These days, lots of people are all about DYI – from home improvement to income tax return preparation.  While self-sufficiency is an admirable trait, there are some tasks that are best left to professionals, such as oral surgery, and in my house, plumbing.  Even though there are many do-it- yourself Will-form companies out there, estate planning is a process best left to professionals. Here are five  questions to test your estate planning knowledge before you decide to take on the design and creation of your own estate plan.

QUESTIONS

1. True or False. A Durable Power of Attorney remains in effect for three months following the death of the principal.
2. True or False. Spouses have the legal right to obtain medical information about each other.
3. True or False. You can’t legally disown a child so it is a good idea to leave your child at least $1.00 in your Will.
4. True or False. A Trust is only appropriate for individuals who have more than $500,000.
5. True or False. Probate is not necessary if you have a Will.

ANSWERS

1. False. When the principal, or maker, of a Durable Power of Attorney dies, his or her Power of Attorney becomes invalid and the person designated as the attorney-in-fact no longer has any legal authority to access the principal’s bank accounts or other assets.
2. False. A spouse does not have an automatic right to obtain medical information just because of his or her status as a spouse.  In fact, there is a federal law, the Health Insurance Portability and Accountability Act (HIPAA), that prohibits a medical provider from sharing information about a patient with anyone else without the patient’s permission, and that includes a spouse.

Every competent adult in this country has the legal right to designate a person to make medical decisions if unable to do so.  In Massachusetts,  the document used to do this is called a Massachusetts Health Care Proxy. You may also grant family members, or others, authority to speak with your medical providers and obtain information about your medical situation by signing a HIPAA Authorization form listing the individuals to whom you grant that permission.

3. False (for the most part). As a general rule, a parent has no legal obligation to leave an inheritance, not even $1.00, to an adult child. Regardless of whether or not you intend to disinherit a child, it is a good idea to identify all of your children in your estate plan documents and to state your intention to disinherit a child.   The reason for that is the law will grant rights of inheritance to a child who is omitted because of mistake or inadvertence.  The classic case is where the parent believes a child is deceased but the child is found to be alive after the death of the parent.
4. False. While the value of an estate is one factor to consider when deciding whether or not to create a trust as part of an estate plan, it is not the only consideration.  For example, if you have minor children, a beneficiary who is a person with disabilities, a beneficiary who receives, or may receive, needs-based public benefits, children from a prior marriage, beneficiaries with creditor troubles or are in a shaky marriage, or have beneficiaries whose money-management skills are weak, a trust is an excellent vehicle to protect assets and provide management oversight.
5. False. Whether or not an asset needs to be probated is solely a function of how that asset is owned by the deceased.   For example, if I have a bank account in my name alone when I die, the bank will not simply give the money to my husband or my children.  The Personal Representative (formerly called Executor) of my estate is the only person who has the authority to access the funds in the account.  Further, it is not sufficient for the person who I have named as my Personal Representative in my Will to show up at the bank with my Will in hand and demand access to my account.  My Personal Representative must file for probate and obtain Letters of Authority from the court, which will prove that he has the authority to access the account.

If you have answered all of the questions correctly, does that mean I recommend that you create your own estate plan? Of course not!  Everyone’s situation is different and in my experience, each person’s situation has its own unique “twists” which are usually not adequately addressed by so-called “canned” estate plan documents.

One last question – True or False:  If you want to make sure that your wishes are carried out, that your family is cared for, and that your chosen designees are making  decisions on your behalf, you should engage the services of an experienced estate planning attorney.  True!

December 2014