The "Big Five" Life Planning Essentials


All good estate plans include the following key components:

1. The Durable Power of Attorney

A durable power of attorney appoints one or more trusted persons to handle financial and legal matters on behalf of another “just in case” the need arises. Without getting into the details of the language or the formalities for validity, critical issues addressed by a power of attorney include:

  • Who will act on your behalf.
  • Types of powers you will give them.
  • Sufficient flexibility to protect you and your assets.

2. Designation of Health Care Surrogate & Advance Healthcare Directive

A designated health care surrogate makes health care decisions for a patient when a doctor finds that a patient cannot. A surrogate should be knowledgeable of healthcare, aware of the patient’s personal preferences and providers, and readily accessible in an emergency. The advance healthcare directive provides the surrogate with your healthcare preferences, desires and wishes and is also known as a “living will.”

3. Medical Privacy Releases

A medical information privacy release is needed to authorize medical practitioners to release HIPAA-protected medical information as authorized by a patient. A health information waiver allows authorized persons to communicate about patient care with medical personnel anytime. Transparency, communications and coordination in healthcare can be lifesaving to a patient.

4. A Will

A will determines who gets what when after someone’s death and designates an individual to oversee the probate process. Wills do not impact non-probate assets which typically include: jointly titled bank accounts; retirement plans; life insurance policies; trust assets; and marital property. Generally, only non-homestead assets owned in a person’s individual name pass under a will. Wills require strict legal formality with specific transfer terms. Non-probate assets, however, can transfer by the simple written designation of a beneficiary or joint owner.

Wills are helpful to distribute personal items like furniture, jewelry, tools, clothing, boats and cars, stocks, bonds and business interests. And a will nominates the personal representative who will act as the executor of the estate. Wills can appoint standby guardians for minors and disabled children, leave gifts to charity and provide for the care and custody of pets.

5. Avoiding Probate – Trusts & Enhanced Life Estates

Avoiding probate entirely is often the most cost effective option. Revocable or “living” trusts and Enhanced Life Estate Deeds, (a/k/a “Lady Bird” deeds) are helpful planning tools. Trusts are flexible in terms depending on their purpose and can be easily changed as life circumstances change. An enhanced life estate deed allows a Florida property owner to transfer property to others upon death without sacrificing control over the property during the owner’s life. Unlike assets held in revocable trusts, assets transferred enhanced life estate deeds are disregarded by government healthcare agencies for eligibility determinations. Critical care must be taken in drafting trusts and life estates to preserve the homestead property tax exemption.

Estate planning can prevent high legal bills and unnecessary time delay in court while at the same time preserving families and assets. That makes a good future even better.