FOUNDATIONAL LEGAL DOCUMENTSRYAN A. WEBBER, ESQUIRE

WHAT ARE THE FOUNDATIONAL LEGAL DOCUMENTS?

Financial POA

Health Care POA

Living Will

Last Will and Testament

WHO NEEDS AN ESTATE PLAN?

• EVERYONE!• Especially Important for Individuals with Small

Children, Businesses, Disabled Beneficiaries, Desire for Charitable Giving

Estate Planning Team

Attorney Accountant Financial Advisor

ESTATE PLANNING INTRODUCTION

• Purpose of Planning – While living• Provide for management of assets in

the event of disability• Provide instructions for health care

decisions• Protect assets for long term care

• Purpose of Planning – At Death• Determine who gets what assets and how

such distributions are made after you pass away

• Maximize Estate by reducing expenses and avoid delays

• Reduce conflict between family members and provide for a smooth transition of assets

• Minimize death taxes

• Provide liquidity – cover funeral costs

FINANCIAL POAWHO HANDLES YOUR STUFF WHEN YOU CANNOT HANDLE IT YOURSELF

FINANCIAL POWER OF ATTORNEY

• Principal – Person creating the power ofattorney

• Agent – Person appointed by the Principal toact on the Principal’s behalf with regard tofinances and legal affairs

• Durable – Power of Attorney is effective uponexecution; no need for incapacity (POAspresumed durable if not specified)

• Springing – Power of Attorney is effective(springs into action) upon a specific event(usually incapacity)

• Gifting – Giving the Principal's assets orproperty to another without the Principalreceiving anything in return

Key Terms

FINANCIAL POA: CONSIDERATIONS WHEN CHOOSING AN AGENT

• Do you trust the person?

• Is there a conflict of interest?

• Is the person financially responsible?

• What is their fee? If any

• Will the person agree to serve as agent?

• What is the person’s age?

• Should I name more than one person?

• What if they can’t agree?

• What if I have no one?

• Institutional agent

• What if the person lives far away?

FINANCIAL POA:EXECUTION• Signed by the Principal, by mark, or by another at the direction of the Principal

• Must be in writing

• Dated

• 2 witnesses

• Notarized

• Must have proper Notice

• Must be acknowledged by Agent

FINANCIAL POA: POWERS THAT REQUIRE SPECIFIC AUTHORITY

Create, amend,

revoke, or terminate an inter

vivos trust

Make a gift Create or change

rights of survivorship

Create or change

beneficiary designations

Delegate authority granted

under the POA

Waive the Principal’s

right to be a beneficiary of a joint

and survivor annuity

Exercise fiduciary powers of

the Principal

Disclaim property

NOTE: Consider the

long-term care implications of

disclaiming

FINANCIAL POA: DUTIES OF AGENT

NONWAIVABLE

• Act in Accordance with Principal’s reasonable expectation to the extent known, and otherwise, in the Principal’s best interests

• Act in good faith

• Act only within scope of authority

WAIVABLE

• Act loyally for Principal’s benefit

• Keep funds separate from Principal’s unless: 1) funds weren’t separate; or 2) agent is spouse;

• Act so not to create a conflict of interest within Principal

• Act with care, competence and diligence

• Keep records of all receipts, disbursements and transactions

• Cooperate with Health Care Agent

• Preserve the Principal’s estate plan

FINANCIAL POA

ADVANTAGES

• Someone can handle finances when you are unable

• Control what powers your agent has

• Relatively easy and inexpensive to create

• No need for costly court proceeding or continued oversight

DISADVANTAGES

• Ends at death (not a substitute for a Will)

• No oversight (power can be abused)

• Lack of recognition by financial institutions

• If multiple agents named, they can disagree

ADVANCE DIRECTIVEHEALTH CARE POWER OF ATTORNEY / LIVING WILL

ADVANCE DIRECTIVE

A written statement of your wishes, preferences, and choices regarding end-of-life health care decisions

Non durableOnly effective if you are unable to speak for yourself

Advance Directives typically include:

Health Care Power of AttorneyLiving Will

Consider Terry Schiavo case

HEALTH CARE POA - EXECUTION

• Principal must be:

• 18 or older

• Graduate from high school;

• Married; or

• Emancipated minor

• Health Care POA shall:

• Identify the Principal and appoint an Agent

• Declare the Principal authorizes the agent to make health care decisions on behalf of the Principal

• Execution Requirements:

• Dated

• Signed by Principal, mark, or by another individual at the direction of the Principal

• Witnessed by 2 individuals

• 18 or older

• Cannot be a health care provider

HEALTH CARE POA

• Agent is only authorized to speak for you if you are unable to speak for yourself

• As long as the Principal is competent, the Principal will make their own decisions

• Agent may have access to medical records and HIPAA Authorization prior to your incapacity

When Effective

HEALTH CARE POA: AGENT’S POWERS

• Appoint an Agent to speak on Principal’s behalf

• Will speak only if Principal becomes incapacitated due to injury or illness

• Can make treatment decisions, decisions related to medical facilities, organ donation, autopsy, and what to do with your remains

• Has access to medical records right away

• HIPAA Authority

HEALTH CARE POA: OPTIONAL PROVISIONS

Describe any limitations imposed on

the authority of the Health Care Agent;

Indicate preference for initiation, continuation,

withholding or withdrawal of life

sustaining treatment

Right to consent or refuse to consent to medical treatment or

organ donation

Right to employ or discharge medical

providers

Right to direct disposition of remains

LIVING WILL: PURPOSE

State Principal’s wishes regarding the use or removal of life-prolonging procedures if Principal lacks the capacity

to make or communicate health care decisions

Tool to help you think through and communicate

your choices

Allows you to request to pass away naturally utilizing only

comfort measures

LIVING WILL: EXECUTION

• Dated

• Signed by Principal or signed by another at Principal’s direction

• Witnessed by two individuals

• Must be 18 or older

• May not be a provider

LIVING WILL: WHO MAY MAKE

• Any individual of sound mind may make a Living Will who meets following conditions:

• 18 years of age;

• Graduate of high school;

• Married; or

• Emancipated minor

LIVING WILL: WHEN EFFECTIVE

Advanced dementia may trigger a Living WillWho makes the determination?

When the Principal is: 1) permanently

unconscious; or 2) terminally ill

Life sustaining treatment will be given during a pregnancy unless:• Will not maintain the pregnant woman in such a way to permit continuing development and live birth of unborn child• Will be physically harmful to pregnant woman; or• Will cause pain to the pregnant woman that cannot be alleviated by medication

Limitation: Pregnancy

Spouse of Principal cannot make end of life decisions if divorce action filedDivorce

LIVING WILL: END OF LIFE DECISION MAKING

Life Sustaining Treatment

Artificial Nutrition and Hydration (tube feeding)

Cardiopulmonary Resuscitation (CPR)

Do-Not-Resuscitate Order (DNR)

Palliative Care

Hospice Organ Donation

Including donation of vascularized composite allografts (limbs)

Consider life support decision and whether it is consistent with organ donation goals

ADVANCE DIRECTIVE

ADVANTAGES

• You are in charge of your own decisions

• Documents can be changed anytime if you have capacity

• Documents can help you express wishes

DISADVANTAGES

• May not be available when needed

• Not readily available in patient’s charts

• Living Will: may not be specific enough, may be overridden, does not immediately translate into medical order

• Consider POLST

LAST WILL AND TESTAMENTWHO GETS YOUR STUFF WHEN YOU PASS AWAY

LAST WILL AND TESTAMENT

KEY TERMS

• Decedent – person who has passed away

• Testator/Testatrix – individual creating Will

• Executor/Executrix/Personal Representative –person/entity in charge of your probate Estate

• Beneficiaries – person(s) receiving your Estate

• Probate Property – property in the name of the Decedent’s name alone without a beneficiary designation

The Instrument that Directs How Your Assets are Distributed and Your Debts, Taxes, and Expenses

are Paid After Your Death

LAST WILL AND TESTAMENT

WHO MAY MAKE• Any person 18 or over who is of sound mind

• Capacity – understand the nature of the document, the property he owns, the persons that have a natural claim to estate, and manner assets should be divided

• Must be free from undue influence• Influence from someone with a special relationship

to testator that prevents the testator from exercising independent judgment

FORM AND EXECUTION• Must be in writing

• Signed at the end by the Testator

• May be signed by mark or another person at the direction of Testator

• No Witness Requirement• Good practice to have witnesses

• No Notary Requirement• Good practice to have notarized

ASSETS NOT SUBJECT TO YOUR WILL

Joint property with right of survivorship

Tenants by the Entirety Property

Assets with a beneficiary designation

Perils of naming your “estate” as beneficiary of an asset

Important to keep beneficiary designations up to date with estate

plan

Be consistently inconsistent - If non-probate assets have different

beneficiary designations than your Will, make sure this is intentional

Assets owned by a Trust

LAST WILL AND TESTAMENT: THINGS TO CONSIDER

Any beneficiaries with special circumstances

Divorce

Special Needs

Bankruptcy

Long Term Care Issues

Spending Issues

Who is your Personal Representative?

Same considerations as financial POA

Do I need a Guardian for Minor Children?

LAST WILL AND TESTAMENT: DISTRIBUTION OF ASSETS

Taxes and debts paid before beneficiaries

Pennsylvania Inheritance Taxes

Concept of Fairness

Fair doesn’t always mean equal

Equal doesn’t always mean fair

Specific Distributions

Must get paid before residuary estate

Acknowledge Consistency or Inconsistency with non-probate property

Must I include a beneficiary?

In Terroram Clause

IMPROPER ESTATE PLANNING

• Court Determines Beneficiaries

• Intestacy Laws Govern (Spouse does not always get entire estate)

• Unintended Distributions

• Family Conflict

• Court Determines Executor

• Court Determines Child Placement and Care

• Delay in Distributions

• Allocation of Assets to Minimize Taxes not Guaranteed

• Cost of Guardianship

• Prolong Life Past Desire of Individual

• Medical Care Costs Deplete Assets

• Lack of Charitable Giving

OTHER DOCUMENTS IN AN ESTATE PLAN

LIFE INSURANCE INTER-VIVOS TRUST

SPECIAL NEEDS TRUST

LONG TERM CARE

INSURANCE

DISABILITY INSURANCE

ANNUITIES

QUESTIONS?RYAN@WALTERSGALLOWAY.COM

(717) 697-4700