When it comes to aging and caregiving, the most important legal documents concerning medical decisions are Advanced Directives.
Advanced Directives are legal documents that spell out how a person wants medical decisions to be made in the event that they are no longer able to make their own. The most common examples are Living Will and Medical Power of Attorney.
Two other legal documents that describe a person’s health care wishes, but are not advance directives, are Physician Orders for Life-Sustaining Treatment (POLST) and Do Not Resuscitate (DNR) Orders.
When it comes to aging and caregiving, the most important legal document concerning financial decisions is the Last Will and Testament.
A Last Will and Testament spells out how a person’s assets should be distributed after they die. An asset is anything with value that is owned, such as property, vehicles, jewelry, stocks, and retirement accounts. An individual’s estate is the total value of all their assets. In a Last Will and Testament, an executor is named. The executor, usually a close friend or trusted attorney, will handle the distribution of assets to beneficiaries and pay any necessary taxes. When a person dies, the court process of probate verifies that the Last Will and Testament is valid. If the person did not have one, the court would appoint an executor and decide on asset distribution.
There are some assets that cannot be included in the Last Will and Testament, collectively called non-probate assets. This includes, but is not limited to, life insurance payouts, retirement accounts, and assets held in a trust. For each of these assets, beneficiaries must be named separately. Ensuring the right beneficiaries are named is one part of estate planning.
In some cases, a trust can be used instead of a Last Will and Testament to dictate who will inherit assets while avoiding the probate process. However, trusts are generally more complicated, so consult a professional for more information on the different types of trusts.
Similar to the Medical Power of Attorney, a person can also spell out who they want to manage their financial matters if they become unable to do so in a Financial Power of Attorney.
Lastly, a guardian is a person who has been given legal authority to care for another person and make decisions on their behalf. Depending on the terms of the guardianship and state rules, a guardian may be permitted to make both medical and financial decisions. It is not uncommon for adult children to become legal guardians of their aging parents if necessary.
To find a local elder law attorney, consider searching for one by zip code at www.naela.org/findlawyer.
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