Wills, Powers-of-Attorney, Living Wills/Healthcare Declarations, and Trusts; these are some of the instruments people use to make sure they are cared for the way they want as they age and their money is used the way they wanted after they pass. Though most people have heard of these documents, many times I have clients come into the office and kind of mix them up. Some here are some simple explanations of these documents.
A Power-of-Attorney (POA) is a document where a person, the Principal, transfers their personal authority to act on their day-to-day activities to another person called an Agent. The authority can be as limited as to a single transaction like to sell a car or as broad as to allow an Agent to do everything a Principal could do for themselves. This power can be revoked at any time and ends upon the death of the Principal. The POA can be and should be set up to survive after the Principal becomes incapable of making his or her own decisions. This is called a Durable POA. The Agent should be selected carefully and be trustworthy because the POA is usually effective as soon as it is signed. The POA law in Pennsylvania changed on January 1, 2015.
A Living Will/Healthcare Declaration is a document that the Principal grants the Agent the authority to make medical decisions for the Principal when the Principal cannot make his or her own decisions. This document also outlines your end of life choices as well. It is effective as soon as you sign it. You should give a copy to your primary care doctor to have in his or her file when needed. It can be revoked or changed any time you want. You should review it every 3 - 5 years or before any major medical procedure. Not only does this help the Principal ensure he or she receives or does not receive treatment they want but can help family members make tough decisions without some if the guilt of the final outcome.
A Trust is a complex arrangement and this is just to help someone understand the difference between the documents listed. A Trust is created by an agreement between the person with the assets, the Settlor or Grantor, and a person or company to managed the assets, a Trustee, for the benefit of the Settlor and/or another person, a beneficiary. Some of the common uses of a Trust are it allows a Settlor/Grantor to preserve money to help it last through the Settlor/Grantor/s life, ensure a special needs family member has resources through their lifetime, and/or ensure children do not receive an inheritance at too young an age and encourage children to complete college. Trust documents can be simple but can be extremely complex to address several issues. They may be funded immediately meaning the Settlor/Grantor transfers wealth immediately to the Trustee or the Trust may be funded upon the death of the Settlor/Grantor. Some will be written to be revocable and others will be written to be irrevocable. The structure of the Trust is specific to purposes of the Trust.
There are self-help websites that offer forms for these documents but those sites may not ensure they are drafted in an appropriate manner. It is always best to discuss these matters with an attorney.
If you want assistance, legal representation, or just want to know more about Medvesky Law Office, LLC, check out our website at www.medveskylaw.com.
Importance of a Will and other planning documents - Medvesky Law, LLC http://youtu.be/lyrg2MtdCs0?list=PL9RemGXT2U-e1IiYVxQCxMGz-S0c74ifu
Power of Attorney - Necessary but be cautious - Medvesky Law Office, LLC
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