Q: What is a Last Will & Testament?
A: A Will is a written document that directs the distribution of your property, both real and personal, at death to your intended beneficiaries. Wills can also address the following: 1) specific gifts to family members, non-family members, and charities; 2) who will serve as the Personal Representative of your Estate after your death and probate your Will; 3) who will care for your minor children upon your death; and 4) establish a Testamentary Trust for the benefit of your beneficiaries under your Will. Each state has its own legal requirements for legal Wills, but generally, the Will must be witnessed by two (2) individuals.
Q: Do I need a Will?
A: Yes. Nearly every individual should have a Will to assure that their property passes to the desired beneficiaries upon their death.
Q: What happens if I don’t have a Will?
A: If you pass away without a Will, each state has its own laws regarding the disposition of your Estate. Those laws may state that your Estate passes all to your spouse, or children, or parents, or siblings, or cousins. If a decedent passes away with absolutely no living blood-relations, than his or her Estate may pass to the State in which the decedent lived at the time of death.
Q: Is a Will and Living Will the same thing?
A: No. A Will or Last Will & Testament addressed the distribution of your personal property upon your death. A Living Will or Declaration Relating to Use of Life-Sustaining Treatment addresses if you suffer from an incurable, irreversible and terminable condition that results in your permanent unconsciousness and your need to be connected to life sustaining machines (such as artificial respiration and ventilation). Under a Living Will, should you be in such a medical condition, your Living Will states that you are not to be connected to the mechanical and artificial life-sustaining machines.
Q: What is a General Power of Attorney?
A: A General Power of Attorney is a written document wherein you appoint an “Attorney in Fact” to address business and personal decisions in the event that you are unable to. A General Power of Attorney can include the ability to buy and sell property, access safety deposit boxes, pay bills, file tax returns, bring a lawsuit, employ professionals, and vote corporate stock. A General Power of Attorney can be effective immediately upon signing or upon written certification from a physician that you are disabled and unable to make such decisions. A General Power of Attorney is only valid during your life and is immediately revoked upon your death; therefore, an Attorney-in-Fact cannot use the Power of Attorney to make after-death decisions.
Q: What is a Medical Power of Attorney?
A: A Medical Power of Attorney or Durable Power of Attorney for Health Care Decisions is a written document wherein you appoint an “Attorney in Fact” to make health care decisions for you, if you are unable, in the judgment of the attending physician, to make health care decisions.
Q: What are Revocable Trusts and Irrevocable Trusts?
A: A Trust is a written document executed during your life which is intended to dispose of your personal property and real property during your life or upon your death. With either type of Trust, you will generally be required to change the title of all of your real and personal property from your name to the name of the Trust. If you set up a “Revocable Trust” you have the right to change your mind and remove the assets from the Trust back into your name. If you set up a “Irrevocable Trust” you cannot change your mind and remove the assets from the Trust back into your name. There are many reasons for setting up either type of Trust, including, tax savings, avoidance of probate of your Will in Court upon your death, and creating a long term estate plan for the passing of your legacy to children, grandchildren, great-grandchildren, and beyond.
Q: What is a Miller Trust?
A: A Medical Assistance Income Trust (“Miller Trust”) is used by an individual who applying for state Medicaid assistance, but has income greater than that allowed by Medicaid rules. The Trust receives all of the applicants current income, and from that Trust, certain distributions can be made, such as, a reasonable monthly allowance to the applicant, payment of certain qualified expenses, with the balance of that month’s income being paid to the applicant’s health care provider. The State is also the beneficiary of the Trust upon your death, so any remaining funds in the Trust at your death would pass to the State.
Q: What is a Supplemental or Special Needs Trust?
A: Generally, this type of Trust is used to provide extra and supplemental monies to a disabled individual. The Trust can be set up by a third-party, such as a parent in their Last Will & Testament, wherein they leave monies to a disabled child for supplemental needs of the disabled child. The Trust allows the disabled child to continue to receive any available government assistance, and the Trust only pays for such things that are not covered by government assistance. The Trust can also be set up the disabled child in certain situations, such as the disabled child receives monies from a personal injury case. The main difference between the Trust set up by the Third Party or the Trust set up by the disabled child is who the beneficiary of the Trust will be upon the death of the disabled individual. If it is a third party trust, generally any beneficiary can be named. If it is a trust set up by the disabled child, the State must be the beneficiary of the Trust. Due to the ever change laws in the area of Medicaid, it is essential to consult a lawyer prior to establishing either type of trust. Improper drafting can result in the disabled child losing their government assistance.