What You Need to Know About Estate Planning

We believe that a properly drafted estate plan prepares and protects your family both in the event of your disability or your death. At Simmons & Schiavo, even the most basic estate planning package includes these five documents: (1) a Will, (2) Durable Power of Attorney, (3) Health Care Proxy, (4) an Advanced Health Care Directive, and (5) HIPPA Authorization. Depending on your situation it’s likely that you will need other documents, but for simplicity we’ll stick to an explanation of these core documents.

A Will is the foundation of your estate plan since it is used to state your final wishes. In addition to naming your beneficiaries, a Will can be used to name your personal representative (the person who carries out your wishes), name guardians and conservators (if you have minor children), and instruct the priority of your distributions to determine which assets will be used to settle debts or pay taxes.

A Power of Attorney and Health Care Proxy tend to go hand in hand. The Durable Power of Attorney (POA) is generally used to determine who will be responsible for managing your property and personal finances if you are unable to do so for any reason including incapacity. POA’s can be modified to come into effect before incapacity, after incapacity, or regardless of your capacity. While POA’s handle your financial affairs, a Health Care Proxy (HCP) is used to designate someone to handle your medical affairs. Given the different purposes of each document and varying family dynamics, it is common for a person to split the responsibilities between family members by naming one as the POA and another as the HCP. It is also important to note that the powers or responsibilities you give to your Attorney-in-fact or Agent can be limited depending on your needs and comfort level.

The next important document is the Advanced Health Care Directive or Living Will. Unlike the HCP, the Living Will is designed to anticipate specific medical events and instruct how you would like to be treated in such circumstances. For example, your Living Will may determine whether you wish to be removed from life support.

The last document, the HIPAA Authorization, gives your Agent the ability to communicate with your health care provider, insurance company, or other medical personnel regarding your health. For example, you may want your Agent to contact your doctor’s office about a bill or discuss your medical condition if you are hospitalized. Given the penalties for failing to comply with HIPAA, some medical professionals may err on the side of caution and refuse to share your information with your Agent until they see such authorization. Also, since your Health Care Proxy may not come into effect until a physician certifies that you are incompetent, the HIPAA Authorization will allow the person you name access to your past medical records before that time.

As mentioned before, these documents only cover the basics of estate planning and determining what is best for you depends on many factors unique to your situation. If you have any questions or would like more specific information, please feel free to contact us by phone: (781) 397-1700, email: info@sslawoffices.com, or visit our Contact Us webpage.