The following list answers several of the most commonly asked estate planning questions.
Q: What is a Power of Attorney?
A: A Financial Power of Attorney gives an individual the right to make your financial decisions for you. A Healthcare Power of Attorney gives an individual the right to make your healthcare decisions for you when you are no longer able to make your own healthcare decisions.
Q: What is the worst case scenario if I do not have a Power of Attorney?
A: Your family would have to petition the probate court to get a guardianship and/or conservatorship, so that they could take care of your medical and/or financial situation. This costs money, takes time, often includes attorney’s fees, and is stressful for the family.
Q: Is there a difference between a “Healthcare Power of Attorney”, “Appointment of Patient Advocate”, “Healthcare Proxy”, “Advanced Directive”, “Living Will”, and “5 Wishes”?
A: People use these terms interchangeably to refer to basically the same thing. There are technical differences between them, but the average person does not need to know what these are.
Q: Do I really need a will? What happens if I die without a will? Will the state get all of my money?
A: A will gives everybody peace of mind, states exactly how you would like your assets to be distributed after you die, names whom you would like to be guardian and conservator of your minor children, and names who you would like to take care of your estate. If you die without a will, your assets will still pass to your family members. The state only receives a filing fee (currently $160) and an inventory fee based on the size of the estate.
Q: What is probate? Why does everyone fear probate? Should I be worried about probate?
A: “Probate” refers to the process of distributing your assets after you pass away. It is done through the county probate court. Your family can either hire an attorney to help with the process, or they can do it themselves. The probate process used to be very complex and expensive. Now probate is easier and less expensive, although there are still fees involved with filing, inventory, and, in most cases, attorney fees. Probate is also time-consuming and public record. Most people still prefer to avoid probate.
Q: If I have a will, does my family still have to go through probate?
Q: What is a “Revocable Living Trust”? Does it avoid probate?
A: A Revocable Living Trust is similar to a will. It directs how you would like your assets to pass after death. It will avoid probate, but only if you properly retitle your assets into the trust. A Revocable Living Trust does not become public record, and distribution of trust assets is usually much quicker than probate. Most people who have dealt with trusts far prefer them to probating a will.
Q: I don’t think I can afford to hire an attorney to draft these documents. How much does it cost? Can I just print forms off the internet?
A: Wills and Powers of Attorney are usually affordable; many attorneys charge as little as $200 for each document. A trust is more expensive, usually closer to $2,000. Free internet forms often leave out necessary provisions.
Q: My mother has early stage Dementia. Most of the time she knows what is going on, but her mind is starting to slip. Can she still sign a will or a power of attorney or another legal document? What does an attorney look for in deciding that?
A. There is no strict procedure in place for what every attorney must do to determine competency or mental capacity. Generally, an attorney will determine if the person knows who their family members are, how much money or assets the person has, and whether the person understands what the document says and what effect it will have.