There are a myriad of legal strategies you might consider implementing as you design your estate plan. Regardless, there are a handful of "must have" estate planning documents you must create before anything else.
You should have: (i) a will – everyone needs a will; (ii) health care directives, including a Health Care Power of Attorney and Living Will for decisions concerning treatment when you cannot make or communicate your own wishes; (iii) financial and health care powers of attorney authorizing "agents" you know and trust to take care of your financial matters and make your health care decisions when you are unable to do so yourself; (iv) a legal authorization that allows a loved one or friend to access your medical information; and (v) a trust (based on your situation) to manage, protect and eventually distribute your assets.
Will. A will is a legal document that describes your intentions for your estate when you pass away. Without a will, a person would die "intestate." In that case, state law divides and distributes the estate to surviving family members based on their relationship to the deceased. No consideration is given under state law to how "close" such family members were to the decedent (or if they fought constantly). Contrary to popular belief, a will has absolutely no legal authority until the maker of the will dies … and the will is given to the proper probate court within the time limit prescribed by state law. Accordingly, your will has no authority to appoint financial or health care decision-makers (agents) for you if incapacitated by an illness or injury (more on that later). In many states, a will is required to appoint the guardians (backup parents) in the event minor children are orphaned. What could be more important than appointing the people you want to rear your children if you are not around?
Health Care Power of Attorney. The Health Care Power of Attorney gives your named agent the power to make medical decisions, sign consents and/or releases with hospitals and/or doctors, if you for any reason are unable to make medical treatment decisions on your own behalf. This might be used in wide range of situations, such as if you are unconscious from an accident and can’t make decisions for yourself, to a more extreme situation such as permanent unconsciousness.
The Health Care Power of Attorney authorizes your agents to make decisions regarding the administration of life-support procedures. If you are terminally ill and death is imminent or if you are permanently unconscious, your agents may decide not to administer basic means of life support, such as a respirator that otherwise would keep you breathing. If you are terminally ill, your agents may decide not to administer artificially provided food and water, such as a feeding tube or an I-V. If you are permanently unconscious and would like your agents to be able to decide whether or not to administer artificially provided food and water, you must initial that section in the Health Care Power of Attorney document.
Living Will Declaration. The Living Will Declaration states your intentions regarding life support, including artificially provided food and water, if you are terminally ill and death is imminent and if you are permanently unconscious. Unlike your Health Care Power of Attorney, in which another person is authorized to make medical decisions for you in a variety of situations, the Living Will Declaration applies only in extreme situations mentioned above.
The Living Will Declaration speaks directly to your physician, rather than leaving treatment decisions regarding life-support to your agents. Under Ohio law, a Living Will Declaration overrides any decisions made by your health care agents.
The Living Will Declaration also gives you an opportunity to negate whether you wish to become an organ-tissue donor at your death.
How does a health care directive help my family?
A health care directive appoints the persons (whether in order of priority or as a "team") you have selected to make end-of-life decisions, so your family and the medical staff know what to do (or what not to do). A directive can take some of the worry and anxiety out of your final days for your family, as they will know your wishes when it comes to making tough choices. With that in mind, choose your "point persons" carefully. They will be charged with carrying out some potentially difficult decision and, perhaps, difficult family members.
Power of Attorney. This is a legal document giving another person — sometimes called "the attorney-in-fact" or "agent" — the legal authority to make decisions on business matters and other issues on your behalf. The exact scope of the power given is spelled out in the document itself. These powers cease when the maker passes away; they also may no longer be in effect when the maker becomes unable to make or communicate decisions. A "durable" power of attorney should be used in that situation, or a health care directive.
Permission to Access Personal Medical Information. This document should be right on top of or specifically incorporated within your health care directive. It is your authorization for named persons to view your medical records and discuss your care with medical providers. Without this document or specific authorization, there is the possibility your doctor may decide not to speak to your designated "point persons" — the persons you want to make those tough decisions about your care if you are in an unresponsive state.
Trusts. These come in all sorts of shapes and sizes. Generally speaking, a trust is a legal entity with at least three parties: the creator of the trust, the trustee, and the beneficiary. With most "revocable living trusts," you are all three parties. Depending on your circumstances, there could be advantages to establishing a trust. The most common advantage is avoiding probate. This can help streamline administration of your estate should you become incapacitated and upon your death, keeping your plans private in the process. Some irrevocable trusts may protect trust assets from creditors. For example, trusts established under a will or revocable living trust can protect the inheritance for loved ones from squandering, divorces, lawsuits and bankruptcies.
It depends on a great many factors. Consult David H. Lefton, Attorney at Law to thoroughly review your situation and your objectives.