FAQ's

• What are Estate (Death) Taxes?
• What about Health Care Provisions and Powers of Attorney?
• How does a trust work?
• What is the difference between a Revocable Trust and an Irrevocable Trust?
• What types of Wills are available?
• What is estate planning?
• What is a Power of Attorney?
• What is a Durable Power of Attorney?

What are Estate (Death) Taxes?
Estate tax may apply to your taxable estate at your death. Your taxable estate is your gross estate minus allowable deductions. Your gross estate includes the value of all property in which you had an interest at the time of death, and will also include the following:

• Life insurance proceeds payable to your estate or, if you owned the policy, to your heirs
• The value of certain annuities payable to your estate or your heirs
• The value of certain property you transferred within 3 years before your death
• Trusts or other interests established by you or others in which you have certain powers

• Funeral expenses paid out of your estate
• Debts you owed at the time of death
• The marital deduction--generally, the value of the property that passes from your estate to your surviving spouse

What about Health Care Provisions and Powers of Attorney?
The State of Kansas extends the delegation of decision-making power to cover health care issues, including the withholding or withdrawal of life support treatment, by means of a Power of Attorney for health care. This Power of Attorney gives you the right to designate an agent who can make treatment decisions for you in instances where communication is impossible because of your medical condition.

In addition to health care considerations, it is also important to have a power of attorney available to handle various legal and financial matters in the event you become mentally incompetent. For example, a surviving spouse can be given a Power of Attorney to handle an incompetent spouse's salary checks and Social Security benefits.

How does a trust work?
Trusts are the process by which the grantor transfers legal ownership to a person or institution (the trustee) to manage the property for the benefit of another person (the beneficiary).

Trusts create a fiduciary relationship between the trustee and the beneficiary. The trustee must act solely in the best interests of the beneficiary when dealing with the trust property, and the trustee is legally accountable to the beneficiary for any damage to his or her interests. The grantor may act as the trustee him- or herself (retaining ownership instead of transferring the property, and may also name him- or herself as one of the beneficiaries of the trust.

What is the difference between a Revocable Trust and an Irrevocable Trust?
A Revocable Trust is where the Grantor can change the terms of the Trust or even revoke the Trust altogether and take back all of the assets in the Trust. An Irrevocable Trust is where the terms of the Trust cannot be changed (i.e., the beneficiary cannot be changed), and that whatever assets are placed in that Trust cannot be withdrawn by the Grantor.

What types of Wills are available?
There are many types of Wills:

• A Double Will is one in which two people join together, leaving their individually-owned property and estate(s) to the other. This type of Will is also called a Counter Will, Joint and Mutual Will, or Reciprocal Will.
• Holographic Wills are entirely handwritten, dated, and signed by the testator.
• A Living Will, Medical Directive or Health Care Directive is one that authorizes the continuance or cessation of life-sustaining medical treatments from an individual who is incapable of making that decision due to debilitating circumstances.

What is estate planning?
Estate planning is a process to consider alternatives for, to think through, and to set up legally effective arrangements that would meet your specific wishes if something happens to you or those you care about. Good estate planning is more than just a simple Will. Estate planning also typically minimizes potential taxes and fees, and sets up contingency planning to make sure your wishes regarding health care treatment are followed. On the financial side, a good estate plan coordinates what would happen with your home, your investments, your business, your life insurance, your employee benefits (such as a 401K plan), and other property in the event you became disabled or if you die. On the personal side, a good estate plan includes directions to carry out your wishes regarding health care matters, so that if you ever are unable to give the directions yourself, someone you select would do that for you, and know when you would want them to authorize heroic measures and when you would prefer they pull the plug.

What is a Power of Attorney?
Powers of Attorney are governed by the law of agency, a branch of common law concerned with the delegation of power from one person, generally called the principal, to another, called an attorney-at-fact or agent.

When a person becomes incapacitated, the government or the court often steps in and appoints someone to represent and make legal decisions that the person would have to take. One of the ways to avoid government or court intervention, and the appointment of a stranger to act as your guardian, is to use a Power of Attorney. A Power of Attorney is a written document stating that one person gives to another the full power and authority to represent him or her. It must be signed by both the attorney and the principal, witnessed by two people and notarized.

What is a Durable Power of Attorney?
A durable power of attorney is a form of agency. The person who gives the power is the principal, and the person who receives the power is the attorney-in-fact or agent. Durable in this context means that the agent`s power will survive the principal's incapacity or disability. As a result, a Durable Power of Attorney can be used as an alternative to guardianship in some states under certain circumstances, provided the principal executed the document before losing capacity. There are two types of Durable Power of Attorney: Financial Durable Power of Attorney and Healthcare Power of Attorney. The difference between the two is the authority granted to the agent, as described below:

The Financial Durable Power of Attorney is also known as a General Durable Power of Attorney. The agent`s authority to act for the principal under a Financial Durable Power of Attorney is based on the powers that the principal gives to the agent. Whether broad, general powers or limited, the specific powers given to the agent are completely determined by the principal. Among other things, the principal may delegate to the agent in the Financial Durable Power of Attorney the authority to make deposits and withdrawals from his/her checking account, to file his/her tax returns, and to sell his/her home. However, there are a few powers that the principal may not delegate. For example, the agent cannot prepare a Will, vote, or seek a divorce on the principal`s behalf. If the agent has a financial interest in the subject matter of the power of attorney, the power is generally irrevocable. Most senior citizens who execute Durable Powers of Attorney are getting assistance with their day to day personal affairs and their agents do not have an ownership interest in the senior`s property which would preclude revocation. In addition, revocation can be by implication, in addition to, destruction of the document or express revocation by the principal.

A Healthcare Power of Attorney specifically grants authority to the agent to make decisions about and relating to medical treatment. For example, the agent may consent to treatment, refuse to consent to treatment, or withdraw consent to treatment. In addition to these decisions directly about medical treatment, the agent may make all arrangements at any hospital or nursing care facility, employ or discharge care personnel, request, receive, and review any information about the personal affairs or physical or mental health of the principal. In preparing a Financial or Healthcare Durable Power of Attorney, the principal must sign the document in the presence of two qualified witnesses, and it must be notarized. As laws vary from state to state, it would be in your best interest to consult an Estate Planning attorney in your area if you want more information about Powers of Attorneys.

If you or someone you know in Long Island or New York City needs the assistance of an experienced Nassau County Elder Law Attorney, call Stefans Law Group, PC today at 866-637-3224, or complete the contact form provided on this site to schedule your free consultation.