Wills And Related Documents

Wills And Related Documents

A Will is a document that specifically directs how to dispose of your property upon death, and it is the only document that specifically makes a nomination of who will be the Guardian of your children.  Although, just the fact of having a Will cannot prevent your Estate from going into Probate, it will dramatically reduce the costs of litigation should there become a dispute as to your final wishes and your Estate.  Several documents can make up your “Will,” and these consist of the following:

  • Living Will (LW).  This document is part of your Advance Healthcare Directives, and designates a “surrogate” and how decisions should be made for you when you are dying, and they can decide when to “pull the plug” as you direct regarding your palliative care.  Without the LW, the doctors may keep you alive and in pain indefinitely, which potentially is something that is worse than death.  This will also potentially eat up your wealth in useless medical care, which may go against your wishes.  You do not want to put your family in the position of initiating very expensive and complicated (and questionable) Court proceeding in deciding what you would truly want.
  • Last Will and Testament (LWT).  This document is what most people think of when they see a document with a title of “Will.”  This allows you to designate a “Personal Representative” (or “Executor”) who will handle all your affairs at death. Your Will also designates who will serve as the Guardian and Conservator for your children, and who will actually receive your property on death. Your Personal Representative will be responsible to distribute your assets per your wishes.  Without the LWT, the wrong person or persons may be appointed by the court to handle your affairs and property after you die.  In addition, the Court may appoint an inappropriate person to raise your minor children.  Lastly, without the LWT, legal fees, surety bonds and other Probate fees will be much greater.
  • Funeral and Burial Instructions (FBI).  With your specific instructions, a FBI would prevent your next of kin from quarrelling over details of your funeral, burial, or cremation.  It also serves to prevent them from stating that they are “absolutely sure of what you wanted.”  You can state what you absolutely want, per the FBI.
  • Personal Property Disposition List (PPDL).  This is a specific document, in which you specify where, and to whom, you want certain pieces of property to go.  For example, you may specify that all of your watches go to your son, and all of your art goes to your daughter.  You may designate who gets your sports cards and sports memorabilia collection, and who gets certain pieces of household furniture and antiques.  Lastly, it’s also a good idea to have a complete inventory on video of what is in your home in order to avoid any controversy about what was there when you died.

Durable Power Of Attorney And Healthcare Directives

These documents allows a Principal (you) to designate an Agent (somebody you trust implicitly) with who will share decision-making powers.  Many times this is done for the Principal’s benefit if they are going to be out of the country a lot, or if they are frequently so busy that they need a second contact for making important decisions if they are unavailable and an answer is urgently required.  The Agent will have this power as long as you direct, and you can withdraw that Durable Power of Attorney at any point in time.  The reason it is “Durable” is that if you become incapacitated or go missing for some reason, then this Power of Attorney will continue on until you regain your faculties (such as recovering from a stroke), or you become available again.

These documents will allow your Agent to handle your finances. They will be able to pay bills, such as doctor’s bills, attorney fees, they will be able to make purchases, etc.  They will also be able to direct your care and treatment from a financial standpoint with doctors (assuming that you also have a Durable Medical and/or Mental Health Power of Attorney in place).

Your Agent has fiduciary duties to act in your “best interests” and solely for your benefit.  The Agent cannot make a profit or engage in business dealings with your finances in which they make a profit.  They must not co-mingle their assets with your own, and they must keep them separate at all times.  They also are required to have separate recordkeeping, and they are not allowed to gift money or property to others, unless specifically authored in the Power of Attorney document.

Any violation of this Fiduciary Duty could result in a Class 3 Felony Theft charge, a Class 2 Felony Fraudulent Schemes and Artifices charge, or a Class 3 Felony Vulnerable Adult Abuse charge.  In addition to criminal penalties, they could also face civil liability for up to three times the value of the money or property that they improperly wasted.

  • Durable General Power of Attorney (DGPA).  This Document permits you to designate a person to sign legal documents and disbursement checks while you are disabled, missing or away.  Without a DGPA your financial matters and legal affairs will come to a grinding halt.  Deadlines can be missed, and important matters may not be handled during this time period.  It will become necessary for somebody to go to the courthouse in order to Petition for Appointment of a Legal Conservator in order to obtain this power while you are disabled, missing or away.  This can result in the expenditure of a large amount of money on attorney’s fees, doctors, and surety bonds.  It is best to have this in place before the need ever arises … just in case.

Remember: Any Durable Power of Attorney, whether it is for medical reasons, mental health reasons, or financial reasons, will automatically terminate upon your death.

  • Durable Medical Power of Attorney (DMPA).  This Document allows a person you designate to direct to the doctors how to care for you if you are in a hospital, if you are unable to do so yourself.  If you do not have a DMPA, you will have delays in your treatment.  In addition, somebody else will have to go to the local courthouse and file paperwork in order to seek an appointment as a Legal Guardian.  This document accompanies your Living Will, and is something you want to do in advance of becoming incapacitated … just in case.
  • Durable Mental Health Power of Attorney (DMHPA).  This Document will allow your “Designated Agent” to make decisions for your mental healthcare (such as potentially confining you), without the cost and embarrassment of a full Mental Health Hearing.  Without a DMHPA, you will not be able to sign yourself out of a protective institution while still mentally impaired.  This will require your family to use force to capture you and submit you to an expensive Mental Health Hearing, which can involve multiple lawyers, multiple doctors, and a highly emotionally-charged proceeding.  If you’ve made this decision in advance, your Agent will carry out your wishes.
  • HIPAA Authorization.  The HIPPA laws were created to protect the privacy of your healthcare information.  There are specific criminal and civil penalties that apply if somebody is not in compliance with HIPAA.  Doctors and hospitals are very aware of this, and they normally will not release any information unless you have signed the proper HIPAA documents.  Once these Documents have been signed by you, then physicians, medical staff and hospitals will be required to release your health information if you later have to enter a health facility and you are unable to sign the facility’s HIPAA release documents.  It is very important that your loved ones have access to all your medical records if an emergency should arise, and by pre-signing these authorization documents, this just might save your life.

Beware:  Beware of “Joint Accounts” with family members or caregivers.  Many people use this in place of a Durable Power of Attorney, and they also use it in place of a Will as a “Inheritance Tool.”  This is very dangerous because not only can they be taken advantage of by a caregiver (or even a family member), they also run the risk of not having any Asset Protection.  Asset Protection is necessary to protect money and property from creditors or legal judgments.  It will also protect those assets in the case of divorce, tax liens, etc.  It is possible to use other tools besides a Durable Power of Attorney, such as “Pay On Death” Account for inheritance purposes, or a “Beneficiary Deeds” for Asset Protection against creditors, tax liens, etc.  Consult with an Estate Planning Attorney at Cantor Law Group in order to ascertain the best path for your situation.

Personal Representatives And Their Responsibilities

Personal Representatives have a very high standard and Duty of Loyalty which is owed to both the Beneficiary of the Estate, and to the Estate itself.  Some of these duties are as follows:

  • Duty to Avoid Conflicts of Interest:  The Personal Representative can never put their interests above that of the Beneficiary, and they may not unfairly profit from the situation.  Although they are allowed to collect a “reasonable fee” for services rendered, they cannot profit from information learned, or from transactions conducted.
  • Duty of Confidentiality:  The Personal Representative always has a Duty of Loyalty to keep all information regarding the estate Confidential. They cannot reveal this information to anybody, without prior authorization, or without a Court Order.  For example, they cannot write a tell-all book, or reveal information to the media.  This usually arises when they tell one of the Beneficiaries certain information, in which that Beneficiary then uses the information to their advantage over the interests of the other Beneficiaries.
  • Duty of Due Diligence:  Personal Representatives must always exercise Reasonable Care and Due Diligence when dealing with the property of the Estate.  In other words, they must act “Reasonably and Prudently” when dealing with the assets.  If they are simply disposing of the assets below the fair market value in order to speed up their duties, or they are selling the assets to their personal friends at a discount, this would be a violation of that Duty.
  • Duty to Protect and Preserve the Estate’s Assets:  A Personal Representative must always protect and preserve the assets involved.  This may require hiring security, storing items in a safe, having an insurance agent review and place current fair market coverage on the assets, etc.  There is also a Duty to make property “productive” within a reasonable period of time.  This may mean investing the assets in a very low-risk and secure manner, as opposed to investing the assets in a highly speculative venture.  It also may include securing, maintaining, and improving real estate assets before putting them on the market to sell.  If you have further questions regarding the duties of a personal representative, contact us at Cantor Law Group immediately.
  • Duty to Act Promptly with Required Affairs:  This includes filing Tax Returns in a timely manner, and other required documents.  It also includes paying Property Taxes on existing properties so they do not land in default.  This duty to act timely also includes the Duty to Communicate with all of the Beneficiaries with regard to important matter.  Many times problems arise when the Personal Representative is only communicating with one Beneficiary, with the assumption that they are relaying the correct information to the rest of the Beneficiaries.  It is always best for the Personal Representative to involve all beneficiaries in the decision-making process when it comes to the disposal and maintenance of assets.