Wills, Trusts, POA, POD …
Are you confused with these words or packs of letters? I can help by breaking the words and their actions down!
Too often when forms are not filled out correctly it is simply because an unknowingness existed.
That doesn’t have to happen and I am there to make sure these forms are correctly filled out. Few things can be more frustrating than not having a Power of Attorney (POA) form filled out and the person who didn’t fill it out is lying there in an non-communicative state.
That happened to a friend of mine twelve years ago when she fell into a non-responsive state. I had begged her to fill out a POA form because her immediate family was dead and there was no one to take care of her. Suddenly she was non-responsive, the Doctors didn’t know whether she would pull through that day, the days turned quickly to weeks, and when she did finally come around she was in a state of delirium. Friends of this woman waited until she could make a decision who she wanted as POA. She selected me to act as her POA for financial and health care.
I learned a lot over the next twelve years as I stepped in and stepped out as her POA depending on whether she was very ill again or developed delirium. She died this winter and I learned a lot about transfer and payable on death and made friends with workers at a local probate court!
To begin with people should have a Power of Attorney, or POA. A POA is someone that you trust completely to handle your health decisions and/or your financial decisions when you no longer can. For one reason or another, you become unable to handle these basic decisions and that can turn into a big mess if you are the only one of your family left. HIPAA laws were designed to protect you from other people finding out your medical concerns when they didn’t need to know. The legalese of HIPAA can bring you down if you do not have a trusted person to become your POA.
You also should consider your bank account. Did you know that your bank account becomes null and void to a POA from the second after you die?
However, simply asking at your bank for a Payable on Death (POD) will allow the person you select to have complete control of your bank account. Your selected person will have to amend your bank account with Medicaid if necessary.
The court will appoint a person to those uncapable of choosing a POA. This may be due to being incapacitated or unable to manage their own affairs.
A Transfer on Death (TOD) will keep your selected person(s) from having to go to
probate court for your house or those cars which are not financed by anyone, you cannot get a TOD on vehicles that are undergoing finance by other companies.
A will is a way for you to write down what people will inherit when you die. Wills have to go to probate court and that can take anywhere from 8 weeks to 13 months time and a large chunk of money – usually around 20% of what you left them to inherit.
A much easier way to protect the things (assets) you want select people to inherit is to put them into a trust. The time you put the assets into the trust must be 5 years to prevent Medicaid from touching it. Anything that is in a trust less than 5 years is subject to a percentage that will go to Medicaid. Once an asset is entered into a trust, you no longer own it. You are the “caretaker” of it while you are alive. So if a house is in a trust, that house can be sold just like any other house. Or that trust can switch ownership once you die. Did you know that a trust that is started by you can last forever if it is an irrevocable trust?
