A Last Will and Testament is an instrument that directs how your property will be distributed at the time of your death. The Will nominates an individual or institution to act as a Personal Representative. The Personal Representative (also referred to as an Executor) will administer the probate by representing your estate and carrying out your wishes.
The Last Will and Testament directs the distribution of property left in your name, individually. Not all property is subject to probate and distributed in accordance with the term of your Will. Probate property only includes assets that are in your own individual name. Many types of property pass outside of probate. Jointly-owned property, property in trust, life insurance proceeds and property with a named beneficiary, such as IRAs or 401(k) plans, all pass outside of probate and will not be subject to probate.
With a will you can direct where and to whom your estate (what you own) will go after your death. If you died intestate (without a will), your estate would be distributed according to South Carolina’s laws of intestacy, going to your family members in an order of distribution. The laws of intestacy in South Carolina provide that, if you are married with no children, all the property will pass to your surviving spouse. If you are married with children, one-half of the property will pass to your surviving spouse, and one-half will be divided among your children. Such distribution may or may not accord with your wishes.
Many try to avoid probate by holding all of their property jointly with their children. While this can work in some situations, it can also open up your estate to liability. For example, if you own your house jointly with your child, and your child is sued, your property could be involved in that law suit. Also, putting a child on a house or bank account disrupts the distribution plan – meaning that the account pay pass automatically to the child and not to the beneficiaries named under you Will. There are also various tax reasons for not creating jointly help property, as well.
The second reason to have a will is to make the administration of your estate run smoothly. Often the probate process can be completed more quickly and at less expense to your estate if there is a will. With a clear expression of your wishes, there are unlikely to be any costly, time-consuming disputes over who gets what.
A Durable Power of Attorney (DPOA) gives financial and legal authority to the agent of your choice in the event of your incapacity. A DPOA is a substitute for a court-appointed conservatorship, an expensive and time consuming proceeding at probate court. As the DPOA can help your family avoid a conservatorship, it can be the most important estate planning document available.
Generally speaking, a DPOA allows an agent to stand in your shoes to make financial decisions for you should you become incapacitated. You can authorize your agent to do almost anything that you can do yourself. Typically, your agent has a broad list of powers that enable them to sign checks, open bank accounts, sell assets, prepare tax returns, apply for loans, etc.
The most important matter is naming the correct agent. Clearly, the person must be someone in whom you have implicit faith and trust. But this alone may not be enough. Is the person you have in mind available, and if so, would he or she be willing to serve if called upon? Does he or she have the specific experience required to manage your business or investments? What if the person you have in mind is unable to serve when called upon even though expressing a willingness to serve now? Picking the first person who comes to mind is not always the answer.
It is important to consider whether this person has a conflict of interest to your own interests. In addition, you will need to name a back-up agent to serve, in the event the primary agent is unwilling or unable to serve as your attorney-in-fact.
You must make decisions as to whether the power of attorney is effective upon its execution (when you sign the document) or if the power of attorney is effective upon your incapacity. Incapacity must be certified in writing by two independent license physicians. You may have a hybrid – meaning that the power is effective immediately for your spouse but is effective for your children upon your incapacity.
The use of a Durable Power of Attorney can be difficult at times. The DPOA needs to be recorded in the county where you reside, at the RMC office. Some financial institutions do not like durable powers of attorney – the power effectively gives someone the ability to steal. A certain amount of caution on the part of financial institutions is understandable. When someone steps forward claiming to represent the account holder, the financial institution wants to verify that the attorney-in-fact indeed has the authority to act for the principal. Still, some institutions are too stringent, some not even obeying any power of attorney at all.
In conclusion, the Durable Power of Attorney provides a flexible means of dealing with financial and personal decisions and may avoid the expense of guardianships. This is the first step in incapacity planning, though further options are available such as the revocable living trust.
A Living Will is a “dying declaration” that states your specific intentions on when you would like your life to end.
A living will announces the maker’s intent that nutrition and hydration can be withdrawn or withheld in two limited circumstances: 1) a terminal condition and you are likely to die in a short time period; 2) being in a persistent vegetative state. Two physicians must separately examine the patient, certify the condition as terminal and document the same on the patient’s records to allow enforcement of a living will.
It is advisable to give a copy of this document to your treating physician so that it is kept on record. Also, if you are being admitted to the hospital for a surgery, you should bring a copy of this document for the hospital to keep in your file. You may consider giving a copy of the document to the agent named under the health care power of attorney, as it will be your agent’s responsibility to carry out your wishes should you become incapacitated.
A Health Care Power of Attorney gives the agent of your choice the ability to make health care decisions for you at any time you are unable to make those decisions yourself, or when you are unable to communicate a willing and knowing health care decision. This is very important to the privacy laws that exist today.
The Health Care Power of Attorney names agents to act on your behalf should you become incapacitated, but only during periods of mental incapacity. Meaning, once you regain capacity, the agent does not have the authority to continue making decisions for your. In addition, the Health Care Power of Attorney allows you to direct whether or not your agent has the authority to donate your organs, consent to life sustaining treatment, and tube feeding.
Naming the correct agent should not be a decision taken lightly. As many have experienced, the decision to withhold life-sustaining treatment can be extremely difficult. Your agent must have the will-power and fortitude to follow through with your wishes, even against the objections of family members. Again, you need to discuss your wishes with your agent to make sure they are clear on your health care desires.