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Lutz Attorneys
4334 W. Central Ave.
Toledo, Ohio 43615
419-578-9211

Lonnie R. Lutz
Attorney at Law

Lutz@LutzAttorneys.com

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Wills

The most basic estate plan consists of three documents:   

1.   Last Will and Testament

2.   General Durable Power of Attorney

3,   Medical Advanced Directives

a.  Health Care Power of Attorney

b.  Living Will (if you elect to create a Living Will)

c.  Privacy Act (HIPPA) Authorization.

Some individuals and families need more sophisticated estate planning, including revocable trusts, irrevocable trusts, and other asset protection tools.

Last Will and Testament

A Last Will and Testament has three basic purposes:

1.    Appoint someone to handle your affairs after you have died.

2.    Pay and otherwise settle all your debts and taxes.

3.    Distribute the money that is left over to the people or charities you named.

1.    Executor

An Executor is appointed to administer your Last Will and Testament.  Your Executor has three basic duties:

a.    Collect, identify, and evaluate all your assets and all your debts.

b.    Pay and otherwise settle all your debts and taxes.

c.    Distribute the money that is left over to the people or charities you named.

2.    Guardian

If you leave a minor (under the age of 18 years)  child at the time you pass away, the Probate Court will appoint a Guardian to raise the child and handle the child’s affairs until the child reaches the age of 18 years.

You can nominate a person to serve as Guardian for your minor children.  Typically you want to nominate someone who holds values and attitudes toward parenting that are similar to your own.

A Guardian has two primary responsibilities:

a.    Act as a parent of the child, raising the child until it reaches the age of 18 years.

b.    Follow the instructions of the Probate Court.

Then, when the child reaches the age of 18 years, he or she can leave the guardianship, collect whatever Estate money remains in the hands of the Guardian, and go on his or her way.

There is some risk in putting a lot of Estate money in the hands of an 18 year old person.  He or she is legally an adult, but may not be mature enough to handle a large inheritance.  A Testamentary Trust may offer some protection for the young or immature beneficiary.  You might address this concern by using a testamentary trust to hold a child’s inheritance until the child is older than 18 years.


3.    Specific Gifts

Some people want to make gifts of specific personal items or of an amount of money to an individual or to a charity.  These gifts can be accomplished in three ways.

To Individuals:

a.    Identifying specific items of personal property.  For example, “I give the  piano that I inherited from my grandmother to my granddaughter, Susan.”

b.    Giving a set amount of money.  For example, “I give Five Hundred  Dollars ($500.00) to my granddaughter, Susan.”

c.    Giving a percentage of your Estate.  For example, “I give ten percent  (10%) of my Estate to my granddaughter, Susan.”

To Charities:

a.    Identifying specific items of personal property.  For example, “I give the piano that I inherited from my grandmother to St. John the Baptist School.”

b.    Giving a set amount of money.  For example, “I give Five Hundred Dollars ($500.00) to St. John the Baptist School.”

c.    Giving a percentage of your Estate.  For example, “I give ten percent (10%) of my Estate to St. John the Baptist School.”

Conditions:

Specific gifts also can be given with or without conditions.  Conditions are your instructions for how the gift is to be used.  For example, a gift of money to your granddaughter for her education might read something like this:

“I give Five Hundred Dollars ($500.00) to my Granddaughter, Susan and I direct that she use the money for school tuition and for no other purpose.”

You also may restrict a gift to a charity:  

“I give Five Hundred Dollars ($500.00) to St. John the Baptist School to use toward scholarships for children who demonstrate financial need.”


4.    Residuary

The Residuary of your Estate is defined as what is left after payment of: 

a.    Debts

b.    Expense of administration

c.    Taxes

d.     Specific Gifts

The Residuary of your Estate is divided among the Residuary Beneficiaries of your Estate in one of two ways: 

a.    Equally

b.    Not Equally

5.    Special Needs Beneficiaries

In the case of a child or other beneficiary with special needs, that is, a beneficiary who is and who likely will remain unable to support himself or herself, a host of other matters must be considered for the special needs beneficiary after you are no longer able to provide the needed care.  Among those considerations are the quality of life of the beneficiary and the standard of living of the beneficiary.  

Consider:  
Who will decide how the funds are spent?  
Who will decide what is in your beneficiary’s best interest?  
Who will look after your beneficiary’s daily needs?  
Who will supervise care and see to it that your beneficiary receives the necessary care?

The quality of your plan will determine the quality of life and the standard of living of your special needs beneficiary.

If your beneficiary is receiving public assistance, planning offers additional challenges in that an inheritance may produce very undesirable results. Two principal concerns arise in planning for a special needs beneficiary who is receiving public assistance.

a.    An inheritance passing to a beneficiary who is receiving need-based public  assistance would cause the beneficiary to lose that public assistance.  Then what?  

b.    After the inheritance is spent the beneficiary would have to reapply under the rules and regulations in effect at the time of the new application.  This scenario leads to unpredictable and possibly undesirable results.

How do you protect your special needs beneficiary and that person’s inheritance?  There are ways to provide appropriate benefits and management for your special needs beneficiary without interrupting his or her public benefits.  However, these planning tools are available only to those who invest the time and effort to plan.  No one will do it for you.

6.    Two Facts about Wills

Two very important facts about the Last Will and Testament:

a.    It operates only after you die.  If you need assistance during your lifetime, the Last Will and Testament does not help.

b.    It operates only in Probate Court for the County in which you are domiciled at the  time of your death.  It is the Order of the Court that empowers your Executor to carry out the instructions contained in your Last Will and Testament.

7.    Alternative Planning

Many individuals and married couples seek to avoid the processes of Probate Court in any one of three ways:

a.    Titling their assets in survivorship.

b.    Using Transfer on Death arrangements.

c.    Using a Revocable Living Trust.

d.    Using an Irrevocable Living Trust.

These alternate arrangements have various benefits and risks.  These topics are beyond the scope of the present discussion.  We encourage you to learn more about how each of these transfer methods works and what benefits any of these methods might offer you and your loved ones.

8.    Other Important Parts of Your Plan

In addition to a Last Will and Testament, you should think about other situations.  Remember, your Will operates only after you have died.  What if you are really sick and you need someone to help with your routine personal affairs, like paying bills and filing insurance claims?  Unless you have appointed someone, the Court may have to step in to appoint a Guardian for you.  

A much more agreeable alternative is the Durable General Power of Attorney.

9.    Durable General Power of Attorney

Power of Attorney

A Power of Attorney is a document in which you appoint an agent to handle certain business for you and in which you grant certain authority and certain powers to your agent.

General

A Power of Attorney may be either General of Limited.  A General Power of Attorney is one that covers a very broad range of topics and is intended to allow the person you appoint to conduct any business on your behalf.

Durable

The Power of Attorney is Durable if it contains language that allows it to continue to be effective even if you are no longer competent.


10.    Durable Medical Power of Attorney

A Medical Power of Attorney is a document in which you appoint an agent to handle certain specific or limited business for you and in which you grant certain authority and certain powers to your agent.

Limited

A Medical Power of Attorney limits your Agent’s authority to medical and health care matters.

Springing

A Durable Medical Power of Attorney is a “Springing” Power of Attorney.  That term means that the Medical Power of Attorney only “springs” into effect if you become unconscious or otherwise incompetent.  As long as you are able to make medical decisions for yourself, the Medical Power of Attorney is of no effect.

Durable

The Power of Attorney is Durable if it contains language that allows it to continue to be effective, even if you are no longer competent.


11.    Living Will

A Living Will is not a Will.  

A Living Will is not about living.  

A Living Will is a poorly named document.  

A Living Will is a declaration that states, in short:  If you are not able to make decisions for yourself, and you are about to die, you would like your family and your medical providers to allow you to pass away.

Springing

A Living Will is a “Springing” document.  That term means that the Living Will only “springs” into effect if you become unconscious or otherwise incompetent.  As long as you are able to make medical decisions for yourself, the Living Will is of no effect.


12.    Privacy Act Authorization

HIPAA:  Health Insurance Portability and Accountability Act.  Called simply the “Privacy Act” it impacts many aspects of our lives in addition to the sharing of medical information.

Every time you enter a medical facility, you are asked to sign a Privacy Act form allowing the doctors and others to talk with your family, your insurance company and others about your care.

The problem arises if and when you enter a medical facility and you are not conscious.  Your are not able to sign the Privacy Act form.  Some facilities take the position that they can’t even tell your family that you are in the hospital.

That is not very practical, but the Federal HIPAA law is very strict.

You can avoid a problem in the matter of getting your medical information to your family and others if you create a HIPAA Authorization as part of your Estate Plan.  Then, whenever you are in a medical facility, if you are unconscious, your loved ones will always be able to get information about your condition and your care.


What Now?

Now that you have increased your understanding of Estate planning, you can make better decisions.  Your better decisions will benefit you and your loved ones.

Create

If you have not created a Last Will and Testament and other basic Estate Planning documents, you should schedule an appointment now to get this part of your life in order.

Review

If you have a Last Will and Testament or other documents in place, you should review them to be certain they conform to current legal standards.

You also should review the names of the persons you have appointed or nominated as Executor, Guardian, Trustee, Beneficiary, Power of Attorney Agent, Medical Agent, to be sure you still are comfortable with the team you have named.

Share

Brief your loved ones on the location of your documents, on your team of professional advisors, and on who is to step forward when it is time for someone else to handle your affairs.

When?

We often hear the question:  “When should I plan?”

The answer is simple.  Plan long before the need arises.

If you don’t know when the need for your Estate Plan will arise, then the only safe thing to do is to get it done so it will be there when you need it.

Peace of mind:  You and your loved ones will be glad you did.

Disclaimer

The information contained in this Web site is offered for educational purposes only. The contents of this Web site are not legal, tax, or financial advice for any purpose. Your reading the content of this Web site does not create an Attorney Client relationship. If you have legal, tax or financial questions about these or any other matters, please contact a professional knowledgeable in the subject matter of your questions for advice and direction in the context of your personal situation.

Lutz Attorneys.

Wills, Trusts, Probate, Estates, Special Needs, Veterans, Nursing Home Planning