Estate Planning 101

  • Estate Planning
March 21, 2017

When planning for the future, tackling all of the paperwork and legal aspects can seem like a daunting task. According to a study cited on,less than half of Americans have prepared a will, and that’s only one aspect of an estate plan. Staying on top of planning documents does more than just ensure your own preferences, it can also help your family. Having properly updated estate planning documents in place to specify your preferences can save your family undue emotional distress and confusion when the time comes.

To update or complete your estate plan, review these essential documents:

1. Durable Power of Attorney

One of the most important aspects of your estate planning paperwork is the durable power of attorney. There are two different types of power of attorney, medical and financial. Through durable power of attorney you have the power to appoint someone, a family member or someone close to you, the power to oversee your financial and legal matters and medical care. The person or persons you appoint are typically referred to as “agents,” and will be given the authority to speak for you when you are too ill or otherwise unable to do so. This person can also oversee your financial matters, paying bills and ensuring your financial security until you recover. It is also advisable to appoint alternates in case the first agent is for any reason unable to fulfill his or her duties.

You must be of a sound mind to write a durable power of attorney. For example, someone in the advanced stages of Alzheimer’s disease may not be considered “of sound mind” and therefore would not be able to appoint an agent themselves.

2. Health Care Proxy

The health care proxy is essentially the medical power of attorney mentioned above. The agent appointed is given full authority to make medical decisions for you in the event you are unable to do so yourself. This usually occurs in the case of severe illness, dementia or an unforeseen accident, whether the incapacity is temporary or permanent. To avoid possible disputes, it is strongly suggested that only one agent be granted your health care proxy, with alternate agents specified.

You may also wish to leave health care directives, or documents expressing your wishes in the case of a sudden accident or illness. These documents may express where you would prefer to receive your health care, instructions about artificial nutrition or simulated breathing, donation of organs and tissues, funeral arrangements, etc. Discussing your preferences with your agent, as well as preparing health care directives, will better prepare him or her if / when they must step in for you.

3. HIPAA Release

Similar to the health care proxy, the HIPAA is a privacy authorization form that releases your protected health information. This is especially important in cases of emergency. If you were, for example, in an accident and your family came to see you in the hospital, the doctors and staff would be legally unable to release your confidential health information to anyone previously unauthorized. To prevent this situation from happening, you must sign a HIPAA release.

On the HIPAA, you may specify what information you allow each person access to, and the time period they are allowed this access. The time period may be “always” or it can be more limited, per your preference.

You may find the HIPAA and health care proxy redundant, but they each have their own advantages. The health care proxy is “springing,” meaning it is only effectual when the patient is declared incapacitated. Also, whereas the health care proxy gives authority to a single person, the HIPAA can be filled out for as many people as you wish, allowing your family and trusted friends to communicate about your health with your doctors.

4. The Will

To start, you should appoint an executor, or personal representative, in your will to be responsible for carrying out your wishes. A will essentially divides your assets and declares who will receive what. The document should specify who will receive your property and your possessions, and any stipulations you may have. The will also states who will be named the guardian of your children in the event something happens to you and the children’s other parent. In your will you may also designate any charitable donations or specific bequests.

5. Revocable Trust

Also called a living trust, a revocable trust can save time and money for your survivors by preventing them from going through probate court. Probate is the legal process by which the court oversees your debts and assets after your death, ensuring they are distributed according to law. Probate is costly, time-consuming, oftentimes seen as an invasion of privacy, and therefore undesirable.

Similarly to a will, a revocable trust specifies what will happen to your assets when you die, but the trust can name a successor trustee. For example, naming your spouse as a successor trustee will allow them instant control (handling financial affairs and paying bills) if you are otherwise unable to act for yourself. If you recover, you can resume control. The trust, as demonstrated, is effectual before death, whereas the will is only effectual after death.

A trust can be handy for children of elderly parents, especially those with dementia, who need help monitoring their financial matters. The trust can authorize the trustee, in this case the adult child, to have a hand in financial matters. This can help better protect the parent without taking away the parent’s authority.

By understanding the most important aspects of managing your estate documents, you ensure you and your family will be better taken care of. Always remember to update documents as your situation changes and your life takes new turns (second home purchase, grandchildren, etc.). Estate planning documents are more than just planning for your future, they ensure that, in any given situation, your family and loved ones remain safely provided for.

Contact Jorgensen, Brownell & Pepin, P.C. today for help with your essential documents from our experienced Longmont estate planning attorneys.

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