attorney can be drafted in a very limited fashion. For example, you can give a limited power of attorney to an agent to sign one specific document. You can also draft powers of attorney with extremely broad scopes which permit an agent to generally act on your behalf. A durable power of attorney is a power of attorney which expressly survives your incapacity.

What Are Living Wills?

“Living wills” are legal documents establishing your wishes with respect to health care decisions in the event you are unable to articulate those wishes at any time. In some states, these documents are called “advanced health care directives” or “advanced medical directives”. States generally allow a person to designate one specific individual to act as your agent with regards to health care decisions. A living will also permits you to specifically define circumstances in which you would like to continue or discontinue treatment.

Wills, trusts, powers of attorney, and living wills are all governed by state law. Different states apply a variety of requirements for number of witnesses for the documents and who those witnesses may or may not be. It is vitally important that you work with legal counsel who is familiar with the requirements in your specific jurisdiction to ensure that you have legally enforceable documents.

Commentary

The arena of estate planning and living wills is extremely state specific. What works in one state may not work in another. Thus, it is very important that you consult with a lawyer in your particular jurisdiction to make sure you get it right. This is an area of law where it is extremely dangerous to rely upon preprinted forms.

Documentation of your wishes is the best possible way to clearly define who makes decisions if you are unable and what you would like those decisions to be. No document is completely foolproof or can guarantee a result; however, what is clear is that documenting your wishes is far better than failing to do so. While a living will cannot cover every possible situation, it can provide a framework for rational decisions. A living will also can help to alleviate much of the emotional confusion and guilt that can surround these issues. It is far easier for loved ones to deal with difficult decisions if they know they are in fact following your express directions.

In the final analysis, each individual situation is different. What is painfully clear from the Schiavo case is that even a young couple with relatively modest assets and no children can face some extremely difficult and contentious decisions. If you set out your express wishes and directions in writing and comply with your state’s requirements, you can go a long way towards ensuring those wishes are followed and reducing potential conflict in an already challenging situation.