Estate Planning 101 for Intended Parents

Estate planning is more than just dividing your assets when you pass away. A comprehensive estate plan should protect your family and assets, in the event that you die or become incapacitated. The basic estate plan should consist of a will, a power of an attorney, and a health care proxy. Selecting the appropriate fiduciaries or parties to act on your behalf is a difficult choice. We will walk through each of the important estate plan documents to discuss the types of fiduciaries named and what their role will be, to help you select the appropriate people to act on your behalf.

Estate Planning ConversationWhile waiting for your surrogate match, intended parents should start the conversation about who would be their financial and health care power of attorneys, in the situation of incapacitation and in the situations of death, who would be their executor. This is also the perfect time to begin the conversation about who the guardians of their child(ren) would be, if they both pass away during their surrogacy process, prior to the birth of their child, or during their child’s life. Estate planning is important as many states require that intended parents have wills, which include guardianship language for their minor child(ren), for a carrier agreement to be finalized.

Further, legal clearance for a transfer cannot be sent to the IVF Clinic, without intended parents’ having either a will or a legal document providing guardianship for a child. Your Circle attorney will need a copy of your wills or the legal document providing guardianship for a child. Legal clearance is what allows your carrier to begin medications and to be scheduled for and to have a transfer. Your IVF Clinic will not allow your carrier to begin medications nor schedule her for a transfer, without legal clearance.

Will

A will is a legal document that directs how property shall be distributed upon the death of the “testator”, the person who’s will it is. Creating a will is an important part of the estate planning process.

In a will, you will name an “executor”, who is the person you authorize to manage your estate once deceased. The executor will collect the property, pay off any debts, and distribute property and assets according to the terms of the will. When choosing an executor, you want to make sure you are selecting someone you trust, who will be able to follow the requests you outline in your will. When selecting your executor, you want to select someone that you know will not create any arguments, issues, or problems with your beneficiaries. In the will, the executor should have the right to renounce or resign, without Court approval, to give them some flexibility, if your executor is unable or unwilling to act on your behalf.

surrogacy terminologyIf you have minor children, you will also need to name a “guardian” and a “trustee” in your will. This is a critical part of estate planning. A guardian is someone you designate to step in and assume your roll as a legal parent in the event that both of your child’s parents pass away before the child’s age of majority (in most states this is the age of 18). This person is important because they will be raising your child in your absence if both parents are deceased. This is extremely important while going through your surrogacy journey. Guardianship for a child is required for legal clearance. To read more about a guardian, please go to our posting on How to Select a Guardian For Your Child.

A “trust” holds property for the benefit of another (a “beneficiary”). A trust can be a standalone document, or it can be included a will. If a trust is created in a will, a trust is not created until the testator dies. The trust is overseen by a trustee, which is a person you specifically designate to both manage the property owned by the trust and distribute the trust income or property according to the terms of the trust document. A trustee may be an individual or a business. When selecting a trustee, it is important to select someone who is financially savvy, responsible, and trustworthy, as they are the person who will have access to the trust assets. Trustees should be granted the power to distribute trust property in the Trustee’s discretion, for a beneficiary’s well-being, with the standard of “health, education, maintenance and support”, also known as “HEMS”. This is a common standard used, for tax purposes. If you are creating a trust for minor children, it would also be beneficial to have your guardian be a co-trustee, so they have access to the funds in order to financially support your child.

Power of Attorney

A “power of attorney” is a written document in which an individual designates another person to make his or her property and property-related decisions if the individual becomes incapacitated and is unable to do so.

Estate PlanningThere are two different types of powers of attorney: “durable” and “springing.” A durable power of attorney becomes effective as soon as you sign the document and continues to be effective if you are incapacitated. If you have a durable power of attorney, your agent may act on your behalf while you are alive and are fully capable of acting on your own behalf, such as if you are out of the country and you need someone to access your bank accounts to pay your bills. A springing power of attorney means that the agent cannot act, unless the principal is deemed incapacitated. If you have a springing power of attorney, most states or financial institutions will require a doctor’s note or court order of incapacity, prior to your agent being able to act on your behalf. Most attorneys will recommend a durable power of attorney, rather than a springing power of attorney, because any financial institution will require proof that the power of attorney has “sprung” into effect, which would be by proof of incapacitation. Some financial institutions will require even more than proof of incapacitation, such as a court order activating the power of attorney, which can cause more issues and problems than anyone will be prepared for.

When you are selecting your power of attorney, you should make sure that you are selecting someone you trust fully, financially, and with all your assets. This will protect you, your assets, and your future. Usually married couples will choose their spouse to their first “agent”, as their spouse would be the person to step into their shoes, to handle all financial, property, and property-related decisions. Choosing your spouse is the most practical decision, if you and your spouse have shared financial account or property. It is best if you have a list of three agents. An example would be:

I, Jane Doe, appoint my wife, Danielle Doe, to be my true and lawful agent and attorney for me and in my name, place and stead. If Danielle Doe is unable or unwilling to act, I appoint Christopher Doe, my brother, to act in her place and stead. If Christopher Doe is unable or unwilling to act, I appoint Christine Doe, my sister-in-law, to act in his place and stead.

Health Care Proxy

A “health care proxy” is a written document in which an individual designates another person (the “health care agent”) to make health care and health-related decisions in the event that the individual becomes incapacitated. It is important to include designating a health care proxy during the estate planning process. A health care proxy should have a living will, organ donation, and a Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) waiver language included. A “living will” is a document that sets forth a person’s wishes regarding the use of life-sustaining treatment in the event that he or she becomes terminally ill or permanently unconscious. Language concerning organ donation will allow or forbid the medical professionals to retrieve any useful organs prior to burial or cremation. HIPAA waivers in a health care proxy will allow hospitals, doctors, and other medical providers to speak freely to your agent about your medical diagnosis, treatment, and care so he or she can make informed decisions.

When selecting a health care proxy, you should select someone who will be able to make the appropriate medical choices and follow your wishes, no matter how hard those decisions may be. You should select someone who will be able to serve as your patient advocate and carry out your healthcare wishes if you are unable to do so.

Circle Surrogacy has attorneys licensed in California, Massachusetts, New Hampshire, New Jersey, and New York, who are able to draft your estate plan for you.  We also work closely with attorneys in other states to help facilitate establishing your estate plan. We recommend that you work with an attorney licensed in your state of residency or home country (if international) to ensure that the provisions and documents themselves will be recognized in an applicable court of law. If you are interested in setting up a consultation with one of our Circle attorneys to discuss estate planning, or have any questions, please email us!

 

Amanda Corsaro, esqAmanda Corsaro earned a Bachelors in Criminal Justice and Bachelors in Political Science from Pace University. Fulfilling her life-long dream to become an attorney, she received her Juris Doctorate from Roger Williams University School of Law. Amanda began her legal career in Criminal Defense, Immigration, and Family Law, practicing in New Jersey and New York. In fall of 2018, Amanda moved back to New England and joined the Circle Family. She now assists clients in drafting and negotiating surrogate and egg donor agreements, addresses insurance issues and appeals, and assists intended parents with establishing parental rights through adoptions. Amanda is licensed to practice law in New York, New Jersey, and Massachusetts.