What Estate Planning Documents Do You Need and When Do You Need Them?If you've heard about a Power of Attorney, Power of Attorney for Health Care, or Living Will, you may not know what they are, whether you need them, or how to use them. This article intends to explain what these important estate planning documents are, when you should consider getting them, and how to use them. If you are an Ohio resident and would like to talk about your estate planning needs further or have general estate planning questions, then you can call an attorney at Harris & Engler at (614) 610-9988. The law firm of Harris & Engler is located in Columbus, Ohio, and its attorneys can help you to make sure that you've got a good estate plan in place.
Do I Need a Will?Most everyone knows about a will, but most people do not have one. A will disposes of all of your assets after your death. If you die without a will, then after your death your assets will go through what is called "intestate succession" which is just the default rule in Ohio for how your assets pass to your heirs. If you are married or have children, then you will certainly want to execute a will and meet with an attorney to streamline and make things as easy as possible on your spouse in the event of your death.
If you are not married and/or do not have children, then it is still very important to have a will in place to decide what will happen to your assets after your death. If you die unmarried and without children, then the default intestate laws in Ohio very well might not have your assets going where you would want them to go after your death.
Meeting with an attorney to go over and create your estate plan is not as expensive as many people think and it saves monumental amounts of time and frustration on the back end of managing your affairs after you pass away.
What is a Living Will?A Living Will is an estate planning document where you basically say that if you are incapacitated and in a vegetative state that you are directing your treating physicians to "pull the plug" and allow you to die. This is where you decide, while you are "living", how you want to die in the unfortunate circumstance where you end up in a coma or have a terminal condition. A Living Will is usually in addition to, but can also be incorporated into a Health Care Power of Attorney.
What Is A Health Care Power of Attorney?A Power of Attorney is a document that you sign that gives someone that power to act on your behalf in the same way that you could act for yourself. The power holder, or the person who you elect to act on your behalf if you become unable is called an "attorney-in-fact." Powers of Attorney are further described below, but in general they can grant as limited authority or as broad authority to the attorney-in-fact as you want.
A Health Care Power of Attorney is a limited power of attorney for only health care decisions. This is usually called a "Durable Power of Attorney for Health Care." The "durable" part means that the Power of Attorney lasts through the incapacity of the Principal, or the person signing the document giving away the power. As a practical matter, the person creating the Power of Attorney only wants it to be used if they have been in some way incapacitated and are unable to make decisions for themselves. The principal person signing the Power of Attorney has to be of sound mind and body when they sign the Power of Attorney, so the Power of Attorney has to survive and be "durable" through their incapacity. However, Ohio has somewhat recently changed the law so that all powers of attorney are "durable" unless they say otherwise.
A Health Care Power of Attorney basically gives whoever you select to be your attorney-in-fact the power to make all of your health care decisions for you while you are incapacitated, including giving informed consent to surgeries and other life saving measures. You can also give your attorney-in-fact the power to have your doctors stop life saving measures and allow you to die. You can be as specific as you want in deciding exactly what decisions you want your attorney-in-fact to be able to make. It is important to meet with an estate planning attorney so that you can make sure that your Power of Attorney accurately reflects your wishes and that you truly understand it.
What is a Durable Power of Attorney?While a Health Care Power of Attorney is just for health care decisions, a Durable Power of Attorney is for everything else. In general, with a Durable Power of Attorney, you are giving someone the power to act on your behalf and manage your financial affairs if you are unable. Naturally, you only want to give a Power of Attorney to someone that you truly trust. A Durable Power of Attorney is something that you have to sign while you are still of sound mind and body, and the purpose is to allow someone else to step into your shoes and do whatever you could do. A Power of Attorney can be as limited or as broad as you want. On the broad end, you would give someone the power to do absolutely anything you could do, including sell your house, manage all bank accounts, pay your bills, file lawsuits on your behalf, anything. On the other end, you can make a Power of Attorney as limited as you want. For example, you could give someone a limited Power of Attorney to use your credit card to buy you groceries every week and that's it. It is truly up to the imagination as to what a Power of Attorney can be used for.
Downsides to a Power of AttorneyOne of the downsides to signing a financial Power of Attorney is that it is effective immediately after you sign it. This is why it should only be signed in favor of someone you truly trust because there is a very real opportunity for the attorney-in-fact to abuse their power and drain all of the resources of the principal. There are a few potential ways to mitigate these potential risks.
One way to try to minimize the risk that comes with signing a Power of Attorney is to create a "Springing Power of Attorney." You really only want the Power of Attorney be to used if you become incapacitated. Well, the Springing Power of Attorney only goes into effect once you've become incapacitated. This way it can't be used while you can manage your own affairs. However, one potential drawback to this is that the attorney-in-fact might have to prove that you are incapacitated, which can be a challenge sometimes.
There are additional ways to protect against the potential downsides and risks associated with giving someone a Power of Attorney over all of your financial affairs. You should talk to an estate planning attorney about these additional protective measures. Otherwise, a Durable Power of Attorney is a very useful tool that should absolutely be part of your estate plan.
Should I Purchase My Will or Power of Attorney Online Or Should I Go To An Attorney?There are plenty of online resources and online companies that sell estate planning documents, but should you purchase them? Strangely enough, it is not actually that much more expensive to have an actual attorney prepare all of your estate planning documents than what you would pay to purchase them from an online company. Importantly, in Ohio there are very strict requirements about how a Will and Power of Attorney must be signed in order for them to be valid. This is not something that you want to do yourself, because if done incorrectly, then the Will or Power of Attorney is null and void.
Lastly, whatever increase in cost to go from a do-it-yourself online Will or Power of Attorney to have an attorney prepare it is invaluable because an attorney will sit down with you to see what your actual goals are and will draft your estate planning documents to meet your exact specific goals. An estate planning attorney will also make sure that you understand the documents that you are signing and that you know how to properly use them. Also, an estate planning attorney or law firm will be there for your beneficiaries after you pass away to make sure that your wishes go into effect and that your beneficiaries get what you gave them.