Estate Planning: Powers Of Attorney, Living Trusts, Wills & Special Needs Trusts

In recent years, we have all been reminded to make sure our final affairs are in order.  The need to have things in writing seems more acute now than ever before.  

A written estate plan helps your loved ones take care of you and your financial affairs when you become disabled or die.  Your customized estate plan will feature a health care power of attorney, a property power of attorney, a living trust, an affidavit of trust, a pour-over will, and an optional special needs trust. These are durable (perpetual) documents which do not expire. They are revocable, which means that can be withdrawn, or changed  to reflect changes in your life (for example, the death or divorce of a spouse, or the arrival of a grandchild).

Health Care Power of Attorney

This document appoints a loved-one or a trusted friend to make healthcare decisions for you if you are incapacitated and unable to make medical decisions for yourself. Usually, this document is activated when your physician determines that you are no longer able to make medical decisions for yourself. The health care power of attorney also specifies your end-of-life wishes, that is, whether or not you would want to be put on a machine, if you become that sick. Know your wishes and put them in writing.

Property Power of Attorney

This is a powerful instrument which should be used with caution. However, if you are incapacitated, it will let your loved ones or trusted friends pay bills and otherwise take care of your financial affairs.

Living Trust

Living trusts have been around for years. Established properly and funded with your assets, your estate can skip the entire probate process. The key is to have less than $100,000 in your name when you die. Everything else is owned by the living trust. With a living trust in place, the administration of your estate becomes a private affair. No one needs to know how much money or property you owned when you died or to whom you left your estate. A living trust makes that information private by keeping your personal matters out of probate court.

Affidavits of Trust

This short version of the living trust lets your bank and investment advisors re-title your accounts into the name of your living trust. This is how you “fund the trust”. Many of my clients deed their real estate into their living trust, which also funds it.

Pour Over Will

Even though the living trust has essentially replaced the will, I always have my clients sign a “pour-over” will, in case there exists a forgotten large asset. This asset would then “pour-over” into the living trust, dispensing with the need for going through an expensive, lengthy, and public probate court proceeding.

Special Needs Trust

A special needs trust, if created and funded correctly, will have the effect of shielding Medicaid and Medicare from invading bank accounts or other assets in order to pay for food, shelter, clothing and medical expenses of a disabled child or adult living in a group home or a residential facility. A special needs trust lets you take care of your disabled loved one. The assets in this type of trust can be used for vacations and other fun activities, and will not have to be surrendered to Medicaid or Medicare who may be paying for the costs of long-term care in a group home or residential facility.


Probate proceedings are cases filed in court in order to administer a decedent’s estate, to place a disabled person under guardianship, or to administer a minor’s guardianship estate.

Decedent’s Estate Probate Case

When someone dies with only a will, or with no will at all, when that decedent’s estate’s assets exceed $100,000, and when the decedent does not have a living trust, a decedent’s probate case must be opened in state court. This is a court process that usually takes at least one year to administer. The rights of the heirs and legatees of the estate must be carefully protected.

Disabled Guardianship Probate Case

There are times when a loved one needs to be put under a disabled guardianship. Some adults who are born disabled, may never have the capacity to make medical and financial decisions for themselves. Others, often elderly parents, start to lose their mental faculties as they age, and need to be put under the protection of a guardianship. This is a probate court case which must be administered properly in order to protect the rights and assets of the disabled person. Guardianship cases feature many court-ordered protections which are put into place in order to protect the disabled person and his or her assets.

Minor’s Guardianship Probate Case

Once in a while, someone dies leaving over $100,000 to a minor child. In order to protect the rights of the child before reaching age 18, his or her assets may need to be protected by opening a minor’s guardianship estate. Unless this child is disabled, he or she will receive these estate assets upon turning 18.