MVP Law Group, P.A. makes available the information and materials in this forum for informational purposes only. The information is general in nature and does not constitute legal advice or any contractual obligations. Further, the use of this site, and the sending or receipt of this information, does not create an attorney-client relationship between us. And, therefore, your communication with us through this forum will not be considered as privileged or confidential.
Question #1 – Power of Attorney
How does it work? How is it supposed to work?
Answer #1
A Power of Attorney (POA) is effective as soon as the Principal signs it, unless the Principal states that it is only to be effective upon the happening of some future event. A POA is one of the strongest legal documents that an individual can give to another person. A POA can be used to create new debts, buy or sell property, and deplete your bank account. It is important to remember that YOU will be held responsible for the acts of your agent. Thus, you must exercise great care in choosing your agent. A POA will be accepted as valid for most purposes. However, there are some actions that cannot be accomplished by using a POA because these actions are so personal in nature they cannot be delegated to another. In addition, some businesses require a power of attorney to be in a certain form or be recorded. For example, your bank may accept only a special power of attorney with the account number specifically listed. Whenever possible, you should check with the business before obtaining or using a power of attorney to be sure it will be accepted.
After being certain that the POA gives you the authority to do what you want to do, take the Power of Attorney (or a copy) to the third party. Explain to the third party that you are acting under the authority of the POA and are authorized to do this particular act. Some third parties may ask you to sign a form stating that you are acting properly. If it states something that you do not understand in your capacity as Agent for the Principal, you may wish to consult your attorney prior to signing it. The third party should accept the POA and allow you to act for the Principal. When acting as an Attorney-in-Fact, always make that clear when signing any document. The new Statutory Power of Attorney Act which took effect October 1, 2011 was created in order to assist individuals when presenting POAs to third parties, a standard form was drafted to be accepted across the board.
Question #2 - Trusts
What kind of protections can I get if I create a trust rather than a standard last will and testament?
Answer #2
A trust can give you:
•Control--by protecting your beneficiaries from fraud or mismanagement of your assets, especially in case of your disability or death.
•Continuity--by continuing to manage your assets appropriately if you encounter a life-changing event.
•Privacy--by keeping your affairs out of the public record. A will becomes a public record when it's filed with a probate court upon your death, so if you use just a will for estate planning, anyone can access it. However, almost with any trust, an experienced Estate Planner would recommend a pour-over will for the applicant to cover anything and everything not placed in the trust.
•Tax advantages--by distributing your assets in a way that minimizes your tax burden, or that of your beneficiaries.
There are many types of trusts, each designed to accomplish specific goals. Trusts can be great tools, but they're complex, so it's important to understand how they work and how to get started.
Question #3 – Advance Directive/Living Will/Health Care POA
My daughter insists that I draft the necessary documents to protect my wishes concerning my health before I die. From my understanding, I’m going to need a living will and health care power of attorney in order to explain my health care wishes to my family/friends/doctors, etc. Can you firm draft these documents for me?
Answer #3
The State of Maryland has combined the living will and health care power of attorney and uses the term “Advance Directive”. Our firm will be able to draft the advance directive for you.
Living Will - A living will allows you to leave instructions for your health care treatment. It usually provides specific directions about the course of treatment that is to be followed by health care providers and caregivers. A living will may be general or very specific, a specific living will may include information regarding an individual's desire for such services such as analgesia (pain relief), antibiotics, hydration, feeding, and the use of ventilators or cardiopulmonary resuscitation.
Health Care Power of Attorney - A health care poa authorizes someone appointed by you to make decisions on your behalf concerning your health care when/if you are incapacitated.
Advance Directive –An advance directive is your life in your terms. It allows you to document your wishes concerning your health care. It is effective upon signature when signed in front of the required amount of witnesses.
Question #4 – Wills
Difference between a small estate and a regular estate.
Answer #4
Regular estate – the estate procedure for a decedent who owned probate assets with a gross value in excess of $30,000 (or $50,000 if the sole heir or legatee is the surviving spouse)
Small estate – the estate procedure for a decedent who owned probate assets with a gross value of $30,000 or less (or $50,000 or less if the sole heir or legatee is the surviving spouse)
Question #5 - Advance Directive/Living Will/Health Care POA
What can you plan for in your Living Will/Health Care POA?
Answer #5
An Advance Directive normally involves these types of issues:
•Admission and/or Discharge from Hospital, Hospice, Nursing Home, or other medical facility;
•Request to Receive Protected Health Records as your Personal Representative under HIPAA;
•Withholding/WithdrawingLife-Prolonging Procedures;
•Withdrawing Food & Water (Artificially Administered Nutrition & Hydration);
•Palliative Care;
•Authorizing Organ, Tissue or Body Donation;
•Authorizing an Autopsy;
•Authorizing Disposition of Your Remains;
•Nominating a Guardian;
•Pregnancy (you may indicate whether or not you want Health Care directions carried out in the event of your pregnancy).
However, with an Advance Directive, you may specify your care for different situations, or if you wishes are simple, you may leave all decisions to your health care agent to act in your best interest.
Question #6 – Prenuptial Agreement
Should I get a prenuptial?
Answer #6
Prenuptial agreements used to be looked down upon; however, they now are becoming more acceptable in our society. You should consider entering into a prenuptial agreement if: (i) you have children from a previous marriage; (ii) you own significant amounts of property; (iii) have previously been married; (iv) have a salary over $100,000; or (v) own a business and/or family business. There are four main purposes of a prenuptial agreement: (1) to avoid costly litigation; (2) to protect family and/or business assets; (3) to protect against creditors; and (4) to give you assurance that marital property will be disposed of properly. If you do not have a prenuptial, the State of Maryland will divide the assets of the marital union based on an equitable distribution, equitable does not necessarily mean “equal,” in the event of a divorce.
Question #7 – Trusts
What exactly is a Testamentary trust?
Answer #7
A testamentary trust is created by a will. The will itself contains language that creates the trust and since a will does not become effective until death, the trust does not exist until death. Testamentary trusts are distinguished from inter vivos trusts which are created during the settlor's lifetime. In practical terms, testamentary trusts tend to be driven more by the needs of the beneficiaries (particularly infant beneficiaries) than by tax considerations, which are the usual considerations in inter vivos trusts. A testamentary trust provides a way for assets devolving to minor children to be protected until the children are capable of fending for themselves. The trustee is required to meet with the probate court regularly and prove that the trust is being handled in a responsible manner and in strict accordance with provisions of the will which created the trust. The trustee must be prepared to oversee the trust for its duration, which involves a considerable commitment in time, possible emotional attachment, and legal liability.
Question #8 – Post-marital Agreement
What is a Post-Marital Agreement?
Answer #8
A post-martial agreement is an agreement made between spouses after marriage. The post-martial agreement is similar to the pre-nuptial agreement; however, it is entered into after the marriage of the parties, and normally when circumstances have changed. It is a way for couples to legally resolve property distribution matters, divide debt, and provide for or deal with children. The agreement must be in writing and signed freely and voluntarily by both parties, with fair and reasonable terms free from fraud and duress to be enforceable in court. The agreement may provide specific financial benefits to ensure that if your spouse fails to live up to their end of the agreement, a court will enforce it.
Question #9 – Prenuptials
Should I have my own Attorney for my prenuptial agreement?
Answer #9
YES, absolutely. Each party to the marriage should seek independent counsel before entering into a prenuptial agreement so that there is full and frank disclosure, a full understanding of the rights, duties and responsibilities of the parties to the agreement, and to ensure that the agreement is free from duress and fraud. If one party seeks counsel and the other does not, and the terms of the agreement are unfavorable to one party, the entire agreement may be considered unenforceable in a court of law.
Question #10 - Wills
I am concerned about my grandmother’s competency. What are the requirements to make a Valid Will?
Answer #10
To make a will anywhere, the maker must be: At least 18 years old, of sound mind,free from duress, coercion; and able to completely understand the property they own, its value, and who they wish to leave it to upon their death.
MVP Law Group would like to thank everyone who contributed a question or comment.
Our next “Estate Planning Q & A Forum” is scheduled for Friday, September 9th, 2011!
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