Estate Planning

The Importance of a Healthcare Proxy

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An important topic that often goes overlooked is the significance of having a healthcare proxy. I wanted to take a moment to discuss the importance and benefits of having a healthcare proxy in place.

A healthcare proxy, also known as a medical power of attorney, is a legal document that allows you to appoint someone you trust to make medical decisions on your behalf in the event that you are unable to do so yourself. This person, known as your healthcare agent, will ensure that your wishes and preferences regarding medical treatment are respected and followed.

There are several key benefits to having a healthcare proxy:

  • Peace of mind: Knowing that you have designated someone to make medical decisions for you can provide a sense of comfort and peace of mind, especially during times of uncertainty or in the event of a medical emergency.
  • Ensuring your wishes are honored: By appointing a health care agent, you can ensure that your personal values, beliefs, and preferences regarding medical treatment are respected and followed, even if you are unable to communicate them yourself.
  • Reducing family conflicts: Having a health care proxy in place can help prevent disagreements among family members regarding medical decisions, as your designated agent will have the authority to make decisions on your behalf.
  • Continuity of care: Your health care agent will work closely with your medical providers to ensure that your treatment plan is carried out consistently and in line with your wishes.

It is important to note that a healthcare proxy is not just for the elderly or those with chronic illnesses. Accidents and unexpected medical emergencies can happen to anyone at any age. By having a healthcare proxy, you are taking a proactive step to ensure that your wishes are respected, regardless of your current health status. I strongly encourage you to consider creating a healthcare proxy to protect your interests and ensure that your medical decisions are made according to your wishes. It is a simple yet powerful step towards ensuring that your medical wishes are respected in the event of an emergency.

If you have any questions or need assistance in creating a healthcare proxy, please do not hesitate to reach out. Our firm is here to help. You can reach out to us through ravosalaw.com.

This is only intended to be information and does not constitute legal advice, nor does it create any attorney-client relationship with the firm.

The Benefits of a Trust Fund

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There are significant benefits of establishing a trust fund. A trust fund can be an invaluable tool for managing and preserving wealth for both individuals and families.

While the need for a trust fund may vary depending on individual circumstances, there are several situations where it can be particularly beneficial:

  • 1. Minors or individuals with special needs: A trust fund can ensure that the financial needs of minors or individuals with special needs are met, even in the absence of their parents or guardians.
  • 2. High net worth individuals: Those with significant assets can use a trust fund to protect their wealth, manage tax implications, and ensure a smooth transfer of assets to future generations.
  • 3. Business owners: A trust fund can help business owners protect their business assets, plan for succession, and provide for their families in case of unforeseen circumstances.
  • 4. Charitable giving: Establishing a trust fund can facilitate philanthropic endeavors, allowing individuals to support causes they care about and leave a lasting impact.

One of the key advantages of a trust fund is the ability to protect and control assets. By placing assets into a trust, you can ensure that they are safeguarded and managed according to your specific wishes. This can be particularly beneficial for individuals who want to provide for their loved ones or support charitable causes even after they are no longer around.

Another advantage of a trust fund is the potential for tax savings. Depending on the type of trust and the jurisdiction, you may be able to minimize estate taxes, income taxes, and capital gains taxes. This can help to maximize the value of your assets and provide more for your beneficiaries.

Furthermore, a trust fund offers privacy and confidentiality. Unlike a will, which becomes a matter of public record after probate, a trust allows for the discreet transfer of assets without the need for court involvement. This can help to maintain the privacy of your financial affairs and protect your family’s sensitive information.

Lastly, a trust fund can provide flexibility and customization. You have the ability to set specific conditions and instructions for the distribution of assets, ensuring that your wishes are carried out precisely. This can be particularly useful for individuals with complex family dynamics or unique financial goals.

In conclusion, a trust fund offers numerous benefits, including asset protection, tax savings, privacy, and customization. If you are interested in exploring the possibilities of establishing a trust fund, I would be more than happy to discuss this further with you.

Thank you for your time, and please do not hesitate to reach out to our firm if you have any questions or would like to schedule a consultation.

This is only intended to be information and does not constitute legal advice, nor does it create any attorney-client relationship with the firm.

Make A Will Month

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August is Make a Will Month. This is your reminder about the importance of creating and updating your estate planning documents. 

Even though soaring inflation has caused one in four Americans to recognize a greater need for estate planning, the unfortunate reality is that only 34.1% of Americans have a will in 2023, and even fewer have an up-to-date will. 

In light of that, below I’ve shared five ways an up-to-date will ensures your family is protected in the event something happens to you:

  1. Distributing assets – A will outlines how you want your assets, including digital assets, to be distributed after your death and allows you to specify who gets what, how much, and when.  
  2. Appointing executors – A will also enables you to name an executor to manage your estate after your death. This person will distribute your assets according to your wishes, pay any debts or taxes owed, and handle other administrative matters.
  3. Avoiding disputes – Without a will, your assets will be distributed according to state law, which may not align with your preferences. This can lead to confusion, disputes, and even legal battles among family members.
  4. Providing for minor children – If you have minor children, a will allows you to name a guardian to take care of them in the event of your death, ensuring your children will be provided for and raised according to your wishes.
  5. Minimizing taxes – A properly drafted will also help minimize estate taxes and other expenses that may be owed after your death.

To ensure all of the above elements are updated, your will should be reviewed every three to five years or sooner if you’ve undergone significant life changes (e.g., marriage, divorce, birth of children).

With that said, please feel free to reach out if you’d like assistance with any estate planning needs or updates. In the meantime, I hope you and your family have a wonderful end to summer!

Estate Planning Mistakes

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  • Failing to include power of attorney – A power of attorney names someone you trust who can act in your stead should you become medically incapable of making important financial, legal, and/or medical decisions. 
  • Misunderstanding your estate plan  It’s critical you take the time to read through and understand the plan, what it entails, and what will happen when it is put in motion. 
  • Forgetting to update it as circumstances change – Our lives evolve constantly, and it’s important that your estate plan reflects changes. I have dealt with estates where assets and money were left to ex-spouses or deceased family members. Additionally, I have seen feelings hurt by a family member who was left out of the document because they married into – or were adopted into – the family after the plan was created. It is vitally important that you revise your plan at least every five years to make sure your wishes are reflected and followed.
  • Failing to fund revocable trusts – Many estate plans include a revocable trust. Assets owned by the trust are protected from being tied up in probate court. Your attorney will draw up the appropriate paperwork, but you will need to transfer the relevant assets to the trust. For example, your house will need to be owned by the trust and not by you individually. Many clients fail to realize this and skip this important step, negating the work they did in creating the trust in the first place.

The best way to avoid mistakes is to talk to a lawyer. Contact us today about your estate planning needs.

Beneficiaries – What You Should Know

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Beneficiaries come into play when thinking about the future and who your assets will go to–things such as money in the bank, retirement accounts, investments, and life insurance policies. Put simply; a beneficiary is the person (or people) you name to inherit what you leave behind. So how do you choose the proper beneficiary, and what does the designation entail? Here’s what you need to know:

Choosing a beneficiary

  • As you consider a beneficiary, narrow down your list. Ask yourself: Does anyone depend on you financially? Are you married? Do you have children? There are no rules, and at the end of the day, it’s completely up to you.
  • Keep in mind that for some assets, there are two types of beneficiaries: primary and contingent. A primary beneficiary is the person first in line to receive the benefit. A contingent beneficiary serves as a backup should your primary beneficiary pass before or at the same time as you. 
  • Children under age 18 can be primary or contingent beneficiaries. However, if you pass while they are minors, your assets will transfer to the guardian of the minor child’s estate.
  • If you need to change your beneficiaryfollowingdivorce, remarriage, or after the death of a loved one, you can. Just contact your employer, financial professional, or financial services company, depending on the asset type. 
  • If you don’t designate a beneficiary, it may be unclear who inherits your assets, forcing family into a lengthy, expensive, and tiresome probate process.
  • One more note—beneficiaries don’t have to be a person. Many wills and trusts name charities or organizations as beneficiaries.

Role of a beneficiary

  • Unlike an executor (in the case of a will), a beneficiary has a minimal role in the administration process, regardless of the asset. In most cases, the beneficiary can sit back and wait patiently for their benefit to arrive.
  • However, suppose an executor fails to administer the estate or doesn’t meet the responsibilities and duties. In that case, beneficiaries can and should take action to ensure that they receive their inheritance fairly.
  • Beneficiaries pay nothing to the executor or anyone else to receive their inheritance from the estate.

Let me know if you would like to discuss your asset and estate planning further. I’m happy to offer guidance and support so you can have peace of mind that your plans are in order.

Estate Planning Post-Divorce

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There’s no question that navigating a divorce can be extremely difficult; there are a handful of important considerations to keep in mind as the dust settles–one of them being your estate plan.

We thought we’d share some insights on a few of the steps to take regarding estate planning after divorce papers have been finalized.  

1. Update Will and Trust 

Many married couples have a will or trust that benefits their spouse–and even though the marriage is over, those provisions are usually still in effect until you say otherwise. You’ll need to revoke your existing will or trust and update it to remove your ex-spouse and assign a new heir (or heirs).

If you have children under 18, you’ll also need to assign a guardian in the event that you pass away. Typically the surviving parent will get custody of the kids even if you’re divorced, but if they too pass away or are deemed unfit for any reason, you’ll want to have another guardian named. The guardian may also control any money you leave to the kids until they become legal adults, which is something to keep in mind.

2. Redesignate Beneficiaries

Many people name their spouses as beneficiaries on life insurance policies, bank accounts, and retirement funds. These types of assets are distributed directly to the beneficiary when you pass away, rather than going through probate court. You’ll need to update your beneficiary forms to remove your spouse and designate a new person to receive those assets. This is typically as simple as requesting a new form from the institution.

3. Reassign Powers of Attorney 

It’s common for married couples to give one another medical and financial powers of attorney in the event that one spouse is unable to make health-related or financial decisions for themselves. After getting divorced, you may not want that responsibility to remain with your ex. We can easily revoke the powers of attorney and choose someone more suitable, like a sibling or child, to replace them.

If you have any questions about this information or would like advice about your estate plan, give us a call! Visit us at ravosalawoffices.com for our practice areas and contact information.

Types of Power of Attorney

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We want to share some info on power of attorney (POA) documents with you. POA is a legal document that allows an individual (referred to as the principal) to give someone else (an agent or attorney-in-fact) the authority to handle their affairs. 

There are several different types of POA, distinguished by the amount of power granted to an agent and the circumstances under which they can exercise it. I’ll give you an overview of the main ones.

To start, there are POAs categorized by when they become active and for how long:

  • Durable POA: A durable POA becomes active as soon as it’s signed and continues in perpetuity unless the principal cancels it or passes away. In the event that the principal is incapacitated and unable to make decisions, the agent still has the authority to make decisions on their behalf.
  • Non-Durable POA: This document goes into effect immediately as well, but unlike a durable POA, it ends if the principal becomes incapacitated or unable to make sound decisions.
  • Springing POA: A springing POA goes into effect only under certain conditions, not immediately when signed. Generally, this is when a medical professional determines that the principal is incapacitated or is not of sound mind.

POAs can also be categorized by the amount of power granted to an agent:

  • General POA: This type of POA gives an agent a broad range of authority when it comes to handling affairs, including those related to finances, investments, business decisions, property, taxes, legal documents, and more.
  • Limited POA: A limited POA grants an agent a much more narrow, specific set of powers that are outlined in the legal document. For example, someone may want someone to handle certain business operations or property management for them, but nothing more. The agent is limited to the conditions of the POA.

Finally, there are POAs that grant a specialized focus of powers to an agent:

  • Medical POA: Also referred to as a healthcare POA, an agent is allowed to make medical decisions on the principal’s behalf. This is important in the event the person becomes incapacitated, experiences severe illness or injury, becomes disabled, or other serious health-related situations that impairs their ability to make decisions.
  • Financial POA: Under this POA, an agent is authorized to manage an individual’s finances. It can be used in situations when a principal simply wants someone else to handle their affairs when they’re not present or when they are unable to due to a mental or physical condition.

When done properly, POAs can ensure that your affairs are handled the way you want in the event of extenuating circumstances or when you’re unavailable. 

If you have questions or believe you and your family may need a power of attorney or other estate planning documents, reach out to us. All of our contact information is at RavosaLawOffices.com, or call us today for a consult at 617-720-1101.