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Guarding Your Wealth for Seniors
Clearing Up Estate Document Confusion
Living Will, Living Trust, Powers of Attorney...
By Jeffrey D. Voudrie, CFP
Oct. 14, 2005 - Few topics confuse investors more
than figuring out what estate-related documents they need. Living Wills,
Living Trusts, and Powers of Attorney are just a few of the terms that
most find hard to define, let alone understand. But being comfortable
with these terms and what each one can do for you is important, and can
make the difference between your wishes being followed or creating a
nightmare.
A Living Will is a document that is designed to
convey your end-of-life wishes regarding medical care. Many people have
strong feelings about being kept alive by machines and feeding tubes.
The Living Will allows you to express your will concerning your
end-of-life preferences. Please note that the Living Will doesnt give
any other person the right to make medical decisions on your behalf.
A Living Trust, on the other hand, has nothing to
do with end-of-life medical decisions. A Living Trust is a vehicle that
controls the management of your assets while you are alive and how they
are distributed after your death. Plus, the assets owned by the Living
Trust dont have to go through probate before they are transferred to
your heirs. (Go to
www.guardingyourwealth.com for more articles on Living Trusts.)
So how should a Living Will and a Living Trust
apply to you? Every adult should have a Living Will, regardless of age.
A great deal of stress and potential conflict is removed from your loved
ones when you clearly state your end-of-life wishes. But not every adult
needs a Living Trust.
For those with very simple estates consisting of a
home and a few other accounts, proper account registration and
transfer-on-death provisions can solve most estate problems. But if you
have out-of-state property, are remarried, have children with special
needs, or otherwise wish to simplify the settling of your estate for
your those you leave behind, then a Living Trust is something you should
look into.
Another very confusing topic concerns Powers of
Attorney. Here is a simple way to understand how they work in general.
An attorney is someone who acts on your behalf. A Power of Attorney,
then, is just a way for you to legally name who you want to act in your
behalf. You determine when that person can act on your behalf. They can
do so immediately, only if you should become incapacitated, or both now
and during incapacity. A Power of Attorney is only in force while you
are alive.
For most estate planning purposes, you need two
important Powers of Attorney. The first is a Medical Power of Attorney.
This allows you to choose who will make your medical decisions should
you become incapacitated. Only your spouse has this authority without
such a document. But what if something happens to your spouse, or youre
single? This document can relieve a lot of headaches in these
situations.
The second Power of Attorney you need is a Durable
Power of Attorney for Assets. Not even your spouse can make financial
decisions for you if youre incapacitated. This important document lets
you predetermine who can manage your assets when you are no longer able
to do so yourself. Without this document, should you develop dementia or
end up in a coma, someone would have to petition the court to be
appointed your guardian. This process is expensive, extremely stressful
and completely unnecessary, if you have a Durable Power of Attorney for
Assets in place.
Its important to remember that these Powers of
Attorney can be worded so they only become active should you become
incapacitated. While youre competent, you regain complete control.
So every adult should at least have a Living Will,
a Medical Power of Attorney and a Durable Power of Attorney for Assets.
Many times you can get the forms for a Living Will and even a Medical
Power of Attorney free of charge at your local hospital. All you have to
do is fill out the form and sign it in front of two witnesses. In some
states you may have to have it notarized.
A Durable Power of Attorney for Assets should only
cost around $100 and can be done by any attorney. There are even kits
available online for those do-it-yourselfers.
If you have a specific question or would like more
information give me a call toll-free at 1-877-827-1463 or go to
www.guardingyourwealth.com. You can also reach me by email at
jeff@guardingyourwealth.com.
About Guarding Your Wealth:
Guarding Your Wealth is a
nationally syndicated weekly personal finance column written by Jeffrey
D. Voudrie, CFP. Mr. Voudrie is the President of Legacy Planning Group,
a private wealth management firm that employs sophisticated proprietary
strategies designed to protect and grow its clients' investments. Please
visit his website,
www.guardingyourwealth.com to read past articles under the Guarding
Your Wealth Article Archive.
In addition to being a nationally
syndicated columnist and Certified Financial Planning Practitioner, Mr.
Voudrie provides personal, private money management services to clients
nationwide.
Looking for an energetic expert who
is passionate about financial and wealth management? Mr. Voudrie is an
excellent speaker who will excite and inspire your audience. Mr. Voudrie
is available for a limited number of speaking engagements, television
appearances and radio talk shows. For booking information, email e-mail
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