The following is a list of terms that you might see on our website and that you may hear regarding estate planning or elder law. This list is non-exclusive and statutory changes may alter the definitions.
Allows you to express your wishes in advance. Helps Physicians and others know what medical treatments are acceptable in the event of terminal illness. Living Will directive support the Durable Power of Attorney for Health Care. Advance planning is extremely important for these complex decisions. Consult with your attorney.
Beneficiary Designated Assets
Assets managed by a third party which passes to designated individuals, e.g. life insurance policies, annuities, retirement assets (401K, IRAs) or with no designation, defaults to the estate.
Created at the voluntary request of a physically infirm, but competent, adult to place his property or person under court supervised management.
Durable General Power of Attorney
Gives power to another to make legal or financial decisions such as check cashing, banking needs or filing out tax forms if you are unable to do so. Must state specifically that it is a durable power that remains in effect beyond your disability. The powers can be narrow or broad. You should not use a form to assign powers of attorney. Such forms are often flawed and may not be legally binding. Use an attorney or call Legal Aid.
Durable Power of Attorney for Health Care
Gives power to another to make medical and personal decisions if you are unable to do so. Must state specifically that it is a durable power that remains in effect beyond your disability. Its provisions are broader than a Living Will which are limited to life and death medical care. They are important companion documents.
Tax applied by Federal Government to estates over the applicable monetary threshold.
Appointed by the court only after a jury trial has been held to determine mental competency based on medical evidence by a physician and a psychiatrist, and testimony of a social worker. The person whose competency is in question, the “Respondent” is required, if able, to appear in court. Upon adjudication of incompetence, the “Ward”, is appointed a guardian or a limited guardian and a conservator. An individual or the State may be appointed. The effect of a finding on incompetency is the removal of all or part of the ward’s adult rights. (The law refers to this a being “disabled”).
Tax applied by State of Kentucky on the right to receive property. Imposed based on family relationship to decedent.
An irrevocable gift of assets to a third party trustee for the benefit of someone other than yourself. Gifts over annual federal gifting limit consumes a portion of the federal uniform gift allocation but no tax is imposed until the monetary threshold is reached. Used to reduce the size of an estate, provide liquidity or protect assets from Medicaid eligibility with a 5 year look back.
Two or more people own or hold title to an asset, real or personal property. If held with right of survivorship, probate is avoided until the death of the last joint tenant.
See Advance Directives.
Should be prominently posted in a facility. Entitles the residents to the highest quality care with dignity, respect, full information about fees, charges and the right to privacy.
Payable Upon Death (POD) or Transfer Upon Death (TOD)
A beneficiary designation applied to a banking or investment account transferring the account to the named beneficiaries outside the probate process. Subject to estate and inheritance taxes.
Court proceeding which arranges for resolution of all legal and financial matters of the deceased. Title and asset changes are made according to the wishes in a valid will, or according to state directives in the absence of a will. Probate takes an average of six to 24 months. Expenses include court costs, attorney fees, asset appraisals, tax assistance and sometimes bond premiums (5 - 15% or estate value). Information id public record. Proceedings are required in every state in which real property is owned.
Person designated by the Social Security or Veterans’ Administration to receive benefit checks on behalf of another person. for example, a check for John Smith is paid to Lucy Jones. (Lucy must be able to provide a full accounting of her use of the money on behalf of John if requested to do so). The designation may be altered by requesting a change at the SSA of VA office.
Revocable Living Trust
Allows you to transfer ownership of assets to a trust which is administered by someone you appoint, including yourself and provides for successor trustees without court intervention. Often used as a planning tool. Can be changed at any time before your death. Allows you to designate who will receive your assets and who will manage and distribute them after your death or disability outside the probate process. Provides no asset protection from Medicaid requirements and is subject to estate and inheritance taxes.
Springing Power of Attorney
A clause in a durable power of attorney which permits the attorney-in-fact or agent to act “only if” certain events have taken place.
A legal document which declares how you want your assets distributed after your death, and appoints a personal representative to execute those wishes.
Contact us for more information about any of these.