[Sca-cooks] A small OT lecture from Auntie 'Lainie

[Terry Decker]

Most people can actually use four documents.  The Advance Medical Directive
(medical power of attorney), a Durable Power of Attorney, a Last Will and
Testament and a Grantor Trust.  All of these can be assembled from
boilerplate, if you understand the legal and tax implications of the
phrasing, which is time consuming but not particularly difficult.

The Advance Medical Directive states how you want your medical treatment to
be conducted and appoints an agent (attorney-in-fact) to act in your behalf
if you are unable to direct your care.  In most cases, the Advance Medical
Directive will supersede the desires of any family member, but your agent
must have a signed, witnessed, and notarized original copy to present to the
hospital staff before they can act on your behalf.

The Durable Power of Attorney provides for an agent to conduct your
non-medical affairs if you are too incapacitated to do so yourself.

The Will is for disposing of any property not held in the Trust after your
death.  If you don't have a Trust, then all of your property is disposed of
under the Will through probate.  I've been involved in a relatively simple
probate for a year and a half now.  It is a pain.  My Will provides that any
property held in my name is to be inherited by my Trust to be disposed of by
my Successor Trustee.

In some states, probate fees can be a real shock.  IIRC, in California, the
lawyer handling the probate receives a flat 15% of the estate.  Which is a
reason for using a Trust.  Whether or not one has a Trust, be sure to have a
Will.

The Grantor (or Revocable) Trust is a separate legal entity that is an
extension of you.  Anything held in the name of the Trust can be distributed
in accordance with the Trust document (contract) without passing through
probate.  Income and estate taxes do apply.

The primary drawback to a Trust is that trusts are very flexible tools and
even a simple Trust has a lot of options, which can be confusing.  If one
needs help drafting the Trust document, the process can be expensive
(usually $1,000-3,000, but it can go higher).

None of these documents will do any good unless there are properly signed,
witnessed and notarized copies available to the people who need them.  One
also needs to have the financial records, birth certificates, personal
information, deeds, titles, etc. available for the executor or trustee of
the estate.  Acting as the executor of a non-spousal estate, is a real
eye-opener to the complexities of the death and estate process and to the
necessity of estate planning for incapacitation and death.

Bear

>My small lecture is this: force yourself to sit down and think about what
>you would want to happen if you were in an accident, seriously ill, or such
>situation. What do you want to happen? What do you not want to happen? Sit
>down with your family and loved ones and TELL THEM what you want. And then
>put it in writing. It is fairly easy to put together a living will and a
>medical power of attorney. Your doctor's office can tell you where to get
>the papers.
>
>'Lainie