A Guide on How to Get Power of Attorney

How to get power of attorney is a common question that many people ask when they need someone to make decisions on their behalf. A Power of Attorney (POA) is a legal document allowing one person, known as the agent or attorney-in-fact, to make decisions for another person, called the principal. Having a POA is crucial because it ensures that someone you trust can handle your affairs if you're unable to do so. There are different types of POAs, each serving unique purposes and scenarios, making it essential to choose the right one for your needs.

Understanding the Types of Power of Attorney

When it comes to handling important matters on behalf of someone else, a Power of Attorney (POA) can be incredibly useful. But did you know there are different types of POA? Each type serves a unique purpose and offers different levels of authority to the agent (the person given the power). Let's dive into the various types and see how they work.

General Power of Attorney

A General Power of Attorney grants broad powers to the agent. This means the agent can make a wide range of decisions on behalf of the principal (the person giving the power). For example, they can manage financial transactions, buy insurance, and settle claims.

Typical Use Cases: - Traveling Abroad: If the principal travels a lot, they might need someone to handle their affairs at home. - Busy Lifestyle: People with hectic schedules may need someone to assist with their day-to-day tasks.

Durable Power of Attorney

What sets a Durable Power of Attorney apart is that it remains in effect even if the principal becomes incapacitated. This can be crucial for long-term planning, especially in healthcare and financial matters.

Importance in Healthcare and Financial Planning: - Healthcare Decisions: This type allows the agent to make medical decisions if the principal can't. - Financial Stability: It ensures that financial matters are taken care of even if the principal is unable to make decisions.

Special Power of Attorney

A Special Power of Attorney is more limited. It grants authority to the agent for specific tasks only. For example, it might allow someone to sell a car or manage a particular bank account.

Scenarios Where It's Applicable: - Single Transactions: When the principal needs help with one specific task, like selling a house. - Temporary Situations: Useful for short-term needs, such as managing affairs during a temporary illness.

Healthcare Power of Attorney

A Healthcare Power of Attorney specifically focuses on medical decisions. This type allows the agent to make healthcare decisions if the principal is unable to do so.

Importance in Medical Situations: - Medical Emergencies: The agent can make quick decisions about medical treatments. - End-of-Life Care: Decisions about life support and other critical health issues can be made by the agent.

Springing Power of Attorney

A Springing Power of Attorney only takes effect under certain conditions, usually when the principal becomes incapacitated. Until then, the agent has no authority.

When It's Most Useful: - Future Planning: This is ideal for people who want to prepare for unforeseen circumstances. - Legal Safeguards: It provides a safety net without giving immediate power.

Military Power of Attorney

Designed specifically for military personnel, a Military Power of Attorney is recognized across states and provides the same authority as other types but is tailored to the unique needs of military life.

Military Life Applications: - Deployment: Military members can appoint someone to handle their affairs while they are deployed. - Frequent Moves: Useful for managing tasks when moving from one base to another.

Final Takeaways: Understanding the different types of POA can help you choose the right one for your needs. Whether it's a General Power of Attorney for broad authority or a Healthcare Power of Attorney for medical decisions, each type has its own set of benefits and applications. Always consult a legal professional to ensure you're making the best choice for your specific situation.

Steps to Create a Power of Attorney

Creating a Power of Attorney (POA) is an important step in planning for the future. It allows someone else, known as the agent, to make decisions on your behalf if you are unable to do so. This guide will walk you through the steps, making the process simple and straightforward.

Choosing the Right Agent

First, you need to choose a trustworthy and competent agent. This person will have the authority to make decisions for you, so it’s crucial to select someone who is reliable and understands your wishes.

Criteria for selecting an agent: - Trustworthiness: Choose someone you trust completely. - Competence: The agent should be capable of making sound decisions. - Availability: Make sure the person is willing and able to take on this responsibility.

Example: Imagine you’re in the military and need someone to handle your affairs while you’re deployed. You might choose a close family member who knows you well and can be trusted to act in your best interest.

Document Execution and Storage

Once you’ve chosen your agent, the next step is to properly execute the POA document. This involves several key steps:

1. Draft the Document: You can use a standard form or have a lawyer draft it to ensure it meets all legal requirements.

2. Sign in Front of Witnesses: Most states require the document to be signed in front of one or more witnesses.

3. Notarization: Some states also require the document to be notarized. This adds an extra layer of authenticity.

After executing the document, it’s important to store it safely. Here are some tips:

• Keep it in a Safe Place: Store the document in a secure but accessible location, like a safe or a locked drawer.

• Inform Your Agent: Make sure your agent knows where to find the document.

• Make Copies: It’s a good idea to make copies and store them in different places, such as with a trusted family member or your attorney.

Example: Think of a scenario where someone has a healthcare POA. They might store the document in a safe at home, but also give a copy to their healthcare provider to ensure it’s readily available in an emergency.

Understanding the Importance

Creating a Power of Attorney is not just about filling out a form. It’s about planning for the future and ensuring your wishes are carried out if you can’t make decisions yourself.

Common Pitfalls: - Not having a backup agent: Always name a secondary agent in case your first choice is unavailable. - Failing to update: Regularly update your POA to reflect any changes in your life or relationships.

Tips: - Communicate Clearly: Talk to your chosen agent about your wishes and expectations. - Review Regularly: Periodically review and update the document to ensure it still aligns with your current situation.

By following these steps, you can create a Power of Attorney that protects your interests and provides peace of mind. Remember, it’s not just about the document; it’s about having someone you trust to make important decisions on your behalf.

Legal and Ethical Considerations

Getting a Power of Attorney (POA) is an important legal step. It allows someone you trust, called the agent, to make decisions on your behalf. This is especially useful if you become unable to make decisions yourself. But there are some important things to consider.

Legal Requirements

To create a POA, you need to follow specific legal steps. First, you must be of sound mind when you sign the document. This means you understand what you are signing. Different states have different rules, so it's a good idea to check your state's requirements. For instance, some states might need you to have the document notarized or witnessed.

Ethical Considerations

Choosing an agent is a big decision. You need someone who will act in your best interest. Unfortunately, there is potential for abuse. Sometimes, the agent might misuse their power. To prevent this, make sure to choose someone you trust completely. It could be a family member, a close friend, or even a professional like an attorney.

You should also set clear guidelines about what your agent can and cannot do. This helps to protect you and makes sure that your wishes are followed.

Preventing Misuse of Power

To prevent misuse, you can take several steps. One way is to appoint more than one agent, so they have to agree on decisions. Another way is to require regular reports from your agent. This way, you can keep track of what they are doing on your behalf. It's also a good idea to review your POA regularly and make changes if needed.

Notarization and Witness Requirements

Importance of Notarization and Witnesses

Notarization and having witnesses are crucial steps in creating a POA. Notarization means that a notary public will confirm your identity and make sure you are signing the document willingly. This adds an extra layer of protection and makes the document more reliable.

Witnesses are also important. They can confirm that you signed the document willingly and understood what you were doing. This can help if there are any disputes later on.

State-Specific Requirements

Different states have different rules for notarization and witnesses. Some states require the document to be notarized, while others may only need witnesses. For example, in California, you might need two witnesses or a notary public. In Florida, a notary public is required. Always check your state's specific requirements to make sure your POA is valid.

In summary, getting a Power of Attorney involves understanding legal and ethical considerations. You need to follow specific steps, choose a trustworthy agent, and make sure the document is notarized and witnessed as needed. By doing this, you can protect yourself and ensure that your wishes are followed.

Special Considerations for Different Life Situations

Military and Overseas Considerations

When it comes to getting a power of attorney (POA), there are special things to think about for different life situations. Let's talk about some of these unique scenarios to help you understand better.

Military Personnel

For our brave military personnel, having a POA is very important. Since they might be deployed or stationed overseas, they need a trusted person to make decisions on their behalf. Here are some key points to consider:

• Special POA Forms: The military has special forms for POA to make sure everything is done correctly. These forms allow military personnel to give someone else the power to handle their affairs while they are away.

• Specific Needs: Military members might need a POA to manage their bank accounts, pay bills, or take care of their homes. It's crucial to have these forms ready before they are deployed.

Handling POA Overseas

If the principal (the person giving the power) or the agent (the person receiving the power) is overseas, there are extra steps to follow:

• Notary Services: You may need to find a notary service, which can sometimes be found at an embassy or consulate. This helps to make sure the POA document is legally recognized.

• Communication: Make sure there is a clear line of communication between the principal and the agent. This is important to handle any issues that might come up quickly.

Elderly Care and Healthcare Scenarios

For elderly people and those in healthcare situations, having a POA is crucial for managing their healthcare and finances. Here are some tips:

• Healthcare POA: This type of POA allows you to make medical decisions for someone who can't make them on their own. It's important for elderly people or those with serious health conditions.

• Financial POA: This type of POA helps manage financial matters like paying bills, managing investments, and taking care of property. It's very helpful if someone is unable to handle their finances themselves.

Data-Driven Insights

Statistics show that more people are getting POAs to prepare for unexpected situations. According to MetLife, having a POA can make life easier for both the principal and the agent. It helps avoid confusion and makes sure that important decisions are made smoothly.

Real-Life Examples

Let's look at a real-life example to make things clearer:

Example:

John is a soldier set to deploy overseas. Before leaving, he fills out a special military POA form to give his wife, Sarah, the power to manage their bank account and pay bills. This way, Sarah can handle everything while John is away, without any problems.

In another case, elderly Mrs. Robinson is in a healthcare facility and unable to make decisions about her treatment. Her daughter, Emma, has a healthcare POA that allows her to talk to doctors and decide on the best care for her mom. Emma also has a financial POA to manage her mom's money, ensuring all expenses are paid on time.

Conclusion

Understanding the special considerations for different life situations can make getting a POA much easier. Whether you're in the military, overseas, or dealing with healthcare and elderly care scenarios, having the right POA in place can provide peace of mind and ensure everything is handled smoothly. Make sure to choose a trusted person as your agent, and keep those communication lines open.

Remember, having a POA is like having a safety net. It helps you and your loved ones manage life's unexpected turns with confidence.

Practical Takeaways and Next Steps

Understanding Power of Attorney is crucial for safeguarding your future and ensuring your wishes are respected. Now that you have a comprehensive guide, it's time to take action. Start by consulting with a professional to draft your POA. Remember, every life situation is unique, and personalized advice can make all the difference. At Tramm Law Firm, we specialize in estate planning and are here to help. Schedule a consultation with us today to discuss your needs and secure your peace of mind. Your future self will thank you!

Last Will vs Living Will Explained

Last will and testament vs living will: These are two vital documents that serve different purposes in estate planning. A last will and testament determines how your assets are distributed after you pass away, while a living will outlines your medical care preferences if you become incapacitated. Understanding both is crucial for comprehensive planning. This guide offers unique insights, real-life examples, and data-driven advice to help you navigate these legal documents. By the end, you'll know the key differences, why both are essential, and how to create them effectively.

What is a Last Will and Testament?

A last will and testament is a legal document that tells everyone how you want to divide your belongings after you pass away. Think of it as a letter to your family and friends explaining who gets what.

Primary Purpose: Distribution of Assets

The main goal of a last will is to make sure your stuff, like money, houses, and even your favorite toys, go to the right people. This way, there are no fights over who gets what. A will can also say who will take care of your pets.

Role of an Executor

An executor is the person you pick to make sure everything in your will happens just like you wanted. They pay any bills you owe and give out your things to the people you chose. This person can be a trusted attorney or a close family member.

What is a Living Will?

A living will is a special document that tells doctors and family what kind of medical care you want if you can't speak or decide for yourself. Imagine you are very sick and can't talk or make decisions. This is where a living will helps.

What It Does

The main purpose of a living will is to outline your medical care preferences. For instance, it can say if you want to be kept on life support or not.

Role of a Health Care Proxy

Sometimes, you may need someone to make decisions for you. This person is called a health care proxy or power of attorney. They follow the instructions in your living will to make sure your wishes are respected.

Key Differences Between a Last Will and a Living Will

Compare and Contrast the Two Documents

A last will and testament and a living will serve different purposes. A last will outlines how you want your estate handled after you pass away. On the other hand, a living will specifies your health care wishes if you can't communicate them yourself.

Real-Life Scenarios

Imagine you're in an accident and can't speak. Your living will tells doctors your wishes about medical care. Now think about what happens to your house after you die—that's where a last will comes in.

Legal Implications

Both documents are legally binding, but they serve different needs. Your state laws may vary, so it's smart to get attorney advice. States like California and New York have specific forms, so check your local rules.

Why Both Documents are Crucial for Estate Planning

Explain Why Having Both Documents is Essential

Having both a last will and testament and a living will is vital for comprehensive estate planning. A last will outlines who gets your stuff when you die, like your house in California or your car in Texas. A living will tells doctors what to do if you can't speak for yourself, like whether you want life support.

Potential Issues if One is Missing

Imagine you live in North Carolina. Without a living will, doctors might not know your wishes for your healthcare. But without a last will, your family might argue over who gets your things. Both documents together ensure your estate and health care wishes are clear.

The Role of an Attorney in Drafting Wills

The Importance of Consulting an Attorney

When creating a last will and testament vs living will, it's crucial to talk to an attorney. They help you understand the differences and make sure your wishes are clear. For example, a living will tells doctors what kind of healthcare you want if you can't speak for yourself, while a last will says who gets your things when you pass away.

How State Laws Affect Drafting

Laws change from state to state. If you live in California or Florida, the rules might be different than in North Dakota or Virginia. An attorney knows these laws and can guide you, so your will is valid.

Benefits of Getting Attorney Advice

Getting attorney advice means you avoid mistakes. They help you create documents like health care directives and can act as a substitute attorney if needed. This way, everything is done right, and your family won't have issues later.

Steps to Create a Last Will and Testament

Creating a last will and testament is important to ensure your belongings go where you want after you pass away. Here's how to do it:

Outline the Step-by-Step Process

First, list all your possessions. Then, decide who gets what. You'll need to pick an executor—someone who will carry out your wishes. You might want an attorney to help you make it official. Once written, sign it and get it witnessed.

Tips on Selecting Beneficiaries and an Executor

Choose people you trust as beneficiaries and an executor. For example, select a family member or a close friend. Make sure they are willing to take on the responsibility.

Importance of Updating the Will

Life changes, so update your will regularly. For instance, if you move to a new state like California or Florida, or if your family grows, make sure your will reflects these changes.

Steps to Create a Living Will

Creating a living will is important to ensure your medical care preferences are followed. Here's how you do it:

Outline the Step-by-Step Process

1. Research State Laws: Each state, like California or Florida, has different requirements. Make sure you know what's needed in your state.

2. Draft Your Wishes: Clearly state what types of medical treatments you want or don’t want. For example, you might specify your preference for life support.

3. Designate a Health Care Proxy: Choose someone you trust to make decisions if you can’t. This could be a family member or friend.

4. Get It Notarized: Some states require your living will to be notarized.

Discuss Your Wishes

Talk to your family and your health care proxy about your decisions. It’s crucial they understand your wishes to avoid confusion later. For example, if you live in North Carolina, make sure your family and proxy know your preferences in case of an emergency.

Legal Requirements for Wills in Different States

Creating a will can be different depending on where you live. California and Texas might have different rules than New York or Florida. It’s important to know the specific requirements for your state.

Variations in Legal Requirements Across States

Some states require witnesses. Others need a notary. For example, in Virginia, you might need two witnesses. In Alabama, a notary might be necessary. This helps make sure your will is valid.

State-Specific Considerations

Each state has its own unique rules. In North Carolina, you might need to file your will with the court. In Arizona, a handwritten will could be accepted. Always check your state’s requirements or ask an attorney for advice.

Understanding these differences can help you make sure your last will and testament or living will is legal and protects your wishes.

Common Mistakes to Avoid When Creating Wills

Not Updating Your Will Regularly

A common mistake is not updating your last will and testament when major life changes happen. Imagine moving to California or getting a new job in Texas – your will should reflect these changes. Update your will when you experience milestones like marriage, divorce, or the birth of a child.

Failing to Choose the Right Executor

Choosing the wrong executor can lead to chaos. Your executor should be trustworthy and organized. For example, picking a friend who lives in North Carolina when you are in Alabama might cause delays. Select someone who lives nearby and understands your wishes.

Not Consulting an Attorney

Many people create their wills without consulting an attorney. This can lead to legal issues. An attorney ensures your will follows state laws in Virginia or Ohio, making it legally sound and effective.

How to Update Your Wills

Explain the Process of Updating Both Types of Wills

Updating your last will and testament or your living will involves a few steps. First, consult with an attorney to ensure you follow the laws of your state. For a last will, you need to draft a new document or add a codicil, a simple amendment. For a living will, create a new form to outline your health care wishes.

Discuss When Updates Are Necessary

You should update your wills when major life events happen. For example, if you move to a new state like California or Virginia, get married or divorced, or have a new child, it’s time to review your documents. Regular updates ensure your estate and health care wishes are honored.

Digital Solutions for Creating Wills

Online Tools and Services for Will Creation

Creating a will online is easier than ever. Services like LegalZoom and Rocket Lawyer offer simple ways to draft a last will and testament or a living will. These tools guide you through each step, helping you understand what to include. For example, you can specify who gets your estate and who will handle your health care decisions.

Benefits and Drawbacks Compared to Traditional Methods

Online will creation is fast and affordable. You don't need to visit an attorney or wait for advice. However, it might not cover complex situations. Traditional methods involve an attorney who can provide personalized advice. This is especially important for people with large estates or specific health care needs. While online tools are great for straightforward cases, traditional methods offer more care for complicated situations.

Frequently Asked Questions About Last Wills

What is a Last Will and Testament?

A last will and testament is a document that tells everyone what you want to happen to your stuff after you pass away. It names someone, called an executor, to carry out your wishes. It also might name a substitute executor in case the first person can't do it.

What is a Living Will?

A living will is different. It tells doctors what kind of health care you want if you can't speak for yourself. For example, if you're very sick and can't make decisions, a living will helps doctors know your wishes. It’s not about who gets your things, but about your health care decisions.

Do I Need Both?

Yes, it's a good idea to have both. A last will and testament handles your stuff, while a living will takes care of your health wishes. Talking to an attorney can help you make sure you have everything in order.

Frequently Asked Questions About Living Wills

What is a Living Will?

A living will is a document that states your wishes for medical care if you become unable to communicate. For example, you might specify whether you want life support or other treatments. It helps doctors and your family know what you want, which can make tough decisions a bit easier.

Do I Need an Attorney to Make a Living Will?

You don’t necessarily need an attorney to create a living will, but it can be helpful. Laws vary from state to state, so getting attorney advice can ensure your document meets local requirements. Attorney advice can also help you understand the process better.

Is a Living Will the Same in Every State?

No, each state has different rules and forms for a living will. For example, a living will in California might look different from one in Florida. It’s important to check the rules in your state to make sure your living will is valid.

The Impact of State Laws on Wills

Different State Laws Affecting Wills

State laws can greatly impact your last will and testament. For example, in California, at least two witnesses must sign your will. But in North Carolina, only one witness is needed. Simple differences like these can affect whether your will is valid. Some states, like Alaska, even allow handwritten wills without witnesses, called holographic wills.

What Happens if You Die Without a Will?

If you die without a will, intestacy laws decide who gets your stuff. These laws vary by state. For instance, in Virginia, if you have a spouse and kids, your spouse gets one-third of your estate, and your kids get the rest. In Texas, if you’re not married, your parents might inherit everything. Understanding these rules helps protect your family and your wishes.

The Importance of Communication

Emphasize Discussing Your Wishes with Family and Designated Agents

Talking to your family and your substitute attorney is super important. Make sure everyone knows your wishes about health care and estate planning. This helps avoid confusion later on.

Provide Tips for Effective Communication

Use clear words and be honest. Write down your wishes and share them with your family. Meet with your attorney to ensure everything is legally sound.

Can a Living Will Be Overridden?

Discuss Scenarios Where a Living Will Might Be Challenged

Sometimes, a living will can be challenged. For example, if the form is not filled out correctly or if family members disagree on your care.

Explain Legal Protections

Different states have laws to protect your wishes. Always get advice from an attorney to make sure your living will is strong and can’t be easily overturned.

How to Store Your Wills Safely

Best Practices for Storing Physical and Digital Copies

It's crucial to know where to store your last will and testament and living will. For physical copies, keep them in a fireproof safe at home or a secure box at your bank. For digital copies, use encrypted cloud storage. Always have backup copies in different locations.

Who Should Have Access

Only trusted people should have access to your wills. This includes your attorney, spouse, or adult children. Make sure they know where the documents are stored and how to access them. If you have a health care directive, your doctor should also have a copy. This way, everyone knows your wishes when the time comes.

Costs Associated with Creating Wills

Creating a will is important, but it can come with various costs. Let's explore them.

Typical Costs

When making a will, you may spend money on different things. A DIY will kit might cost around $20-$100, depending on the state you live in. For example, in California or Florida, prices might differ.

DIY Options vs. Attorney Services

If you choose to use an attorney, it could cost between $300 and $1,000. An attorney can give you advice and ensure your estate and health care wishes are clear. This can be crucial in states like New York or Texas. On the other hand, DIY options are cheaper but may lack personalized guidance.

In summary, while DIY wills are cost-effective, an attorney can provide tailored advice to protect your interests.

How to Choose the Right Executor and Health Care Proxy

Criteria for Selecting Trustworthy Individuals

When choosing an executor or health care proxy, pick someone you trust completely. They should be reliable, organized, and good at making decisions. For example, your best friend might be great at managing your estate, while your sibling might be better suited to make health care decisions.

Responsibilities of Each Role

The executor handles your last will and testament. They ensure your estate is distributed according to your wishes. If you live in California or Florida, they must follow state laws. The health care proxy makes medical decisions if you can't. This person should understand your wishes about living and medical care.

By choosing the right people, you can ensure your wishes are respected and your affairs are in good hands.

Costs Associated with Creating Wills

Creating a will is essential to ensure your wishes are honored. Let's break down the costs involved.

Typical Costs

Creating a will can range in price. A simple last will and testament might cost from $150 to $1,000 if you use an attorney. If your estate is more complex, the price can go higher.

DIY Options vs. Attorney Services

If you’re looking to save money, DIY options like online forms can cost around $20 to $100. However, hiring an attorney gives you personalized advice and ensures everything is legally sound, which might be worth the higher cost.

Whether you go the DIY route or use an attorney, the choice depends on your needs and budget.

How to Choose the Right Executor and Health Care Proxy

Choosing the right executor and health care proxy is crucial for ensuring your wishes are respected. Here are some tips to help you make the best choice.

Criteria for Selecting Trustworthy Individuals

Firstly, you want someone responsible and reliable. For example, your executor should be someone who can handle financial matters and follow through with tasks. Think of someone who is organized and good with details, like your friend who always manages to plan the perfect vacation.

For your health care proxy, choose someone who understands your wishes about medical treatment. This should be someone you trust to make tough decisions if you're unable to speak for yourself. A close family member or a long-time friend who knows you well might be a good choice.

Responsibilities of Each Role

Executor: This person will manage your estate after you pass away. They will pay off any debts and distribute your assets according to your last will and testament. Imagine your executor like the manager of a big project, ensuring everything goes smoothly.

Health Care Proxy: This person will make medical decisions on your behalf if you can't. They will work with your doctors to ensure your healthcare wishes are followed. Picture your health care proxy as your voice when you're unable to speak.

By carefully choosing the right people for these roles, you can have peace of mind knowing your wishes will be honored.

Wrap-Up: Your Path to Peace of Mind

Understanding the differences between a last will and a living will is crucial for comprehensive estate planning. By having both documents, you ensure your assets are managed as you wish and your medical care preferences are honored. Don't leave these important decisions to chance. Take action today for your family's future and financial well-being. I highly recommend scheduling a telephone consultation with the Tramm Law Firm. Their expertise in estate planning and asset protection will guide you every step of the way. Schedule a free consultation with us button now to get started.

How an Estate Planning Attorney Can Secure Your Future

Estate planning is a topic many people avoid, but it plays a critical role in protecting your assets and ensuring your family's future. An estate planning attorney can help you navigate the complexities of wills, trusts, and other important documents. But what exactly does an estate planning attorney do, and why is it so important to have one? Let’s dive in to answer these questions and more.

Key Takeaways

• An estate planning attorney helps you create strategies to manage and distribute your assets.

• They provide guidance on creating wills, trusts, and other legal documents.

• They ensure your estate planning aligns with current laws to avoid complications.

• Estate planning attorneys are crucial for minimizing estate taxes and protecting your beneficiaries.

Understanding Estate Planning

Estate planning involves preparing tasks that serve to manage an individual's asset base in the event of their incapacitation or death. This includes the bequest of assets to heirs and the settlement of estate taxes. Most estate plans are set up with the help of experienced attorneys and financial advisors.

The Role of an Estate Planning Attorney

An estate planning attorney specializes in the laws and regulations related to wills, trusts, estates, and probate. Here are some of the key responsibilities they handle:

1. Creating Wills and Trusts

Creating a will is one of the most basic functions an estate planning attorney performs. They help draft legal documents that define how your assets will be distributed upon your death. Trusts can also be set up to manage your assets during your lifetime and after.

2. Minimizing Estate Taxes

One of the significant advantages of working with an estate planning attorney is minimizing estate taxes. They can create strategies to reduce the tax burden on your beneficiaries.

3. Avoiding Probate

Probate can be a lengthy and costly process. An estate planning attorney can help structure your estate to avoid probate, ensuring your assets are distributed more efficiently.

4. Setting Up Power of Attorney

A power of attorney allows someone to make decisions on your behalf if you become incapacitated. An estate planning attorney can help you designate a trusted individual for this role.

5. Healthcare Directives

An estate planning attorney can also assist in setting up healthcare directives, such as a living will or healthcare power of attorney, to ensure your medical wishes are followed.

Why You Need an Estate Planning Attorney

Legal Expertise

Estate laws can be complicated and vary by state. An estate planning attorney has the expertise to ensure your estate plan complies with current laws and regulations.

Personalized Service

Every individual’s situation is unique. An estate planning attorney can provide personalized advice and create a customized plan that best suits your needs and goals.

Peace of Mind

Knowing that your estate plan is legally sound can provide peace of mind for you and your loved ones. An attorney can help ensure that your wishes are carried out exactly as you intended.

Real-Life Examples

Example 1: Avoiding Family Disputes

Consider the case of the Johnson family. After Mr. Johnson passed away, his children disputed over the distribution of his assets. This led to lengthy court battles and strained relationships. If Mr. Johnson had worked with an estate planning attorney to create a clear and legally binding will, these disputes could have been avoided.

Example 2: Protecting a Special Needs Child

Mrs. Smith has a special needs child who requires ongoing care. By working with an estate planning attorney, she was able to set up a special needs trust. This ensures that her child will receive the necessary care without jeopardizing their eligibility for government benefits.

Steps to Finding the Right Estate Planning Attorney

Finding the right estate planning attorney is crucial. Here are some steps to help you get started:

1. Ask for Referrals

Start by asking friends, family, or financial advisors for referrals.

2. Check Credentials

Verify that the attorney is licensed and has experience in estate planning.

3. Conduct Interviews

Meet with several attorneys to discuss your needs and see if you feel comfortable with them.

4. Ask About Fees

Understand how the attorney charges for their services and ensure it fits within your budget.

What to Expect in Your First Meeting

During your first meeting with an estate planning attorney, you can expect to discuss your financial situation, family dynamics, and your goals for your estate plan. Be prepared to provide information about your assets, liabilities, and any existing estate planning documents.

Common Documents Prepared by Estate Planning Attorneys

Will : Specifies how assets are distributed after death

Trust : Manages assets during life and after death

Power of Attorney : Designates someone to make decisions if incapacitated

Healthcare Directive : Specifies medical wishes if unable to communicate

Living Will : Provides instructions for end-of-life medical care

Table 2: Benefits of Estate Planning

Avoiding Probate Streamlines : asset distribution

Reducing Estate Taxes : Minimizes tax burden on beneficiaries

Protecting Beneficiaries : Ensures assets are managed according to your wishes

Planning for Incapacity : Designates decision-makers for medical and financial matters

Providing Peace of Mind : Offers assurance that your wishes will be honored

List: Essential Tips for Estate Planning

1. Start Early: The earlier you start planning, the better.

2. Review Regularly: Update your estate plan as life circumstances change.

3. Communicate Your Wishes: Clearly communicate your plans to your beneficiaries.

4. Choose the Right Executor: Select a trustworthy and capable executor for your will.

5. Consider a Professional: Work with an estate planning attorney to ensure everything is legally sound.

Common Mistakes to Avoid

Even with careful planning, mistakes can happen. Here are some common pitfalls to avoid:

1. Not Updating Your Plan

Life changes, such as marriage, divorce, or the birth of a child, may require updates to your estate plan.

2. Failing to Plan for Incapacity

Many people focus solely on what happens after they die, but planning for incapacity is equally important.

3. Overlooking Digital Assets

In today’s digital age, it’s essential to include instructions for managing digital assets, such as online accounts and digital currencies.

The Cost of Hiring an Estate Planning Attorney

The cost of hiring an estate planning attorney can vary widely based on the complexity of your estate and the attorney’s experience. Some attorneys charge a flat fee, while others bill by the hour. It’s essential to discuss fees upfront and understand what services are included.

The Importance of Regular Reviews

Estate planning is not a one-time task. It requires regular reviews and updates to ensure it still aligns with your wishes and current laws. Schedule periodic reviews with your estate planning attorney to keep your plan up to date.

Conclusion

An estate planning attorney is invaluable in creating a comprehensive and legally sound estate plan. They can help you navigate the complexities of wills, trusts, and other essential documents to ensure your assets are protected and your wishes are honored. By taking the time to invest in estate planning, you can provide peace of mind for yourself and your loved ones, knowing that your affairs are in order.

The SECURE Act’s Impact On Estate and Retirement Planning—Part 1

On January 1, 2020, the Setting Every Community Up for Retirement Enhancement Act (SECURE Act) went into effect, and it represents the most significant retirement-planning legislation in decades.

Indeed, the changes ushered in by the SECURE Act have dramatic implications for both your retirement and estate planning strategies—and not all of them are positive. While the law includes a number of taxpayer-friendly measures to boost your ability to save for retirement, it also contains provisions that could have disastrous effects on planning strategies families have used for years to protect and pass on assets contained in retirement accounts.

Given this, if you hold assets in a retirement account you need  to review your financial plan and estate plan as soon as possible. To help you with this process, here we’ll cover three of the SECURE Act’s biggest changes and how they stand to affect your retirement account both during your lifetime and after your death. Next week, we’ll look more deeply into a couple of additional strategies you may want to consider.

1. Increased age for Required Minimum Distributions (RMD)
Prior to the SECURE Act, the law required you to start making withdrawals from your retirement account at age 70 ½. But for people who haven’t reached 70 ½ by the end of 2019, the SECURE Act pushes back the RMD start date until age 72.

2. Repeal of the maximum age for IRA contributions
Under previous law, those who continued working could not contribute to a traditional IRA once they reached 70 ½. Starting in 2020, the SECURE Act removed that cap, so you can continue making contributions to your IRA for as long as you and/or your spouse are still working.

These two changes are positive because with our increased life spans people are now staying in the workforce longer than ever before, and the new rules allow you to continue contributing to your retirement accounts and accumulating tax-free growth for as long as possible.

However, to offset the tax revenue lost due to these beneficial changes, as you’ll see below, the SECURE Act also includes some less-favorable changes to the distribution requirements for retirement accounts after your death.

3. Elimination of stretch provisions for inherited retirement accounts
The part of the SECURE Act that’s likely to have the most significant impact on your heirs is a provision that makes significant changes to distribution requirements for inherited retirement accounts, and effectively ends the so-called “stretch IRA.”

Under prior law, beneficiaries of your retirement account could choose to stretch out distributions—and, therefore, the income taxes owed on those distributions—over their own life expectancy. For example, an 18-year old beneficiary expected to live an additional 65 years could inherit an IRA and stretch out the distributions for 65 years, paying income tax on just a small amount of their inheritance every year. And in that case, the income tax law would encourage the child to not withdraw and spend the inherited assets all at once.

Under the SECURE Act, however, most designated beneficiaries will now be required to withdraw all the assets from the inherited account—and pay income taxes on them—within 10 years of the account owner’s death. Those who fail to withdraw funds within the 10-year window face a 50% tax penalty on the assets remaining in the account.

The law does offer exemptions to the mandatory 10-year withdrawal rule for certain beneficiaries, known as eligible designated beneficiaries (EDB):

1.      A surviving spouse named as an outright beneficiary of a retirement plan still has the option of rolling over the benefits to his or her own IRA or taking distributions based on his or her own life expectancy.

2.      Beneficiaries who are less than 10 years younger than you can still take distributions based on their own life expectancy.

3.      Your minor children, who have not reached the “age of majority” don’t have to deplete the account until 10 years after they come of age.  Yet that still would be a much shorter “stretch” than previously available.

4.      Disabled individuals and chronically ill individuals can take distributions based on their life expectancy.

Apart from these exceptions, opportunities for stretching an IRA over an extended period of time are no longer available. This means if you want the people who will inherit your retirement account after your death to benefit from long-term income tax deferral—as well as asset protection from lawsuits, creditors, or divorce—you must meet with us now to rework your plan.

Impact on trusts: Depending on the value of your retirement account, you may have already addressed the distribution of its assets using a “conduit” provision in your will, revocable trust, or standalone retirement trust. Prior to the SECURE Act, a trustee of a trust that included a conduit provision would only distribute the required minimum distributions (RMD) to trust beneficiaries each year.

This allowed the beneficiary to take advantage of the continued “stretch” based on their age and life expectancy. In this way, the conduit trust protected the account balance and only exposed the much smaller RMD amounts to creditors and divorcing spouses.

Under the SECURE Act, however, the 10-year limit for taking distributions will lead to the acceleration of income tax due, possibly bumping your beneficiaries into a higher income tax bracket. This potentially hefty tax burden would likely result in your beneficiary receiving significantly less funds from the retirement account than you had initially planned on.

What’s more, because the SECURE Act requires all funds in your retirement account to be withdrawn within 10 years after your death, a conduit trust would be required to distribute all of its assets outright to the beneficiary within this shortened period. This means you would also lose any long-term asset protection you may have built into your plan.

Alternative options: Given the SECURE Act’s new rules, you may want to consider amending your trust to shift it from a “conduit trust” to become an  “accumulation trust.” Such a trust structure can’t extend the tax benefits any longer than 10 years, but it can ensure the assets are protected from your beneficiary’s future risky activities and/or a divorce.

One important thing to note: Retained distributions from a traditional IRA distributing to an accumulation trust would be exposed to compressed income tax rates that apply to trusts. Currently, trusts reach the maximum 37% tax bracket with undistributed taxable income of $12,950. Facing such a tax hit, if you opt for this solution, your plan should include additional strategies to address the tax obligation. We’ll share some options for this in next week’s article.

Update your estate plan now

At Tramm Law Firm, PLLC, we can update your plan to address all of the potential ramifications the SECURE Act might have on the distribution of your retirement account’s assets to your loved ones following your death. But to do that, we need to meet with you to consider your family dynamic and all of your assets, so we can thoroughly assess the big-picture impact the SECURE Act stands to have on your estate.

This is exactly what we do during our Family Wealth Planning Session, a two-hour, working meeting that educates and empowers you to know you’ve done the right thing for the people you love no matter what happens to you. Whether you’ve yet to create a plan or already have one created another lawyer, schedule an appointment today.

Next week in the second part of this series, we’ll cover some of the potential ramifications the SECURE Act stands to have on your financial-planning strategies and how you can make the most of the new legal landscape.

Buyer Beware: The Hidden Dangers of DIY Estate Planning—Part 1

Buyer Beware: The Hidden Dangers of DIY Estate Planning—Part 1 

Do a Google search for “online estate planning documents,” and you’ll find dozens of different websites. From Legal Zoom® and Willing.com to Rocket Lawyer® and Willandtrust.com, these do-it-yourself (DIY) planning services might seem like an enticing bargain.

The sites let you complete and print out just about any kind of planning document you can think of—wills, trusts, healthcare directives, and/or power of attorney—in just a matter of minutes. And the documents are typically quite inexpensive, with many sites offering simple wills for $50 or less.

At first glance, such DIY planning documents might appear to be a quick and inexpensive way to finally cross estate planning off your life’s lengthy to-do list. You know planning for your death and potential incapacity is important, but you just never seem to have time to take care of it.

And even if you realize your DIY plan won’t be as good as those prepared by a lawyer, at least it can serve as a temporary solution, until you can find time to meet with an attorney to upgrade. These forms may not be perfect, you reason, but at least they’re better than having no plan at all.

However, relying on DIY planning documents can actually be worse than having no plan at all—and here’s why:

An inconvenient truth

Creating a plan using online documents, can give you a false sense of security—you think you’ve got planning covered, when you most certainly do not. DIY plans may even lead you to believe that you no longer need to worry about estate planning, causing you to put it off until it’s too late.

In this way, relying on DIY planning documents is one of the most dangerous choices you can make. In the end, such generic forms could end up costing your family even more money and heartache than if you’d never gotten around to doing any planning at all.

At least with no plan at all, planning would likely remain at the front of your mind, where it rightfully belongs until it’s handled properly.

Planning to fail
Many people don’t realize that estate planning entails much more than just filling out legal forms. Without a thorough understanding of how the legal process works upon your death or incapacity, you’ll likely make serious mistakes when creating a DIY plan. Even worse, these mistakes won’t be discovered until it’s too late—and the loved ones you were trying to protect will be the very ones forced to clean up your mess.

The whole purpose of estate planning is to keep your family out of court and out of conflict in the event of your death or incapacity. Yet, as cheap online estate planning services become more and more popular, millions of people are learning—or will soon learn—that taking the DIY route can not only fail to achieve this purpose, it can make the court cases and family conflicts far worse and more costly.

One size does not fit all
Online planning documents may appear to save you time and money, but keep in mind, just because you created “legal” documents doesn’t mean they will actually work when you need them. Indeed, if you read the fine print of most DIY planning websites, you’ll find numerous disclaimers pointing out that their documents are “no substitute” for the advice of a lawyer.

Some disclaimers warn that these documents are not even guaranteed to be “correct, complete, or up to date.” These facts should be a huge red flag, but it’s just one part of the problem.

Even if the forms are 100% correct and up-to-date, there are still many potential pitfalls that can cause the documents to not work as intended—or fail all together. And without an attorney to advise you, you won’t have any idea of what you should watch out for.

Harold should feel happy because he just saved money by doing his own estate planning using forms he downloaded off of the internet. But he still feels like he might be missing something . . .

Estate planning is definitely not a one-size-fits-all kind of deal. Even if you think your particular planning situation is simple, that turns out to almost never be the case. To demonstrate just how complicated the planning process can be, here are 4 common complications you’re likely to encounter with DIY plans.

1. Improper execution
To be considered legally valid, some planning documents must be executed (i.e. signed and witnessed or notarized) following very strict legal procedures. For example, many states require that you and every witness to your will must sign it in the presence of one another. If your DIY will doesn’t mention that (or you don’t read the fine print) and you fail to follow this procedure, the document can be worthless.

2. Not adhering to state law
State laws are also very specific about who can serve in certain roles like trustee, executor, or financial power of attorney. In some states, for instance, the executor of your will must either be a family member or an in-law, and if not, the person must live in your state. If your chosen executor doesn't meet those requirements, he or she cannot serve.

3. Unforeseen conflict

Family dynamics are—to put it lightly—complex. This is particularly true for blended families, where spouses have children from previous relationships. A DIY service cannot help you consider all the potential areas where conflict might arise among your family members and help you plan ahead of time to avoid it. When done right, the estate planning process is actually a huge opportunity to build new connections within your family, and we’re specifically trained to help you with that. In fact, that’s our special sauce.

We’ve all seen the impact of families ripped apart due to poor planning. Yet, every day we see families brought closer together as a result of handling these matters the right way. We want that for your family. 

4. Thinking a will is enough

Lots of people believe that creating a will is sufficient to handle all of their planning needs. But this is rarely the case. A will, for example, does nothing in the event of your incapacity, for which you would also need a healthcare directive and/or a living will, plus a durable financial power of attorney.

Furthermore, because a will requires probate, it does nothing to keep your loved ones out of court upon your death. And if you have minor children, relying on a will alone could leave your kids vulnerable to being taken out of your home and into the care of strangers.

Don’t do it yourself

Given all of these potential dangers, DIY estate plans are a disaster waiting to happen. And as we’ll see next week, perhaps the worst consequence of trying to handle estate planning on your own is the potentially tragic impact it can have on the people you love most of all—your children.

Next week, we’ll continue with part two in this series on the hidden dangers of DIY estate planning.

If you’ve yet to create a plan, have DIY documents you aren’t sure about, or have a plan created with another lawyer’s help that hasn’t been reviewed in more than a year, schedule a 15 minute phone call to determine if we can help you by clicking the button below. We can ensure that your plan will work exactly as intended if something should happen to you. Contact us today to learn more.