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Several weeks ago I spent the morning in the office of a Tax and Estate Attorney. The good news is that I spent only a portion of the morning. The purpose of our meeting was to begin the process of updating my estate documents.
I’m happy to inform readers that this process is now complete, and my estate documents have been updated.
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I will provide a general disclaimer here, as I live in Louisiana. Louisiana law is derived from the Napoleonic code, which differs from the civil code of other states in the United States. Estate documents and wills are personal and specific to each individual. Individuals should not consider the information provided as a specific guide for individual needs. This information is being provided as a general and informative guide.
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The initial estate, documents for my wife and me were created approximately 15 years ago. Our children were 15 years younger, and in early adulthood.
Our will takes advantage of the maximum estate tax exemption available and creates trusts for our children with distributions of trust funds at certain ages. Because we did not know the status of our three children as they grew into adulthood, we wanted protection from indiscriminate behavior early in their adulthood. In other words, we didn’t want to dump a lump sum of money in their hands in their early 20s. The way our estate documents were arranged, our children would receive certain percentages of money until they reached age 50 in the event of our untimely deaths. At age fifty, the remainder of the trust would be distributed and the trust dissolved.
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What Estate documents were created at their initial drafting 15 years ago?
Our Estate Documents included:
- Our Last Will and Testament
- A Durable Power of Attorney
- A Healthcare Power of Attorney
- An Advance Medical Directive, also known as a Living Will.
An individual and separate set of documents was established for each of us.
A new packet of documents will also include a HIPAA release for my wife, and a separate HIPAA release for my children. The current healthcare environment does not allow the release of medical information without specifically granting the release of that information.
HIPAA is the Health Insurance Portability and Accountability Act, a 1996 law that sets national standards for protecting the privacy and security of individuals’ health information, known as Protected Health Information (PHI). The HIPAA Act grants patients rights over their health data. It establishes rules for healthcare providers and their business associates on how to use and disclose PHI. It requires safeguards to prevent breaches and ensure data security.
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Several changes have occurred in tax and estate law, and our family is approximately 15 years older.
My wife and I discussed the disposition of our assets and decided that a trust for our children is no longer necessary. We desire our Last Will and Testament to be as simple and efficient as possible.
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Last Will and Testament
A last will and testament is a legal document outlining how you wish your assets to be distributed, your minor children to be cared for, and your affairs to be managed after your death. It is necessary to ensure your wishes are followed, to prevent potential family disputes, to name an executor to oversee your estate, and to ensure your beneficiaries receive what you intend, as state law will otherwise determine how your assets are distributed.
What is a Last Will and Testament?
- A legally binding document that specifies your wishes for your assets and dependents after you die.
- It dictates to the court who should receive your property, cash, and other assets.
- You can name an individual to manage your estate, pay debts, and distribute assets according to your will.
- For those with minor children, a will allows you to appoint a guardian to care for them and their property.
Why is a Last Will and Testament Necessary?
- A will ensures your assets go to the people or organizations you choose, rather than being decided by state intestacy laws.
- A clear will minimizes confusion and potential disagreements among family members about how to handle your estate.
- A will provides guidance and peace of mind to your loved ones during a difficult time.
- By specifying beneficiaries and managing debts, a will can help your estate avoid undue financial hardship for your spouse and children.
- It gives you the authority to select your executor, and a guardian for your children.
- What Happens Without a Will? Your estate is distributed according to the state’s probate laws if you die without a valid will.
- The state’s legal priority statutes will determine your beneficiaries and the distribution of your assets, which may not align with your preferences.
- The intestacy laws might result in a distribution of assets that leaves your surviving spouse or other beneficiaries in financial jeopardy.
Our original Wills are nine pages long.
Our new Wills should be reduced to about half that length. New tax laws and estate provisions will decrease the length of our Wills while stating our last wishes in a more efficient and simple format.
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Power of Attorney
A Power of Attorney (POA) is a legal document in which a principal (you) grants another person (an agent, or attorney-in-fact) the authority to act on their behalf in specified matters. POAs can be limited to a single transaction or grant broad authority. A Durable POA remains in effect even if the principal becomes incapacitated, while an ordinary POA terminates. You can create a power of attorney for financial matters or healthcare decisions.
Key Aspects
- Parties Involved: The document is an agreement between a principal (the person granting authority) and an agent or attorney-in-fact (the person receiving authority).
- Types of POAs:
- General POA: Grants the agent broad authority to act on the principal’s behalf.
- Limited or Special POA: Grants the agent authority to act in a specific situation. It may be used in the closing of a house sale.
- Durable POA: Continues to be valid even if the principal becomes incapacitated or unable to make decisions.
- Ordinary (Non-Durable) POA: Terminates when the principal becomes incapacitated or dies.
- Springing POA: Becomes effective upon the occurrence of a specified event, such as incapacitation.
- Scope of Authority: You decide the powers your agent will have.
- Financial Matters: Examples of financial matters include filing taxes, buying or selling property, and managing bank accounts.
- Healthcare Matters: This may allow an agent to make medical decisions, choose doctors, or arrange long-term care.
How to Create a POA
- Choose Your Agent: Decide on a trustworthy person to act on your behalf.
- Define the Authority: Determine the scope of powers you want to grant your agent.
- Fill Out the Form: Complete a power of attorney form, ensuring it complies with the laws of your state.
- Execute the Document: Follow your state’s specific legal requirements for executing the POA, which may include signing in front of witnesses and having the document notarized.
Why You Need a POA
- Control Over Decisions: It ensures a trusted person, rather than the court system, makes decisions for you.
- Peace of Mind: You can be confident that your financial and healthcare needs will be handled according to your wishes, even if you are unable to act.
- Family Harmony: It can help prevent family conflicts over who should have the authority to make decisions for you.
Our current General Power of Attorney and current Healthcare Power of Attorney are 12 pages long.
Our new healthcare power of attorney, and our durable general power of attorney will reflect the current Estate laws.
This topic was the subject of several minutes of discussion, as our current documents enact a durable power of attorney and are currently in effect.
Our estate attorney said the documents could be updated to reflect our current wishes. He also stated the two documents could be combined into a single power of attorney document covering financial and healthcare decisions. This new document could be written as a durable or springing power of attorney.
If written as a durable power of attorney, it immediately becomes effective when signed and gives one’s spouse legal rights to act on one’s behalf concerning financial and healthcare matters. As a springing power of attorney, it only becomes effective when a person is deemed mentally or medically unable to make their own decisions.
There are good and bad points to both of these scenarios. In the first case, legal authority is granted to someone when that authority is not needed or indicated. The concern is the potential for abuse or misuse of this legal authority.
A springing power of attorney is beneficial because the legal power is initiated only after a person becomes mentally or physically unable to make their own decisions. This condition, however, must be verified by licensed medical personnel. So, this can be both time-consuming and frustrating, and there is a lag time between when the need arises, and when the need can be legally addressed by someone else.
I will not disclose the power of attorney choice of my wife and me. I will say that my wife and I have been married for 49 years and concerns of abuse of this authority by a spouse are minimal. In its final essence, this is an issue of trust.
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Advance Medical Directive
The Advance Medical Directive is a boilerplate document with some choices to be made, but most of the document is standardized and State specific. An Advance Medical Directive or Living Will provides specific information about medical care decisions at end of life or when a person is unable to communicate those wishes.
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HIPAA Documents
As stated above, our new estate information will include a HIPAA release which will be included in the general power of attorney document.
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Points to Consider
Last Will and Testament:
Do you want to provide legacy funds? Do you have family, relatives, charities, or certain organizations that you want to fund with legacy giving?
Current tax laws facilitate simpler and more streamlined Wills. Based on the “One Big Beautiful Bill Act” passed in July 2025, the federal estate tax exemption will be a permanent $15 million for individuals and $30 million for married couples, effective January 1, 2026.
Key details about the 2026 estate tax exemption:
- For individuals: The exemption will be $15 million, an increase from $13.99 million in 2025.
- For married couples: The exemption will be $30 million, up from $27.98 million in 2025.
- Inflation adjustments: The new exemption amount will be indexed for inflation, with annual adjustments starting in 2027.
- Permanence: Unlike the previous law, this increase does not have a sunset provision, offering more long-term certainty for estate planning. New legislation to change the exemption amount could be passed in the future.
- Gift and generation-skipping transfer (GST) tax: The new exemption applies to federal gift and GST taxes.
- Portability: The exemption remains portable for married couples, allowing a surviving spouse to use any unused exemption from the deceased spouse.
This means that couples can effectively transfer an estate of approximately $30 million without incurring estate taxes, and this number will automatically adjust for inflation.
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Power of Attorney:
The decision concerning a durable power of attorney focuses on two points. The first point centers on trust. Once signed, the person receiving the Durable Power of Attorney has the same legal power as the person conferring the power of attorney.
The second point centers on time and speed. When using a springing durable power of attorney, legal power is not transferred until triggered by some incapacitating event. This event can be either a physical or mental incapacity. In either case, the incapacity must be verified by a licensed medical professional. There may be a considerable time lapse between when the legal power is needed and when that power is ultimately conferred.
Our estate attorney indicated that our durable power of attorney and healthcare power of attorney would be combined into one comprehensive document.
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Advance Medical Directive:
An advance medical directive allows you to specify your desired medical treatments and care when you can’t speak for yourself, ensuring your wishes are respected and preventing confusion for your loved ones and healthcare providers. You should consider an advance directive at any age, not just for the elderly, as accidents and illnesses can happen unexpectedly. Key steps include reflecting on your values, choosing a healthcare agent, discussing your wishes with your doctor and agent, and completing your state’s specific forms.
What to Consider When Preparing One
- Values and wishes: Think about what “quality of life” means to you and what concerns you most about medical care.
- Health care agent: Choose a trusted person to make healthcare decisions on your behalf if you are unable to do so.
- Types of treatments: Consider your stance on specific interventions like resuscitation, life support, or the use of artificial nutrition.
- Where to receive care: You may wish to specify where you’d prefer to spend your final days.
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HIPAA Document:
From the NIH: The US Health Insurance Portability and Accountability Act (HIPAA), enacted in 1996, was established to safeguard patient privacy and secure health information. HIPAA sets strict standards for managing, transmitting, and storing protected health information. HIPAA applies to healthcare providers, insurers, and other organizations handling patient data, mandating safeguards to prevent unauthorized access or misuse of sensitive information. HIPAA regulations uphold patients’ rights to confidentiality and empower them to control the disclosure of their health information, fostering trust in healthcare systems.
As with most government rules and regulations, there are pages of information on HIPAA that will not be covered here.
There are state-specific HIPAA releases that can be downloaded from the Internet. An attorney recommended that HIPAA release forms be signed and saved with important documents. The first HIPAA release would allow one person, usually a spouse, to receive HIPAA information. The second release would be broader, allowing spouses, children, close friends, or agents to receive protected information.
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Final Thoughts
Life is good!
But, everyone should prepare for those times in life that are not so good. Your death, or the death of a spouse is a qualifying event.
Now I am playing the waiting game. The estate attorney is in the process of updating and formulating new estate documents, and will contact us when that process is completed.
The next step will be for my wife and me to read, approve, and sign the updated estate documents. Estate documents are normally notarized and a copy is retained at the attorney’s office.
This is a life event where a do-it-yourself approach may not be best.
Having a good estate attorney draw up the appropriate documents provides the best chance of an uneventful succession.
My wife and I prepared Estate documents 11 years ago, and these estate documents needed updating. Our children are older and adults, and our core needs have changed.
Our estate attorney recommends that estate documents be updated every 4 to 5 years and that is probably the schedule we will maintain going forward.
I have procrastinated about updating Estate documents. I wonder why I was so hesitant to update these vital documents now that I am updating them.
I guess this is one of the many mysteries of life. I have to assume that updating Estate documents is an unhappy reminder of mortality.
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