Tuesday, March 31, 2020

Why Making a Will Is An Important Task for Your Family And You


All our lives we work hard to ensure that our family never has to face a difficult time ever but we promptly forget all about them at the end. We are talking about preparing wills or last testaments that people almost always don't prepare or unnecessarily delay due to a psychological block. The psychological block is our inherent fear of death which is aggravated during the making of a will. The preparation of a will is almost an indication of our own mortality and that is something none of us want to accept.

But whether we accept it or not, our mortality is the only truth and we must keep the responsibility of taking care of our family with us. A will could save our family from a host of troubles out of which some could be huge hassles that will need a lot of time and resources to solve. Say, for example, the most common form of trouble that comes from the non-preparation of a will is property disputes. Normal property disputes could siphon off huge amounts of time and resources. Plus there is no guarantee that the problem will be solved within a stipulated time. Property disputes are known to stretch for years and some even extend till the death of the supposed beneficiary. This means there are chances that your family might never get to enjoy the property that rightfully belongs to them.

Does that statement depress you? But that's simply the beginning as there will be more and more problems associated with the non-existence of a will.

The next problem that could occur is the proper division of the property and in case of common ownership of a property- the lack of a trust fund. These are legal wrangles that could again put pressure on your family or dear one's resources.

Making a will is the best form of property management as the methods of division is expressly mentioned in the will. Without the existence of a will, there are chances that the beneficiaries or dependents will have a tough fight in their hands to ensure their right on the property. Then there are properties which have common ownership and for those, you need to create a trust fund. But that's again not possible without the presence of a will or testament.

Make a will immediately as this will not only guarantee the peace and security of your loved ones but also give you the strength to accept your own impending mortality.


Article Source: http://EzineArticles.com/?expert=Saroj_Ku_Ghadei

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Monday, March 30, 2020

Sunday, March 29, 2020

The Advantages of Making a Will Which Can Serve As a Catalyst for Preparing It


Like most legal documents, the importance of a will increases with its acceptance amongst authorities. Making a Will is a complete legal procedure and its advantages are many which make the preparation imperative on the part of the owner. But the legal responsibility for making a Will shouldn't be taken in a negative light and procrastinated about. Instead the very advantages of making a Will could be the single greatest catalyst for the preparation of a Will by the owner of the assets. Below are a few of the major advantages of making a Will that could be the catalyst for the owner to prepare it.

Also we would like to state that people rarely find making a Will to be a pleasant task. Preparing a Will is a metaphor for our own mortality which people don't want to face. But as they say- No one is immortal or escapes death and taxes! Who knows? You could compromise with your own mortal end during the preparation and come out with a better view on life.

The advantages of making a Will are:

No dispute between dependents: There can be no chance of any conflict or dispute between the several dependents of the property if a will is already made. The will perfectly sums up what is left to whom and that itself diffuses any chance of conflict plus the division is also ensured by law of the land. Without a Will, inheritance disputes often run into years and decades which are not a viable option.

Lack of ambiguity: A Will is a legal document that clearly states the division of the property and that in itself clearly puts out the lack of ambiguity.

Property Management: The property can now be easily managed or divided according to the directions given in the Will and that leads to a better sense of property management.

Appointment of Executor/Guardian or Trustee: Will often appoints a responsible person as a Executor or a Trustee who acts as the overseer of the property. This also is important when the beneficiary is a minor or of unsound mind and cannot look after the assets.

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Saturday, March 28, 2020

Living Trust Definition - What is a Living Trust?


The best living trust definition is a written legal document which substitutes for a will as your primary estate planning vehicle. When you have a trust you transfer your assets such as your home, financial accounts and personal property to the trust. In addition, you change the beneficiary or contingent beneficiary of retirement accounts and life insurance to the trust. These assets are then administered for your benefit during your lifetime, and either continue to be held or transferred to your beneficiaries when you die.

The creator, also called the grantor, of the trust, usually names him or herself as the initial trustee in charge of managing the assets. This allows the grantor to remain in control of the assets during his or her lifetime. For all practical purposes under this living trust definition, nothing changes in the way the grantor manages or controls the assets after they are put in trust. The only difference is the named owner.

A successor trustee is named in the document, usually a family member or friend but sometimes an institution such as a bank or trust company. This successor trustee then will manage the trust assets for benefit of the grantor if the grantor becomes disabled and for the contingent beneficiaries after the grantor dies.

This living trust definition is for the revocable living trust. It is also sometimes referred to as a revocable inter vivos or a grantor trust. It may be revoked or amended at any time by the grantors as long as they are still competent.

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Friday, March 27, 2020

Estate Planning - More Than Just A Legal Will


When people think of Estate Planning, they generally think of legal wills. Estate planning is not just a will, although it does involve writing one. Rather, it's a series of legal steps that involves allowing your beneficiaries to avoid probate and minimize the taxes incurred, and for you to write a living will in which you nominate trusted associates who would assume power of attorney and executor status should you be incapacitated or die. Estate planning also allows you more direct control over how your assets will be treated when you're gone.

One of the most important parts of any estate plan are measures to avoid too much of the estate's worth being lost to taxes. In the United State and abroad, dying can attract a number of specific taxes from both State and Federal governments, like death tax and estate tax. The simplest way to minimize estate tax is to name recipients of funds or assets from your estate in your legal will, specifying that a certain amount should be given as a gift. Provided your lifetime tax-free gift threshold of $1 million is not exceeded, these portions cannot attract any taxation.

An important part of any estate plan is the inclusion of a living will. A living will is not usually considered a legally binding document, however, it is given consideration if you are ever incapacitated and left unable to carry out your legal rights, or make decisions. While the living will itself may not carry much weight, you can nominate someone to assume your enduring power of attorney (EPA). If you are unable to exercise the living will as a legally binding decision, your enduring power of attorney can only be challenged by a court.

The will itself is the most important part of any estate plan. If you should die without writing a will, the specific laws of your state will determine how your assets will be divided following probate. Additionally, with no prior planning of where the assets should go on the event of your death, your estate is likely to be taxed the maximum possible amount. Where no will is present, the spouse is likely to keep one third of the value of the estate with the remainder to be distributed evenly among children.

An estate plan enables you to stipulate, for instance, that if your children receive an inheritance, the property is given to them personally and not, for example, to the child's spouse. Should your child ever divorce, then the value of any inheritance received would not have to be shared in any divorce settlement, as it would not be a shared asset of that marriage.

One of the more important aspects of estate planning is the protection it can provide your assets. Typically, after a person passes away their family sells the assets that were left to them and divides the proceeds among themselves. If, however, you have a company or significant property holdings, you may wish to prevent the breakup of any of these assets, judging them to have more value whole compared with their value after being broken up.

Estate planning allows very specific instructions for how such assets should be treated if you wish to prevent this asset division from happening. For example, you can specify in your will that you require that your business be run by a family trust whose members and membership requirements you specify. It is not uncommon for people to wish to leave behind some legacy when they've gone, and the establishment of a family trust to ensure your assets are managed properly by a family member is a good way of ensuring it.

Another common request made is for a trust fund to be established as a scholarship fund or similar. Again, with a proper estate plan, it is possible for a benefactor to specify who a scholarship fund is for, and who is allowed to sit on any board or committee it relies on to pick a recipient.

Estate planning is the method by which specific instructions may be given in advance on how to manage your affairs should you become incapacitated or die. Estate planning represents the best way of protecting your assets from the whims of financially irresponsible relatives, excessive government taxation, and dissolution of your assets by the normal laws of succession in the state or country concerned.


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Thursday, March 26, 2020

Legal Document Preparation - By The People


Rene talks about how By The People Document Preparation Service in Fairfield CA can help people with uncontested legal matters in an inexpensive way. See more at http://www.bythepeopleca.com, or call 707-428-9871

Wednesday, March 25, 2020

How to Properly Use a Power of Attorney


A power of attorney is a legal document that authorizes one person to act on behalf of another in the legal or business dealings of the person authorizing the other. This type of document has a lot of relevance when, for example, somebody needs to execute some business or legal matter but is unable to do so for whatever reason. In the absence of the person, another person may be authorized to execute the matter through the use of a power of attorney, which in common law systems or in civil law systems, authorizes another person to act on behalf of the person so authorizing the other. The person authorizing is known as the "principal" and the person authorized is called the "agent". The agent may, on behalf of the principal, do such lawful acts such as signing the principal's name on documents.

An agent is a fiduciary for the principal and, as this is an important relationship between principal and agent, the law requires that the agent be a person of impeccable integrity who shall always act honestly and in the best interests of the principal. In case a contract exists between the agent and the principal for remuneration or another form of monetary payment being made to the agent, such contract may be separate and in writing to that effect. However, the power of attorney may also be verbal, though many an institution, bank, hospital as well as the Internal Revenue Service of the USA requires a written power of attorney to be submitted by the agent before it is honored.

The "Equal Dignity Rule" is the principle of law that has the same requirements as the agent as it does to the principal. Suppose that the agent has a power of attorney that authorizes him or her to sign the sales deed of the principal's house and that such sales deed should be notarized by law. The power of attorney does not absolve the agent from the necessity of having the sales deed notarized. His or her signature to the sales deed must also be notarized.

There are two types of powers of attorney. One is the "special power of attorney" and the other, "limited power of attorney." The power of attorney may be specific to some special instance or it may be general and encompasses whatever the court specifies to be its scope. The document will lapse when the grantor (principal) dies. In case the principal should become incapacitated due to some physical or mental illness, his power of attorney will be revoked, under the common law. There is an exception. In case the principal had in the document specifically stated that the agent may continue to act on his behalf even if the principal became incapacitated, then the power of attorney would continue to enjoy legal sanction.

In some of the States in the USA, there is a "springing power of attorney" which kicks in only in case the grantor (principal) becomes incapacitated or some future act or circumstance occurs. Unless the agreement has been made irrevocable, the agreement may be revoked by the principal by informing the agent that he is revoking the power of attorney.

Making use of standardized power of attorney forms helps in framing a legally sound and mutually beneficial relationship for principal and agent. With the ease of use and ready availability of such forms, it is highly recommended that they be utilized when thinking of granting a power of attorney to someone. However, care should be taken not to let unscrupulous persons defraud innocent persons such as the elderly through ill-conceived agreements.

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Tuesday, March 24, 2020

Wills and Trusts - What Are the Differences?


Both of these legal documents offer a way to distribute estate assets when a person dies but each is different in a variety of ways.

Wills

With a will, it is cheaper to prepare but it can be expensive to probate. In many jurisdictions, according to estate law, this is a legally binding document, which will allow you to give your assets to a designated beneficiary or beneficiaries. Unfortunately, this usually does not happen until after the person of the will dies. A will executor carries out the distribution of their assets. After the creator dies, the will must go through probate. During probate, the court will decide if the will is valid. Then the court will supervise the distribution of the assets. This can be a costly process because the assets can be subjected to estate taxes. When this is the case, an estate lawyer's services may be required.

With a will, one of the drawbacks is that they become public record after the creator's death so everything about the will is public knowledge. In order to manage the distribution of assets, there will be a conservatorship or a power of attorney.

Trusts

A trust is more expensive to prepare but when there is a trust, it will usually allow the beneficiaries to avoid any probate costs. After having a trust written it can take effect any time during a person's lifetime using a trustor to convey assets to the trustee to hold for the beneficiaries. When the creator dies, the probate is avoided. This is because the assets were transferred during the lifetime of the trustor. The trust will continue to function even after the trustor dies.

With a trust, it will usually remain private and allow the beneficiaries of the trust to maintain confidentially about the specific terms of the trust. Generally having a trust can provide more tax benefits. In some jurisdictions, they will allow for a certain amount of the trust assets to be passed on to the beneficiaries without requiring them to pay gift and estate taxes. Depending on any applicable trust laws, the tax perks available will vary from one jurisdiction to another jurisdiction.

In managing a trust, it can be done by a trustee or a trustor but will depend on how the trust has been set up. If the trustor manages the trust then he will usually specify who will manage it once he has died.

In conclusion

Looking at all the facts it appears that it is best if a trust is set up to distribute the assets instead of using a will. If you are uncertain talk to an estate attorney for legal advice as to which one you should set up for your particular situation.


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Monday, March 23, 2020

Estate Planning : Have You Been Named in the Will?



If you are a beneficiary in a will, you will most likely receive notice after the will is entered in probate court. Learn what to do if you have been named in a will from an estate planning and probate lawyer in this free video on estate law.

Saturday, March 21, 2020

Advance Medical Directive: The Basics


Advance medical directives are legal documents designed to outline a person's wishes and preferences in regard to medical treatments, interventions and other health care related issues. Policies may vary from state to state, but regardless of location, advance directives should always be included with each individual's personal medical records.

Advanced directives typically fall into three categories:

  • Do Not Resuscitate Order: This legal document, also known as DNR, is extremely valuable for determining end-of-life issues. A DNR order, however, is not legal until signed by the patient, a witness and a physician. It should also be dated correctly and clearly state whether the patient wants to be resuscitated or not if their heart stops beating.

  • Living Will: This written document stipulates what kinds of medical treatment the patient recommends should they become incapacitated. It can be either general or very specific depending on the person and how adamant they are about their end-of-life care issues. The usual items outlined in a living will include: whether they wish to be on life support, receive tube feedings, length of time (if any) that they will stay on breathing machines, the individual that will make decisions on their behalf, etc.

  • Durable Power of Attorney: This type of advance directive allows an individual the opportunity to designate someone, or a number of individuals, to act on their behalf for specific affairs. A durable power of attorney, or DPOA, has the ability to make bank transactions, sign social security checks, apply for disability, or even write checks to pay utility bills while an individual is medically incapacitated. Once the document is signed, the DPOA has legal priority even over next of kin.

When Should a Directive be Created?

You will see an advanced medical directive used for several different situations-such as when someone is having a major surgery, diagnosed with a life-threatening illness or is even becoming a single parent. Advance medical directives are extremely beneficial if an individual is unable to make his or her own medical decisions. Whatever the reason, all advance medical directives should be signed by an attorney and be notarized.

How to Obtain an Advance Medical Directive

Luckily, there are many ways that someone can obtain an advance medical directive. Many companies have booklets available, social workers and nurses usually have them on hand, and hospitals and attorneys also have copies of directives. It is worth the effort to ask for an advance medical directive as it will be invaluable during a medical dilemma.

By having previously documented personal wishes and preferences, the burden of making tough decisions for family's and physicians' is lessened. Not to mention, the patient's autonomy and dignity will more likely be preserved by following their own choices regardless of mental or physical capacity.


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Thursday, March 19, 2020

What Happens if a Person Dies Without a Will?


If someone dies without leaving a valid Will, the person is said to have died intestate - that's legalese for without a will - the property she held in her own name as his or her own separate property passes to the person or persons specified in the laws of the deceased's state of residence, after any bills and taxes are taken care of.

Wednesday, March 18, 2020

Tuesday, March 17, 2020

Features of a Revocable Living Trust


Financial advisor Ric Edelman discusses why a revocable living trust is a key part in the estate planning process.

Monday, March 16, 2020

QDRO Forms to Divide Pension Benefits in Divorce - "Shared Interest" Or "Separate Interest" Approach


Many people facing the prospect of divorce are surprised to learn that pension benefits accrued during the course of a marriage are considered marital property (or, in some states such as California, community property) that is divided between the spouses upon divorce. A pension plan falls under the category of retirement plans known as defined benefit plans. These types of retirement plans generally provide that upon retirement, the participant (employee) is entitled to a monthly annuity that is payable over his or her lifetime.

Because of certain provisions contained a Federal law known as the Employment Retirement Security Act, a divorce judgment or matrimonial settlement agreement, standing alone, is not a legally sufficient mechanism for dividing a pension plan. It is essential that a further order, known as a qualified domestic relations order (QDRO) be entered by the court and approved by the pension plan administrator.

In situations where the participant spouse is not yet retired, the QDRO form can utilize two different methods for dividing pension benefits. These include the "shared interest approach" and "separate interest approach."

If a QDRO form uses the Shared Interest Approach, payments to the Alternate Payee cannot begin until the Participant chooses to retire and begins to receive a retirement allowance. Furthermore, payments to the Alternate Payee must end upon the Participant's death unless the Alternate Payee was designated in the QDRO as the surviving spouse of the Participant for the purpose of electing a Qualified Joint and Survivor Annuity and such election was elected by the Participant at the time of the Participant's retirement.

If a QDRO form applies the Separate Interest Approach, a "separate interest" is carved out for the Alternate Payee and adjusted to his or her actuarial life expectancy. In addition, the Alternate Payee controls the timing and manner of his or her receipt of the benefit payments. The Alternate Payee can commence receiving benefits at the Participant's earliest retirement date, rather than wait for the Participant to begin to receive a retirement allowance.

In most instances, it is highly beneficial for the non-participant spouse that the QDRO form utilize a separate interest approach. Sample QDRO forms are available for download. Upon completion of a proposed QDRO form, the document must be submitted to the pension plan administrator for approval, and, thereafter, to the divorce court adjudicating the matter.


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Sunday, March 15, 2020

Irrevocable Vs Revocable Trust


Establishing a living trust is critical to the ability to protect your assets and beneficiaries when you die. But many people don't know that there are two types of trusts - irrevocable trusts and revocable trusts. With irrevocable trusts, the grantor's assets are moved out of the estate. In a revocable trust, assets stay in the grantor's estate. There are advantages to each type depending on the grantor's specific circumstances. Here is a rundown on the differences between the two types of trusts.

Irrevocable Trust

Most people are unaware of the advantages that this type of trust provides:

  • Asset Protection - Moves assets out of the grantor's hands, keeping it safe from lawsuits or creditors. A trustee has the power to make decisions with or without the input of the grantor.
  • No Estate Taxes - Many people are attracted to these trusts because they are protected from federal estate taxes.
  • No Capital Gains Taxes - A skilled lawyer will be able to move assets into irrevocable trusts so as to avoid capital gains taxes. This cannot occur with a revocable trust.

Before placing assets into this type of trust, make sure that the grantor will never need them. While it is possible to retrieve assets, it is very difficult and time-consuming.

Revocable Trust

Most people have an idea of what this type of trust is. Grantors without complicated tax issues that want to still maintain control over their assets, often choose to have this trust.

  • Mental Disability - Individuals who fear that they will one day be incapacitated, may want to designate a trustee to handle their assets which can include extensive instructions that the trustee must carry out. This is called a Disability Trustee.
  • To Protect Beneficiaries and Property - Keeps your property and assets out of probate. This ensures that your documents stay private and out of the public record. If privacy is important to you, consider a Revocable Living Trust as opposed to a Last Will and Testament which becomes a matter of public record that can be seen by anyone.
  • To Avoid Probate - Assets at the time of a person's death will pass directly to the beneficiaries named in the trust agreement and avoid probate.
  • For Flexibility - These types of trusts can be changed. If you have a second thought about a particular item or beneficiary, you can modify the document through a trust amendment. If you don't like the trust as a whole, then you can revoke the entire document.
Word of Caution: These trusts offer not creditor protection. If the asset holder is sued, the items in the trust are fair game. Upon your death, those assets will be subject to federal and state estate taxes.


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Friday, March 13, 2020

How Much Does Probate Cost and How Long Does It Take?


The answer depends on the complexity of the estate and the required probate procedures in your state.

Thursday, March 12, 2020

Four Reasons Why Business Owners Should Make A Will


If you own a business or have shares in a family company then you should consider making a Will. The following are some of the reasons why making a Will for business owners is so important.

1. The first reason is the fact you can select appropriate executors and trustees, who will be responsible for ensuring the running of the business after your death. Unlike funds in the bank, where management can be fairly minimal, your executors will almost certainly need to ensure the business is kept running in the short term until more long decisions can be taken.

For even the smallest business, your executor's job is to ensure that your financial obligations are met, this can include dealing with tax issues, employees and your business accounts. Failing to do so could have a detrimental effect on the value of the business and therefore mean your family loses out financially. So while you may ultimately want your spouse or children to inherit, if they are not going to be the appropriate executors then you can appoint executors who have the business skills to carry out the executor's duties effectively.

2. The second reason is that by drafting your Will, you can take advantage of the tax breaks offered for business property. There are ways in which the Will can be prepared to ensure that not only do you pass your business to the people you want to inherit, but you do so in a way that limits your total inheritance tax bill as well.

3. The third reason is for making a Will is so that you define exactly how your executors can act. By making a Will, you are able to ensure that your executors have all the necessary powers and authorities they will need to carry on your business and run it correctly. Without a Will, your estate may end up in a position where decisions or steps that are needed to ensure the survival of the business cannot be taken when they need to be. This could mean either a lucrative business opportunity is missed or that an expensive Court application is needed. Either way, the result is detrimental to your estate.

4. The final reason for making a Will is to ensure that your interest in the business passes in the way that you want. So for example, if you have that children assist in the business while others do not, you can draft your Will to take this into account.

You may, therefore, decide to ensure that your children who are involved in your business inherit the shares, while the others take cash or other assets. Doing this ensures both fairness in the way your children are dealt with, but also means that your children who do take a role in the business will not to lose their livelihood following your death. Additionally, it means that they will not be forced to sell the business to pay their siblings, a move which may mean they also lose out financially.

If you own a business then making a Will really is something to consider very seriously. The time and effort you have spent in building your business, and its value to it may not be properly passed to your family if you do not make a Will.

Wednesday, March 11, 2020

Power of Attorney



Rene at By the People in Fairfield CA talks about just some of the reasons for a need for a Power of Attorney. These documents can be really important aids in helping loved ones.

For any questions about the types of Power of Attorney, and what may be beneficial for your individual needs, call Rene or Tammy at 707-428-9871 and visit the website at http://www.bythepeopleca.com

Tuesday, March 10, 2020

Understanding a Power of Attorney for Finances


Carolyn Rosenblatt discusses a Power of Attorney for Finances. This important document may be necessary to help care for your elderly parents. It can prevent financial elder abuse.

Monday, March 9, 2020

The Advantages of an Uncontested Divorce


Many states these days give couples the ability to go through a simple uncontested divorce. In fact, this is the way most couples do divorce. It's relatively simple and inexpensive, and it preserves both parties' dignity and privacy.

Divorce is expensive no matter how you slice it, but if you do need to get a divorce, an uncontested divorce will let you save yourself time and money, and as much heartache as possible. This situation is difficult enough, and you don't have to make it more difficult to make the divorce itself contentious unless it's absolutely necessary to do so.

If there are particularly contentious issues in your marriage still to be resolved (such as child custody), then an uncontested divorce may not be the way to go, since of course you'll need to make sure your rights and those of your children are taken care of. In fact, in some states, if there are children involved, an uncontested divorce may not even be an option for you.

However, if you and your soon-to-be ex-spouse are on relatively good terms and simply need not to be married anymore, and if issues such as child custody are already worked out between you, then an uncontested divorce is going to be easier for everyone. Yes, the process of getting divorced is still painful, but an uncontested divorce makes it as simple a process as possible, too.

Privacy is also an issue with divorce. The disclosures you make to each other don't have to be a matter of public record unless you each want them to be if the divorce is uncontested. The agreement you make will have to be a matter of public record, but only that. By contrast, contested divorce is likely to have every single little nuance of the divorce a matter of public record simply because spouses in a major battle with each other make such things a matter of public record. So if you want to protect your privacy, work out the details of the divorce between you and simply make the final agreements a matter of public record, not every little discussion you to have had as well. This is easier on your children, too.

If you think you can't negotiate an uncontested divorce with your spouse, that's fine. Perhaps you can't. However, make sure that your spouse and you are both aware of the problems an uncontested divorce can help you avoid. It may very well be that simply faced with the differences in navigating through a contested divorce versus an uncontested one will convince the spouse who doesn't want the uncontested divorce to go through with it.

Now, it should be noted that you don't have to agree as to why the divorce is happening to make it uncontested. You only have to agree on the terms of the divorce to make an uncontested divorce possible. Therefore, at first blush, it may certainly be true that you think you cannot manage an uncontested divorce. However, after a bit of time has gone by and tempers have cooled, you may think that having an uncontested divorce is best for you after all. Think about it, think about the cost both financially and to your children, and then decide whether or not an uncontested divorce is your best bet.


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Saturday, March 7, 2020

Business Laws : Forming an LLC



Forming an LLC, or limited liability company requires contacting the Small Business Administration to find out what type of licenses and registrations are needed to be filed.

Thursday, March 5, 2020

Selecting a Legal Structure for Your Business


Starting a business requires prospective entrepreneurs to make hundreds of different decisions before opening their doors to customers. One of the most important decisions is selecting the right legal structure for your enterprise. The manner in which you choose to organize will impact your taxes, personal liability exposure, and fundraising options.

Sole proprietorships are the most common arrangement for people who work alone. This structure is a popular choice because it is the easiest to arrange and does not require any filings with the state. One of the biggest disadvantages of the sole proprietorship, however, is that entity does not exist apart from the owner. Consequently, the owner is personally liable for all financial obligations and damages resulting from lawsuits filed against the company. Another disadvantage is that it can be difficult to raise capital. Banks are reluctant to make loans to sole proprietorships, leaving the owners to rely on home equity loans or borrowing from family.

For enterprises with more than one owner, a partnership might be a good arrangement. Each partner contributes capital, labor, or expertise in order to turn a profit. The partners share in the profits, but like a sole proprietorship, they are also personally liable for debts and damages. One way in which partners can reduce personal exposure is by forming a limited partnership. This form consists of general partners who make decisions and assume the risks and limited partners with no control in the operations in exchange for reduced liability. Tax treatment is one of the main reasons this arrangement is selected. Profits and losses are passed through to the individual partners.

Limited Liability Companies, or LLCs, are a type of structure that is becoming very popular. This structure creates an entity separate from the owners. As a result, the owners are not liable for debts or judgments against the venture. Unlike a limited partnership, all members are free to participate in the management and enjoy protection from personal liability. LLCs also enjoy pass-through taxation. However, the tax rules for these structures are complicated. The amount of paperwork is a huge hurdle, and members must file articles of organization with the Secretary of State or sign an operating agreement.

The right structure for your business depends on a number of different factors unique to your enterprise. For example, a small boutique selling handmade cat collars will obviously have less risk and perhaps less revenue than a company that provides window washing services to high-rise office buildings. Prospective entrepreneurs are advised to contact their attorney or accountant in order to discuss the taxation and liability consequences of the different entities. A number of free or low-cost resources to help you make your decision are available from your local chamber of commerce, Small Business Administration, or volunteers with the Service Corps of Retired Executives.

Selecting the organization for your business is one of the most important decisions you and your partners will make. Research all of the available options and seek advice from experienced professionals before making your selection.

Wednesday, March 4, 2020

Different Types of Power of Attorney


Although power of attorney is essentially handing control of your affairs over to another person, there are different uses of the position which vary depending on the situation. These largely depend on the reason behind power of attorney being transferred from the 'principal', the individual who wishes to relinquish control of their affairs, and the 'attorney-at-fact', the person who takes control of the principal's business and legal dealings.

Non-Durable POA

Non-durable power of attorney is used for short-term transactions, which for whatever reason the principal cannot handle themselves. Any such power of attorney that is non-durable has an expiration, primarily when the principal becomes incapacitated for some reason and is no longer able to give permission for the power of attorney to continue, nor can they revoke it. Usually, non durable power of attorney is limited to a specific time frame, in which any particular deal that is needed to be completed is given time to be dealt with. When this particular instance is complete, power returns to the principal.

Non-durable POA is effective immediately.

Durable POA

This type of power of attorney is similar to non-durable power of attorney, only it continues in the event that the principal becomes incapacitated or mentally ill. All powers of attorney come to an end when the principal dies, but durable power of attorney continues right up to that point. Power of attorney that is durable is often used in terminally ill cases, where the principal asks their attorney-at-fact to allow any lifesaving equipment to be removed or authorize a Do Not Resuscitate

Durable POA is effective immediately.

Springing POA

Springing power of attorney is used in cases where the principal cannot actively give permission, either verbally or in writing, for someone to act as their attorney-at-fact. To obtain springing power of attorney, a doctor must certify that the principal is incapable of thinking for themselves and an attorney-in-fact is required. Springing power of attorney is used predominantly in cases of sudden deterioration of health, such as deterioration of a mental illness or a serious accident.

These are the three main types of power of attorney, governing time and how the power is assigned. However, power of attorney does not have to be granted for all of the principal's affairs - it can sometimes only apply to one aspect, such as financial. The differences are as follows:

Special or Limited POA

Predominantly used with non-durable power of attorney, special or limited power of attorney is used for specific cases. It often just applies to financial dealings or a specific property sale, and though an attorney-in-fact is appointed, they have no control over any aspect of the principal's life apart from the sector they are charged with.

Any other type of POA is called General Attorney, which applies to all affairs and dealings of the principal.

Health Care POA

This is a specific power of attorney that is used for those who are terminally or mentally ill, and gives the attorney-in-fact power over medical decisions but nothing more. It is similar to special attorney, though is specifically used for medicinal purposes.

Disclaimer: This article is for informational and entertainment purposes only, and should not be construed as legal advice on any subject matter.


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Tuesday, March 3, 2020

Monday, March 2, 2020

Uncontested Divorce - Definition, Terms and Conditions


An Uncontested Divorce is a legal procedure in which the spouses mutually agree on certain terms and conditions, in order to adjourn their marriage. An uncontested divorce can be executed successfully if the spouses comply to a shared agreement in the matters related to the property partition, financial matters, any kind of support activities related to their children, and other litigious affairs.

A major benefit of consenting with an uncontested divorce is that unlike contested divorce, it doesn't have to deal with emotional and financial issues, is relatively inexpensive and quick, since most of the times the spouses may not find any need of an attorney or a court case for the divorce, if they are in good terms with each other, and plan to go with proper understanding. This is quite helpful essentially when the couple has much fewer assets to deal with and no children.

There are many "Do it yourself" forms available at concerned regulatory agencies, which can assist you in going ahead with the uncontested divorce activity yourself, without the need of any outside legal authority or attorney. But, in case of the issues for child support or the partition of community property, one must follow up with attorney related to divorce, before they proceed with signing off any legal documents.

Divorce is a quite tedious and sometimes displeasing procedure. Despite having mutual consent on many of the terms, there still exist loads of matters that need to be taken care of, before ending up the marriage. The couple needs to be capable enough to distinguish these issues and resolve them as soon as they can. To decide whether it is appropriate for a couple to go ahead with an uncontested divorce rather than a contested one, there are certain points that can be used as reference:

1) Are both the spouses agreeing to go for a divorce, or one of them still wants to re-establish the relationship?

2) Are all the financial issues, modes of income and other related assets properly understood by both the spouses, so that they can divide and decide on them accordingly?

3) In case, there are children, are all the issues regarding the child care and support, custody, periodic meetings and visits decided yet?

4) Are all the issues getting settled with mutual consent, and are devoid of any hard feelings?

5) Are both the partners in accord with the honesty or authenticity of the other partner's notions, regarding the resolution of these issues?

If either of the above-mentioned questions has an answer as "yes", then it is appropriate to go for an uncontested divorce.

An uncontested divorce can be carried on easily and without much hassles, but they can be derogatory to certain individuals in case the people involved in the divorce, do not know much about their appropriate rights with respect to the alimony amount, partition of pension, earnings from real estate, and other modes of income.

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Saturday, February 29, 2020

Living Trust and Wills - By the People


Living Trust or a will? Rene talks about some of the differences and what sets one apart from the other to help you make the best decision for your needs. Call Rene or Tammy at 707-428-9871 with any questions you may have, and see their website at http://www.bythepeopleca.com

Friday, February 28, 2020

4 Things You Need To Know About Advanced Directives


It is a sad truth that death is an inevitable part of life. And, even though many of us are reluctant to face this fact, it is no excuse to fail to plan for your end-of-life healthcare, particularly if you are past retirement age. Although it may be scary to think about your end-of-life decisions, it can greatly improve the quality of life for your family after you are gone, and will reduce the chance your passing is a burden on your family. Advanced directives offer you the assurance that your last wishes will be fulfilled. Here are four things to know about them.

1. What is an Advanced Health Care Directive?

An advanced directive is a generic term for a legal document that describes to and instructs others about your medical care, in the event you are unable to make your decisions known. A directive only becomes effective under circumstances described in the document, but in general, allow you to do two things. The first is to appoint a health care agent or power of attorney. This person will make decisions on your behalf. Secondly, the directive will provide instructions about exactly what forms of health care you want and do not want.

2. Why Are Advanced Directives Important?

According to recent surveys, the majority of people would prefer to die in their own homes. However, many terminally-ill patients meet the end of their life while in the hospital, typically while receiving ineffective treatments that they may or may not really want. Occasionally, this confusion can cause conflict between the surviving members of the family, leading to fights and arguments. Meanwhile, the dying person's thoughts and wishes remain unexpressed. An advanced care directive prevents all of this. From documenting the treatments you want to describing your wishes for your remains and personal effects, advanced care planning is highly beneficial.

3. Creating an Advanced Care Directive

An advanced care directive and living will do not have to be complicated, however, the content may be complex and should be considered carefully. In general, it will consist of short, simple statements about what types of treatments you would accept or deny, given particular circumstances where you are unable to speak for yourself. It is important to create this document with the help and guidance of your family, legal, health, and financial professionals for maximum effectiveness.

4. Talking With Your Loved Ones About Your Choices

A vital step in advanced care planning is to clearly communicate your wishes to your loved ones and family about your decisions, and why you are making them. For most of us, this conversation can seem like a daunting task. You may be uncomfortable bringing up your own death with your loved ones, or it may seem like poor timing to have that conversation, but it is much better to have this conversation now, before there's a problem, so that everyone can remain calm and relaxed.


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Thursday, February 27, 2020

Documents to Consider When Doing Estate Planning


There's nothing that can prevent someone from dying, since physical death is an absolute certainty that no one can escape. The fear for some people, though, is not what's going to happen to them after they pass on, but more on who's going to take care of their loved ones, especially if the people he'll be leaving behind are either very young children or are incapacitated, or both.

You can't have control of what's going to happen to you after death, but you sure can decide what's going to happen to your assets once that event transpires. It's called estate planning. This is the process by which a person (or even a family) arranges the transfer of his assets in anticipation of his death. And in estate planning, there are several documents to consider. Here are some of them:

Last will and testament - This document takes front and center in all the planning. This is the document that legally provides for the transfers of assets after one's death. It names a person to settle the estate, a trustee who will administer any trust established, and a guardian if there minor children. For those who die without having executed a will, they are considered to be 'intestate.' Under certain laws, if one is intestate, property goes first (or in major part) to a spouse, and then to children and their descendants.

Trust - Persons preparing a will and testament can execute either 'inter vivos' or testamentary trusts (trusts established through a will). The difference between the two is that with the former, assets are transferred into the living during the trust creator's lifetime, as opposed to testamentary trusts, where the transfer becomes operative at the time of death.

Durable powers of attorney - A power of attorney is the document that authorizes a designated agent to carry out financial and business transactions for the person that's establishing the document. This grants such agent to access bank accounts (and even brokerage accounts), deal with insurance companies, and even sell property. This effectively allows the agent to step into the shoes of the person he is assisting.

Healthcare power of attorney - This document is a form of a living will that is designed, among other things, to: provide instructions for the conditions should life-sustaining procedures be utilized, authorize who will make healthcare decisions, and ensure that the person chosen to make these decisions is given access to the executor's medical records during incapacity.

These are the important documents to take into account so a person can have the opportunity to make personal and financial decisions, both in life and after death, without the need for court orders.


Article Source: http://EzineArticles.com/?expert=Toby_King

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Wednesday, February 26, 2020

Do I Need a Will?


You can't take it with you. Unless you plan on living forever, there will eventually be a need to divide your property amongst the relatives and loved ones you leave behind. By having a will, you determine who gets what. Without one, the law will do it for you by the operation of statutes. Many people believe that they are not wealthy enough to need a Will. But if you own property that is titled (a car or house), after your death, those items cannot be transferred without opening an estate. If you don't have a Will, the cost of processing your estate goes up significantly.

When a person dies and leaves property behind, that property is known as an estate. In order to transfer ownership of the property in the estate from the deceased to surviving heirs, the estate must go through the probate process. A Will not only identifies who will inherit the property but names an executor to administer the estate. Without a Will, not only will statutes determine who gets your property, but the court will have to appoint an administrator to handle the estate. This is a costly process.

The most obvious benefit to having a Will is controlling what property passes to which heir. This is important if there are pieces of personal property that you want to go to a specific loved one for sentimental or other reasons. A Will also allows you to place conditions on the bequest, such as that the heir completes higher education or attain a certain age, before receiving his or her inheritance.

If these benefits of having a Will are not enough to convince you to take action, then consider those who you are leaving behind. A Will invariably makes the probate process smoother and easier for the survivors. In addition to controlling exactly where the property goes, a Will names the person or persons who will "execute" the estate, meaning the person who will gather the property and distribute it to the named heirs. This is often no small undertaking - it can involve selling stock, closing and consolidating bank accounts, liquidating assets, and more. In drafting a will, you should be sure to select an executor who has knowledge of the property in your estate and the competence and willingness to perform the job, all of which makes for a more efficient probate process. Without a Will, the court must appoint an administrator (obviously not of your choosing) to perform these tasks. Unfortunately, this is more costly and can lead to disagreements amongst family members.

Tuesday, February 25, 2020

Which Is Best, A Will Or A Living Trust?


You don't have to be wealthy to need a will in regards to your personal property. After you're gone, legal wrangling can become time-consuming for family members left behind and often creates indecision and fighting amongst potential beneficiaries as your wishes may not be clear. A will is usually straightforward and simply put is a legal document that specifies how your property will be dispersed at the time of your death. It can be revoked or amended at any point in your lifetime, and can be used to appoint a guardian for any children that are not yet of legal age.

Another option to be considered is a living trust. A living trust handles property management of all assets and all of these assets are transferred to the trust. Typically, you will act as your own trustee while specifying who will act as trustee upon your death. A living trust has the added benefit of avoiding probate after you die and preventing public disclosure of all your private financial matters. A living trust does have some drawbacks. It must be maintained and any new property acquired must be transferred to the trust or it will not be under the protection of the trust. A living trust is also more expensive to initiate and must be managed. Generally a living trust is recommended if your estate exceeds a specific dollar amount, you have minor children, you're willing to manage the trust, and if you want control of when your beneficiaries receive any assets.

A simple will might be a better option if there is informal probate available where you live. Informal probate is a greatly expedited form of probate and is generally available to those whose estate is under a certain dollar amount. If you are single without children, and you don't own a business, it probably isn't necessary to set up a living trust and a simple will is sufficient. Upon your death, the executor of your estate will submit your will along with a petition to the probate court. The petition requests that the will be accepted as legal and valid and request that the executor named in the will be legally appointed. Any heirs, beneficiaries, or creditors must be notified of the submission of the will and have a specific amount of time to challenge it or submit claims against the estate.

This process does not apply to living trusts, which is why many people opt for a living trust versus a will. Each person's situation is unique and should be evaluated by an attorney who is familiar with estate law. Talk to your family and determine who will handle your affairs after your death. With everyone understanding who will handle which aspects of the estate and what to expect, the loss of a family member is a less stressful one.

Monday, February 24, 2020

Why Forming an LLC is a Good Idea


If you are experienced in running your business, you understand the importance of getting the correct corporate form in place. You should seek to have a structure that will not only aid long term expansion but also protect your assets. The good news - there are a lot of potential forms your business can take.

You should consider, if you have a small business, forming an LLC. Think about setting up an LLC if you have a small business. Fortunately, they are simple to create. There is little paperwork with them. Further, in many states, you won't need to file an annual report.

Also, LLC forms a business structure that can protect your personal assets. Just keep you LLC compliant and your personal property is protected.

With an LLC, you can safeguard your business name. Also, LLCs allow unlimited owners. This will help give your business growth room. Also, owners don't need to have US citizenship.

In addition, an LLC doesn't require meetings. It also needs little paperwork. And you can flow your profit and loss to your personal taxes.

Keep in mind that setting up an LLC has fees and paperwork. Also, you need to make sure you are following all city and state laws. Thus, only consider an LLC if you have a clear business plan.

Overall, an LLC is great for small business. So you should at least consider one if you are serious about your business. Remember, it can save you time and money, both of which you can invest in your business!


Article Source: http://EzineArticles.com/?expert=Darrin_Reservitz

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Sunday, February 23, 2020

Estate Planning : Family Estate Trust or Revocable Living Trust?



Most people who ask for family estate trusts really want a revocable living trust to reduce estate taxes and manage finances.

Saturday, February 22, 2020

Who is Entitled to a Copy of a Will?


When a person dies and leaves a will, who gets a copy of that will? Watch this video and learn more about who is entitled to a copy of a will.

Thursday, February 20, 2020

Understanding of Probate - The Process of Assets Transfer After a Person's Death


When someone dies, his or her assets should go through probate. The probate process includes collecting the deceased's assets, paying off liabilities and necessary taxes, and administering property to heirs as per the will.

Probate of decedent's Will

During this process, authenticity of the deceased's will is to be proved in the court of law. Will of a deceased must be probated soon after his or her death. Nobody has a right to hold it back at any cost.
The decedent's attorney or the person possessing the will of decreased, will need to produce it immediately, or within the specified time. There are penalties for destroying or concealing the will.

Probate Proceedings

The procedure starts only when there is the involvement of an official executor. If you are well versed with the different kinds of laws that are involved, then you can submit your application to be the executor on behalf of the friends or relatives.
  • The first thing to do here is to file a formal request. The applications should be submitted in the local court of the same country, where the deceased lived the last days of his or her life. Along with filing the probation documents, you should also produce the original death certificate of the deceased.
  • After filing the documents in the court, it the next step is to inform the creditors of the deceased. You can advertise about the probate in the newspapers, or on any other such local media.
  • You can let the heirs and beneficiaries of the departed know about the probate process, by mailing the court notice to their respective mailing address or by emailing it to them. You will need to document every notification sent to the successors who are in the line, and submit them to the court before the probate process commences.
You can complete all the procedures within the nine months duration, which is after the date of death of your client. There are many benefits from letting your client know beforehand about what will happen with his or her possessions after death.
  • The distribution of property among the beneficiaries will take place only after clearing off the debts taken by the diseased from different sources.
  • The entire process will be completed with transferring of the deceased's possessions to the rightful beneficiaries.
The inheritance money will be handed over to the next successor in line in many ways such as, funeral expenses, debt and taxes, family allowances, costs of estate administration, etc.


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Wednesday, February 19, 2020

Living Wills and Advance Directives for Medical Decisions


Living wills and other advance directives are written, legal instructions regarding your preferences for medical care if you are unable to make decisions for yourself. Advance directives guide choices for doctors and caregivers if you're terminally ill, seriously injured, in a coma, in the late stages of dementia or near the end of life.

Advance directives aren't just for older adults. Unexpected end-of-life situations can happen at any age, so it's important for all adults to prepare these documents.

By planning ahead, you can get the medical care you want, avoid unnecessary suffering and relieve caregivers of decision-making burdens during moments of crisis or grief. You also help reduce confusion or disagreement about the choices you would want people to make on your behalf.

Power of attorney

A medical or health care power of attorney is a type of advance directive in which you name a person to make decisions for you when you are unable to do so. In some states this directive may also be called a durable power of attorney for health care or a health care proxy.

Depending on where you live, the person you choose to make decisions on your behalf may be called one of the following:

  • Health care agent
  • Health care proxy
  • Health care surrogate
  • Health care representative
  • Health care attorney-in-fact
  • Patient advocate

Choosing a person to act as your health care agent is important. Even if you have other legal documents regarding your care, not all situations can be anticipated and some situations will require someone to make a judgment about your likely care wishes. You should choose a person who meets the following criteria:

  • Meets your state's requirements for a health care agent
  • Is not your doctor or a part of your medical care team
  • Is willing and able to discuss medical care and end-of-life issues with you
  • Can be trusted to make decisions that adhere to your wishes and values
  • Can be trusted to be your advocate if there are disagreements about your care

The person you name may be a spouse, other family member, friend or member of a faith community. You may also choose one or more alternates in case the person you chose is unable to fulfill the role.

Living will

A living will is a written, legal document that spells out medical treatments you would and would not want to be used to keep you alive, as well as your preferences for other medical decisions, such as pain management or organ donation.

In determining your wishes, think about your values. Consider how important it is to you to be independent and self-sufficient, and identify what circumstances might make you feel like your life is not worth living. Would you want treatment to extend your life in any situation? All situations? Would you want treatment only if a cure is possible?

You should address a number of possible end-of-life care decisions in your living will. Talk to your doctor if you have questions about any of the following medical decisions:

  • Cardiopulmonary resuscitation (CPR) restarts the heart when it has stopped beating. Determine if and when you would want to be resuscitated by CPR or by a device that delivers an electric shock to stimulate the heart.
  • Mechanical ventilation takes over your breathing if you're unable to breathe on your own. Consider if, when and for how long you would want to be placed on a mechanical ventilator.
  • Tube feeding supplies the body with nutrients and fluids intravenously or via a tube in the stomach. Decide if, when and for how long you would want to be fed in this manner.
  • Dialysis removes waste from your blood and manages fluid levels if your kidneys no longer function. Determine if, when and for how long you would want to receive this treatment.
  • Antibiotics or antiviral medications can be used to treat many infections. If you were near the end of life, would you want infections to be treated aggressively or would you rather let infections run their course?
  • Comfort care (palliative care) includes any number of interventions that may be used to keep you comfortable and manage pain while abiding by your other treatment wishes. This may include being allowed to die at home, getting pain medications, being fed ice chips to soothe mouth dryness, and avoiding invasive tests or treatments.
  • Organ and tissue donations for transplantation can be specified in your living will. If your organs are removed for donation, you will be kept on life-sustaining treatment temporarily until the procedure is complete. To help your health care agent avoid any confusion, you may want to state in your living will that you understand the need for this temporary intervention.
  • Donating your body for scientific study also can be specified. Contact a local medical school, university or donation program for information on how to register for a planned donation for research.

Do not resuscitate and do not intubate orders

You don't need to have an advance directive or living will to have do not resuscitate (DNR) and do not intubate (DNI) orders. To establish DNR or DNI orders, tell your doctor about your preferences. He or she will write the orders and put them in your medical record.

Even if you already have a living will that includes your preferences regarding resuscitation and intubation, it is still a good idea to establish DNR or DNI orders each time you are admitted to a new hospital or health care facility.

Creating advance directives

Advance directives need to be in writing. Each state has different forms and requirements for creating legal documents. Depending on where you live, a form may need to be signed by a witness or notarized. You can ask a lawyer to help you with the process, but it is generally not necessary.

Links to state-specific forms can be found on the websites of various organizations such as the American Bar Association, AARP and the National Hospice and Palliative Care Organization.

Review your advance directives with your doctor and your health care agent to be sure you have filled out forms correctly. When you have completed your documents, you need to do the following:

  • Keep the originals in a safe but easily accessible place.
  • Give a copy to your doctor.
  • Give a copy to your health care agent and any alternate agents.
  • Keep a record of who has your advance directives.
  • Talk to family members and other important people in your life about your advance directives and your health care wishes. By having these conversations now, you help ensure that your family members clearly understand your wishes. Having a clear understanding of your preferences can help your family members avoid conflict and feelings of guilt.
  • Carry a wallet-sized card that indicates you have advance directives, identifies your health care agent and states where a copy of your directives can be found.
  • Keep a copy with you when you are traveling.

Reviewing and changing advance directives

You can change your directives at any time. If you want to make changes, you must create a new form, distribute new copies and destroy all old copies. Specific requirements for changing directives may vary by state.

You should discuss changes with your primary care doctor and make sure a new directive replaces an old directive in your medical file. New directives must also be added to medical charts in a hospital or nursing home. Also, talk to your health care agent, family and friends about changes you have made.

Consider reviewing your directives and creating new ones in the following situations:

  • New diagnosis. A diagnosis of a disease that is terminal or that significantly alters your life may lead you to make changes in your living will. Discuss with your doctor the kind of treatment and care decisions that might be made during the expected course of the disease.
  • Change of marital status. When you marry, divorce, become separated or are widowed, you may need to select a new health care agent.
  • About every 10 years. Over time your thoughts about end-of-life care may change. Review your directives from time to time to be sure they reflect your current values and wishes.

Physician orders for life-sustaining treatment (POLST)

In some states, advance health care planning includes a document called physician orders for life-sustaining treatment (POLST). The document may also be called provider orders for life-sustaining treatment (POLST) or medical orders for life-sustaining treatment (MOLST).

A POLST is intended for people who have already been diagnosed with a serious illness. This form does not replace your other directives. Instead, it serves as doctor-ordered instructions — not unlike a prescription — to ensure that, in case of an emergency, you receive the treatment you prefer. Your doctor will fill out the form based on the contents of your advance directives, the discussions you have with your doctor about the likely course of your illness and your treatment preferences.

A POLST stays with you. If you are in a hospital or nursing home, the document is posted near your bed. If you are living at home or in a hospice care facility, the document is prominently displayed where emergency personnel or other medical team members can easily find it.

Forms vary by state, but essentially a POLST enables your doctor to include details about what treatments not to use, under what conditions certain treatments can be used, how long treatments may be used and when treatments should be withdrawn. Issues covered in a POLST may include:

  • Resuscitation
  • Mechanical ventilation
  • Tube feeding
  • Use of antibiotics
  • Requests not to transfer to an emergency room
  • Requests not to be admitted to the hospital
  • Pain management

A POLST also indicates what advance directives you have created and who serves as your health care agent. Like advance directives, POLSTs can be canceled or updated.

Article Source: https://www.mayoclinic.org/healthy-lifestyle/consumer-health/in-depth/living-wills/art-20046303

Monday, February 17, 2020

Three Lessons on Durable Powers of Attorney


Durable Powers of attorney are an essential ingredient in a complete estate plan, which allows for continued financial management in the event of incapacity. Under a durable power of attorney, an attorney in fact makes financial decisions on behalf of the principal. The attorney in fact can be given broad and sweeping powers. Conversely, powers granted by a durable power of attorney can be limited to particular assets or powers. Accordingly, the level of control given to the attorney in fact should reflect the particular requirements of the estate as well as the principal's comfort with a broad grant of authority. In this article, the author teaches three lessons on effective execution and implementation of durable powers of attorney.

First Lesson: Why would I Need One Now?

The legality of durable powers of attorney stems from the law of agency. Under agency law principals, an individual with capacity may give an agent powers-to contract, to represent the principal or to revoke or amend a trust, for instance. In the case of a non-durable power, the agency terminates upon the principal's incapacity. Durable powers survive incapacity, but the principal must have capacity at the time of execution in order to effect a valid power. Accordingly, executing a durable power of attorney for financial management should be done prior to incapacity.

Waiting until one becomes unable to coherently express one's wishes with regards to financial management decisions is too late, and a court-appointed conservatorship may become necessary. What about the successor trustee designated in my trust, or the executor of my will? Would they be able to step in? Since the principal does not die at incapacity, only an attorney in fact designated under a properly executed power of attorney may step in to make financial management decisions. A last-minute durable power of attorney executed during incapacity would not survive a court challenge, however expensive or damaging the result.

Second Lesson: Consider making the Power Immediately Effective

Often, unwary estate planners will execute "springing durable powers of attorney," which only become effective upon the incapacity of the principal. Incapacity is determined according to a test set out in the power, such as a determination made by a medical doctor or a court rendered decision. But who wants to go through the expense, difficulty, and uncertainty of initiating a legal procedure to determine incapacity? Isn't one of the goals of estate planning to prevent unnecessary expense and delay? Moreover, doctors frequently hesitate to make determinations of incapacity because of liability they may face.

In most cases, a better strategy would be to execute an immediately effective durable power of attorney, which gives an attorney in fact the power to make decisions on behalf of the principal without any finding of incapacity. Many are fearful of an immediately effective power of attorney, reasoning that no one should be given such power over their financial affairs unless they are totally incompetent. If they have such a lack of trust for the attorney in fact, why are they executing a power of attorney in the first place? One would think that even more trust would be required when the principal is incompetent and has little influence over the attorney in fact. Finally, simple measures can be taken to avoid disasters before incapacity. Consider sealing a copy of the durable power of attorney in an envelope labeled "do not open until my incapacity." In addition to oral instructions, this can help to avoid the scenario of a run-away attorney in fact who uses the power of attorney to access financial accounts before incapacity.

Third Lesson: What powers should the Attorney-in-Fact be given?

The powers given to an attorney in fact depend upon the principal's desires and the particular concerns that stem from the types of assets held. The durable power of attorney should be coordinated with the will, trust and advance health care directive to ensure that they do not contradict each other. Namely, should the attorney in fact have the power to create trusts? To rescind or amend existing trusts? Should the attorney in fact have a power to make gifts to himself or to others? These powers can help ensure that preparation for long term care (medical) or tax planning can take place even after incapacity. Before executing a power of attorney, individuals should be fully informed of the powers that they are granting, and the possible consequences of such sweeping grants of power. In all cases, it's best to consult with an attorney who can advise on specific risks.

Conclusion

Durable Powers of Attorney are one of the five essential documents in estate planning discussed in this article series. Unlike a will or trust, which mostly deals with decisions that are made upon one's death, the durable power of attorney deals with life-time financial management and estate planning questions. Individuals should be aware of the risk in waiting to execute the power of attorney; the hazards of "springing" powers; the range of powers that can be given to the attorney in fact; and the risks associated with a sweeping grant of authority to the attorney in fact. --

This article is intended to provide general information about estate planning strategies and should not be relied upon as a substitute for legal advice from a qualified attorney. Treasury regulations require a disclaimer that to the extent this article concerns tax matters, it is not intended to be used and cannot be used by a taxpayer for the purpose of avoiding penalties that may be imposed by law.

Article Source: http://EzineArticles.com/expert/John_C._Martin/176675

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Sunday, February 16, 2020

Probate and Administrative Process, Know Your Rights


Probate is the system in which the court's system's method of processing the estates of a dead person. It is a legal document that enables the administration of the estate of the deceased. It allows for the resolving of claims and distribution of the deceased's will. Any grievances surrounding a deceased person's estate are filed in the probate court also known as the surrogate court. Once probated, the will becomes a legal instrument that can be enforced by the executor.

Administration process

Administration process of an estate on the other hand is the process by which the deceased person's assets are collected, maintained and distributed. An estate administrator sees to the proper administration of the will.

The Probate process

The probate process begins after the death of a person. An interested person files an application to administer the estate; a fiduciary is then appointed who is to administer the estate and at times may be required to pay a bond to safeguard and to insure the estate. Creditors are notified and legal notices published. There may be filed a petition to appoint a personal representative may need to be filed and letters of administration obtained. All these processes must be done in accordance with the limitation clause.

Property that avoids probate

Property that passes to another person contractually upon the death of a person does not enter probate for example a jointly owned property with rights of survivorship. Property held in a revocable or irrevocable trust that was created when the grantor's was still alive does not also enter probate. In most of these cases the property is distributed privately and without many issues thus no court action is required.

What happens in the probate and administrative process?

After a probate case has been filed in court, an inventory is entered and the deceased's property collected. The debts and taxes are paid first then the remaining property distributed to the beneficiaries. The probate and administrative process may be challenged at any time as a whole or part of it. The issues that arise during such hearings include will contests and paternity issues and these have to be solved before the matter is decided.

The need for the appointment of an administrator arises where the deceased left no will, some assets are not disposed of by the will, in cases where there is a will however, the case goes to probate directly. The estate administrators act like will executors but where the will does not state how to distribute of property, they follow the laid down laws.