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Hooper Law Office,LLC Estate Planning Blog

Tuesday, November 20, 2012

What is HIPAA?

 

The Health Insurance Portability and Accountability Act (HIPAA) was passed about fifteen years ago to ensure that people’s health care information remains private.  It prevents health care providers from releasing your private information to unauthorized individuals. However, one unfortunate consequence of this law is that oftentimes loved ones are unable to obtain necessary information when an emergency arises.  A proper estate plan will incorporate a HIPAA-compliant release of information that allows key individuals to speak with health care providers.  There are no requirements regarding who can be named in an authorization and that decision should be made according to your individual circumstances.    


Wednesday, November 14, 2012

What is a financial power of attorney?

 

A power of attorney is a document that authorizes an individual, called the Agent, to act on behalf of another (the Principal).  It can be drafted to give the agent broad discretion or very limited, specific powers.  The major benefit of this document is that it allows the Principal to choose who will act on their behalf in case they become incapacitated, and helps avoid costly guardianship proceedings.  Generally, a power of attorney is either immediately effective or a “springing” power, which becomes effective only upon the incapacity of the Principal.  


Monday, November 5, 2012

What is a Trust?

 

A trust is an agreement that certain property should be managed by one person (the trustee) for the benefit of another (the beneficiary).  There are three basic trust types: revocable, testamentary and irrevocable. 

A revocable trust is often used as the centerpiece of the family’s estate plan.  Upon creating the trust, the Trustmaker(s) place property into the trust, which then protects the trust from the probate process.  Normally with a revocable trust, the Trustmaker is also the trustee and beneficiary of the trust, and retains all the same powers of ownership including changing or terminating the trust.

A testamentary trust is directions for the creation of a trust contained in an individual’s will.  Essentially, the individual is requesting the court during probate to create a trust for certain assets. 

An irrevocable trust is often used to plan for estate taxes or long term care.  It operates with the same general principles as a revocable trust; however, it cannot be changed as readily.  It allows people to retain control over their property while positioning their assets in a manner that prevents medical costs from depleting their life savings.


Monday, October 29, 2012

Choosing a Trustee

 

The trustee is responsible for carrying out the trust instructions, which may provide a great amount of discretion for that individual or entity to make decisions regarding investment and distribution of the trust property.  The trustee also manages the trust’s assets for the benefit of the beneficiaries.  Therefore, selecting the right trustee is a crucial aspect of estate planning.  In most cases when establishing a revocable living trust, it is appropriate for the person making the trust to serve as the initial trustee.  However, when the Trustmaker becomes incapacitated or dies, it is important that the right successor trustee is in place to control the trust.  A discussion of possible successor trustee candidates with your estate planning attorney will help you appoint the appropriate family member, friend or professional trustee.


Monday, October 22, 2012

Three Essential Estate Planning Documents

 

Although there is no “one size fits all” estate plan, certain documents are necessary for every individual.  Whether you choose to plan with a will, a trust, or die intestate (allowing state law to determine the disposition of your assets), you should make certain that you have a valid and current durable power of attorney, healthcare power of attorney, and HIPPA authorization.  These documents ensure that, in the event you become incapacitated, your selected loved ones have authorization to review your healthcare and financial information and make decisions on your behalf.  Without such documents in place, it is likely that your family will have to request a guardianship through the court system, which is an expensive and time-consuming process that may limit their options during a crucial time.


Wednesday, October 10, 2012

What Are The Different Ways to Title Property?

 

Property can be titled in several different ways. The five most common ways are:

 

1.      Fee Simple – ownership exists when there is only one title owner. If you own property that is titled solely in your name you possess total legal control over it. This allows you to do with it whatever you want without anyone else’s permission. You are free to retain, sell or give the property away whenever desired. You also may say who will receive the property after your death. Finally, since only your individual legal rights are involved, any creditor of yours can make a claim against any of your fee simple property to satisfy a debt.

2.      Tenancy in Common – ownership exists when two or more title owners hold the property together as tenants in common. If you own tenancy in common property, you share legal control of it with others.

3.      Joint Tenancy – ownership is like tenancy in common in that two or more joint tenants own the property together and each owner has the right to enjoy its entire use. If you are a joint tenant, you have the right, while alive, to keep, sell or gift your joint tenant’s interest in the property to others.

4.      Tenancy by the Entirety – ownership is a way married couples in some separate property states can title their primary residence to provide creditor protection for a surviving spouse. Following the death of the first spouse, the home titled as tenancy by the entirety automatically passes to the surviving spouse free of probate. This form of ownership may be a good choice of title if either spouse might someday be subject to business or professional liability since the property is protected from creditor claims.

5.      Community Property – ownership is a way married couples in community property states can title their property to reflect that they each own half of the property. Owning property as community property can help couples escape unnecessary capital gains taxes. 


Tuesday, May 8, 2012

What Happens If I Do Not Plan My Estate?

You will leave what is legally known as an “intestate estate”, one in which the deceased has left no instructions. The families of those who fail to plan their estates have a rude surprise awaiting for them – the government will fill in the blanks with its own plan. After debts, probate costs, and taxes are paid, the courts will divide the estate according to the laws of intestate succession.

 

If you do not plan your estate, you may not know who your beneficiaries are.

If you do not plan your estate and a minor child is entitled to receive an inheritance by law, the court will place the inheritance into a custodial trust.

If you do not plan your estate and you have no spouse or children, most states provide that distributions will be made to your parents. If your parents are in a nursing home or receiving government assistance, who do you think gets the inheritance?

If you do not plan your estate and fail to appoint the personal representative you want to administer it, the court will appoint a personal representative of its own choice for you.

If you do not plan your estate, the personal representative may be forced to pay for an expensive bond to insure the estate.

If you do not plan your estate and you and your spouse both die prematurely, the probate court will appoint the guardian it chooses for your minor children instead of the ones you could have, but failed to name yourselves. In other words, a stranger to the family will get to decide who tucks in your children at night and takes care of all of their other needs.

If you do not plan your estate, the courts will maintain continuing jurisdiction over any inheritance left for your children.

 


Thursday, March 29, 2012

What Is A Will?

A will is a written document that tells the court how to divide your property at the time of your death. It also tells the court who should be the guardian for your minor children and your personal representative. Wills are filed with the court at time of death and the court oversees the administration of the will through a process known as probate.


Wednesday, March 14, 2012

What Is Meant by “Estate Planning”

The process of developing a sound estate plan is to achieve the following objectives: controlling your property while you are alive; take care of loved ones and yourself if you become disabled; you want to give what you have to whom you want, when you want and they way you want; whenever possible you want to save tax dollars, professional fees and court costs.

 

Without a good estate plan, you and your family will probably lose control over your property, suffer through unnecessary court proceedings and pay unnecessary taxes and expenses. The lack of an estate plan may also deprive your family of many other legal protections otherwise available and also deprive them of the opportunity to receive from you a lasting legacy designed to bring your family closer together. Fortunately, all of these ills can be easily avoided by implementing a sound estate plan that passes your property to your loved ones in the way you want.

 

All good estate planning starts with making sure that your property is legally owned in an appropriate way.


Wednesday, March 7, 2012

Basic Concepts of Estate Planning

Estate planning, when done correctly, should above all else provide you with the peace of mind that comes from knowing you have done everything possible to protect yourself and your family. It does this by helping you achieve your hopes and accomplish your personal planning goals. Once these individual needs are addressed, good estate planning benefits your family by eliminating unnecessary probate costs, guardianship hearings and death taxes.


Wednesday, February 29, 2012

When Should I Start Planning For Long Term Care?

The first steps should be taken right now. The best approach is to have your care paid by insurance and the sooner you investigate what is offered, the more options you will have and the less it will cost. Long term care insurance is designed to pay some or all of a policy holder’s long term care needs.


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