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A glossary of terms for your end-of-life planning
Wanting to prepare for the inevitable but not sure what you need? The following are some suggestions on what you might want to think about.
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Advanced Directive. Instructions on your medical decisions when you are too ill to make them for yourself with guidance on what is an acceptable quality of life and instructions on what should happen to your body if you pass away . An unnotarized version is currently being accepted by doctors and hospitals due to the global pandemic. This might change in the future.
Durable Power of Attorney gives agency for someone or multiple people to make decisions on your behalf and manage your finances when you become incapacitated. This becomes invalidated when you pass away. Important to note that you’re not giving up control over your finances before you’re incapacitated. The agent has legal access as soon as the POA takes effect, but you can revoke their power at any time or for any reason. In the meantime, you won’t lose any of your own access or control over your accounts.
Guardianship. A set of state specific legal documents to sign over legal responsibility and guardianship of a child or incapacitated adult in case of illness, accident or death of responsible party.
Pet Custody. If you want to make sure your pet is taken care of after you die then you need to include them in your will or trust. Whether it’s a short or long term arrangement make sure you have elected someone that has your pets interest at heart, who lives in a pet friendly home and will be able to fulfill their needs. This is a big responsibility so make sure you have made these arrangements openly with whoever you have chosen for your pets ongoing care and name a backup person just in case. In the case you get sick, make sure you have all necessary information for your pet’s care in a highly visible location in your home.
Will or Trust. A trust or will allows you to transfer property after death to loved ones. Unlike a will, a living trust passes property outside of probate court. There are no court or attorney fees after the trust is established. Your property can be passed immediately and directly to your named beneficiaries.
Transfer on Death Deed for Real Estate. A Transfer of Death Deed or a TOD designates a specific beneficiary (person or charity) to become owner of the property when the current owner dies without having to go through the probate process. Of course this deed only takes effect upon owner’s death and can be revoked at any time while the owner is living. Deeds held by married couples will not go to the beneficiary until the spouse’s death. (not all states recognize this cheaper easier way to transfer property). For real estate TOD The assessor’s parcel identification number (PIN) for the property can be found through your county assessor’s office or website. To be legally valid the TOD needs to be signed and recorded before death of property owner.
Why we recommend it: If one day you are a medicaid recipient a transfer on death deed will transfer your property to your spouse or other person protecting your assets from Medicaid making an estate recovery claim for benefits you have received during your life. This deed lets you plan ahead for your property-avoiding probate and gift taxes, while maintaining the right to sell or profit from the property during your lifetime.
Transfer on Death beneficiary for Cars. Name a Transfer on Death (TOD) Beneficiary for your car title or registration so your car can pass to your named beneficiary quickly outside of probate. First confirm that your state offers TOD for vehicles and check your local DMV for specifics. If you live in a community property state make sure you have signed consent from your spouse before naming your TOD beneficiary.
Probate. When you pass away without any legal documents in place, your property will go into “probate” which is the legal process of determining if you have a will. When it is determined you do not have a will, the state verifies your next of kin so your property, money and all assets can be distributed evenly amongst your next of kin. Depending on the size of your estate this can take months to years. Certain legal documents such as Life Insurance, Trusts, and TOD’s are exempt from the probate process.
Next of Kin. Are the nearest blood relatives, including spouse, of someone who has died.
Payable Upon Death. POD. You can create a beneficiary for your bank accounts that is payable upon your death. Set an appointment with your financial institution. This will require a government issued photo ID, social security number as well as the basic information, current address and social security number of the beneficiary.