A Look At Healthcare Documents Used In Estate Planning

The following article will cover:

• The healthcare-related documents that should be included in an estate plan in California.
• The importance of anticipating potential conflicts between heirs and ways to address them in estate planning.
• The various strategies available to minimize or avoid estate taxes.

What Healthcare Related Documents Do I Need To Include In My Estate Plan In California?

There are two primary healthcare-related documents to include in your estate plan in California:

1. Advance Health Care Directive (AHCD): Previously known as a power of attorney for health care decisions, an AHCD authorizes a trusted individual (such as a spouse, child, or friend) to make healthcare decisions on your behalf if you’re unable to do so. An AHCD can also include instructions on the disposition of your remains, organ donation preferences, and specific care instructions in case you’re unable to communicate your wishes.
2. Physician’s Order for Life-Sustaining Treatment (POLST): This document outlines your preferences regarding resuscitation if you’re found unconscious and not breathing, as well as the level of care you desire at the end of your life. Options range from full intervention to comfort care only. Unlike the AHCD, a POLST is typically prepared by a physician and signed by both the patient and the physician, as it serves as a medical order.

Including these two documents in your estate plan ensures your healthcare preferences are honored, and your loved ones have clear guidance on how to handle medical decisions on your behalf if necessary.

Can I Set Up My Estate Planning To Plan For And Avoid Potential Conflicts Between My Heirs? What’s The Best Way To Resolve Family Issues When Deciding Who Gets What Assets?

Yes, anticipating potential conflicts between heirs and addressing them in your estate planning is highly recommended. It is essential to be honest about the relationships between your beneficiaries and consider how they may interact. As estate planners, our role is to identify possible issues and discuss them with clients to ensure a fair outcome for all parties.

One approach is to include an intent or purpose statement in the trust document, explaining the reasoning behind specific dispositions. This can help beneficiaries understand why certain decisions were made, even if they appear unequal.

Another option is to involve the beneficiaries themselves in the decision-making process through family meetings. This way, they can discuss and agree on asset distribution ahead of time, potentially signing a document that outlines their agreement. This approach can prevent conflicts after the parents’ passing, as everyone has already agreed on the arrangement.

Can My Estate Planning Be Set Up To Reduce Or Avoid Estate Taxes?

Yes, estate planning can be set up to minimize or avoid estate taxes. While current exemptions are significantly large, as they decrease, proper planning becomes more critical.

There are several strategies to help avoid or address estate taxes, such as setting up irrevocable trusts or creating an irrevocable life insurance trust (ILIT) to provide funds for estate tax payments. Consulting with an estate planning professional can help you identify the best methods to reduce or avoid estate taxes based on your specific situation. For more information on Healthcare Documents Used In Estate Planning, an initial consultation is your next best step.