Powers of Attorney and Advance Directives

A medical crisis only gets worse, when you learn you don’t have legal authority to make medical decisions for a loved one, or find out after a loved one is incapacitated that you can’t gain access to assets in their trust. You need to have certain estate planning legal documents already in place, according to the article “Tips you should know for Powers of Attorney and Advance Directives” from seacoastonline.com.

Power of Attorney. The power of attorney (POA) allows one person, the “principal” to appoint another person as their “agent” (also known as an “attorney in fact”). The agent has the authority to act on behalf of the principal, depending on the powers described in the document. Each state has its own laws about who can be an agent, if more than one person can be appointed as agent and if there are any limits to what power can be given to an agent. Your estate planning attorney will be able to create a POA to suit your situation.

A POA can be created to give extremely broad powers to an agent. This is sometimes called a “general” POA, where agents can do everything that you would do, from accessing and managing bank accounts, applying for Social Security, to filing tax returns. A POA can also be limited in scope, known as “limited” POA. You could permit an agent to only sign a tax return or conduct a specific transaction.

In most estate planning scenarios, the POA is “durable,” meaning the named agent can continue to have authority to act, even if the principal is incapacitated after the documents have been executed. This makes sense: a durable POA generally avoids having to go to court and have a guardian appointed. The person you have selected will be the POA, not a court-appointed person.

Advance Directive. The advance directive allows a person to appoint another person to make medical decisions on their behalf if incapacitated. In some states, this is called a durable power of attorney for health care, and in others it is referred to as a health care proxy.

In most cases, the advance directive becomes effective when one or more treating physicians determine the person no longer has capacity to make or communicate health care decisions. Having this document in place avoids having to go to court to have a guardian appointed. If time is of the essence, any delay in decision-making could lead to a poor outcome. If there is no advance directive and physicians have decided you are unable to make these decisions, they go by a hierarchy of relatives to make the decisions for you. If you have an estranged adult child, for instance, but they are your next-of-kin, they could be the one making decisions for you.

If you have children who recently became legal adults (usually age 18), these documents will protect them as well, since just being their parent does not provide you with the right to make these decisions.

Contact an experienced estate planning attorney to prepare these documents should a medical crisis arise.

Reference: Seacoastonline.com (June 27, 2021) “Tips you should know for Powers of Attorney and Advance Directives”

 

Your Will and Estate Planning Checklist

Dying without a last will creates additional costs and eliminates any chance your wishes for loved ones will be followed after your death. Typically, people think about last wills when they marry or have children, and then do not think about last wills or estate plans until they retire. While a last will is important, there are other estate planning documents that are just as important, says the recent article “10 Steps to Writing a Will” from U.S. News & World Report.

Most assets, including retirement accounts and insurance policy proceeds, can be transferred to heirs outside of a will, if they have designated beneficiaries. However, the outcome of an estate may be more impacted by Power of Attorney for financial matters and Medical Power of Attorney documents.

Here are ten specific tasks that need to be completed for your last will to be effective. Remember, if the will does not comply with your state’s estate law, it can be declared invalid.

  1. Find an estate planning attorney who is experienced with the laws of your state.
  2. Select beneficiaries for your last will.
  3. Check beneficiaries on non-probate assets to make sure they are current.
  4. Decide who will be the executor of your last will.
  5. Name a guardian for minor children, if yours are still young.
  6. Make a letter describing possessions and who you want to receive them. Be very specific.

There are also tasks for your own care while you are living, in case of incapacity:

  1. Name a person for the Power of Attorney role. They will be your representative for legal and financial matters, but only while you are living.
  2. Name a person for the Medical Power of Attorney to make decisions on your behalf, if you cannot.
  3. Create an Advance Directive, also known as a Living Will, to explain your wishes for medical care, particularly concerning end-of-life care.
  4. Discuss these roles and their responsibilities with the people you have chosen, and make sure they are willing to serve.

Be realistic about the people you are naming to receive your property. If you have a child who is not good with managing money, a trust can be set up to distribute assets according to your wishes: by age or accomplishments, like finishing college, going to rehab, or maintaining a steady work history.

Do not forget to tell family members where they can find your last will and other estate documents. You should also talk with them about your digital assets. If accounts are protected by passwords or facial recognition, find out if the digital platform has a process for your executor to legally obtain access to your digital assets.

Finally, do not neglect updating your last will every three to four years or anytime you have a major life event. An estate plan is like a house: it needs regular maintenance. Old last wills can disinherit family members or lead to the wrong person being in charge of your estate. An experienced estate planning attorney will make the process easier and straightforward for you and your loved ones.

Reference: U.S. News & World Report (May 13, 2021) “10 Steps to Writing a Will”

 

What Is the Purpose of an Estate Plan?

No one wants to think about becoming seriously ill or dying, but scrambling to get an estate plan and healthcare documents done while in the hospital or nursing home is a bad alternative, says a recent article titled “The Essentials You Need for an Estate Plan” from Kiplinger. Not having an estate plan in place can create enormous costs for the estate, including taxes, and delay the transfer of assets to heirs.

If you would like to avoid the cost, stress and possibility of your spouse or children having to go to court to get all of this done while you are incapacitated, it is time to have an estate plan created. Here are the basics:

A Will, a Living Will, Power of Attorney and a Beneficiary Check-Up. People think of a will when they think of an estate plan, but that’s only part of the plan. The will gives instructions for what you want to happen to assets, who will be in charge of your estate—the executor—and who will be in charge of any minor children—the guardian. No will? This is known as dying intestate, and probate courts will make all of these decisions for you, based on state law.

However, a will is not enough. Beneficiary designations determine who receives assets from certain types of property. This includes life insurance policies, qualified retirement accounts, annuities, and any account that provides the opportunity to name a beneficiary. These instructions supersede the will, so make sure that they are up to date. If you fail to name a beneficiary, then the asset is considered part of your estate. If you fail to update your beneficiaries, then the person you may have wanted to receive the assets forty years ago will receive it.

Some banks and brokerage accounts may have an option of a Transfer on Death (TOD) agreement. This allows you to plan out asset distribution outside of the will, speeding the distribution of assets.

A Living Will or Advance Directive is used to communicate in advance what you would want to happen if you are alive but unable to make decisions for yourself. It names an agent to make serious medical decisions on your behalf, like being kept on life support or having surgery. Not having the right to make medical decisions for a loved one requires petitioning the court.

Financial Power of Attorney names an attorney in fact to manage finances, paying bills and overseeing investments. Without a POA, your family can’t take action on your financial matters, like paying bills, overseeing the maintenance of your home, etc. If the court appoints a non-family member to manage this task, the family may see the estate evaporate.

Creating a trust is part of most people’s estate plan. A trust is a means of leaving assets for a minor child, or someone who cannot be trusted to manage money. The trust is a legal entity that inherits money when you pass, and a trustee, who you name in the trust documents, manages everything, according to the terms of the trust.

Today’s estate plan needs to include digital assets. You need to give someone legal authority to manage social media accounts, websites, email and any other digital property you own.  The time to create an estate plan, or review and update an existing estate plan, is now. COVID has awakened many people to the inevitability of severe illness and death. Planning for the future today protects the ones you love tomorrow.

Speak with an experienced estate planning attorney to assist you in preparing your documents.

Reference: Kiplinger (April 21, 2021) “The Essentials You Need for an Estate Plan”

 

What Is a Guardianship?

We would like to think that all of our very responsible parents and relatives have their legal documents in order. However, that is not always the case. Florida Today’s recent article entitled “One Senior Place: What is guardianship and should I seek it?” explains that we need to have a serious discussion with our loved ones and determine if, in fact, “their affairs are in order.” If not, a guardianship may be in their futures.  That is because a guardianship is really a last step.

Guardianship is a legal process that is used to protect a senior who is no longer able to care for his or herself due to incapacity or disability. A court will appoint a legal guardian to care for a senior, who’s called a ward. A legal guardian has the legal authority to make decisions for the ward and represent his or her personal and financial interests. A court-appointed guardian can also be authorized to make healthcare decisions. In a guardianship, the senior relinquishes all rights to self-determination, so you can see how this is the choice of last resort.  If a suitable guardian isn’t found, the court can appoint a publicly financed agency that serves this role.

A doctor will examine a senior and determine if he or she is incompetent to make his or her own decisions. The judge will review the senior’s medical reports and listen to testimony to determine the extent of the alleged incapacity and whether the person seeking guardianship is qualified and responsible.

A guardian can be any competent adult, such as the ward’s spouse, another family member, a friend, or a neighbor. There are even professional guardians. The guardian will usually consider the known wishes of the person under guardianship.

Guardianship can be very costly and can involve a profound loss of freedom and dignity. As a result, speaking with an experienced elder law attorney is essential.

However, there are things that any competent adult can do to decrease the chances of ever needing guardianship. This includes:

  • Drafting a power of attorney for finances; and
  • Drafting an advance healthcare directive, which names a surrogate decision maker for your healthcare decisions, including the right to refuse or terminate life-sustaining medical care based on your wishes.

Moreover, talk about your wishes and all your estate planning documents with your family. That way they’ll know how to put your plan into action, if required in the future. Contact an experienced estate planning attorney or an elder law attorney to assist you.

Reference: Florida Today (March 23, 2021) “One Senior Place: What is guardianship and should I seek it?”

 

What’s a Living Will?

Living wills can be used to detail the type of healthcare you do or don’t want to receive in end-of-life situations or if you become permanently incapacitated or unconscious. A living will tells your healthcare providers and your family what type of care you prefer in these situations, explains Yahoo Finance’s recent article entitled “How to Make a Living Will.” These instructions may address topics, such as resuscitation, life support and pain management. If you don’t want to be on life support in a vegetative state, you can state that in your living will.

A living will can be part of an advance healthcare directive that also includes a healthcare power of attorney. This lets your chosen healthcare proxy make medical decisions on your behalf, when you’re unable. A living will typically only applies to situations where you’re close to death or you’re permanently incapacitated; an advance directive can cover temporary incapacitation.

Ask an experienced estate planning attorney or elder care lawyer about the technical aspects of how to make a living will. You should consider what to include. Every state is different, so your attorney will help you with the specifics. However,  you’ll generally need to leave instructions on the following:

  • Life-prolonging care, like blood transfusions, resuscitation, or use of a respirator;
  • Intravenous feeding if you are incapacitated and cannot feed yourself; and
  • Palliative care can be used to manage pain, if you decide to stop other treatments.

You will want to be as thorough and specific as possible with your wishes, so there is no confusion or stress for your family when or if the day arrives. You next want to communicate these wishes to your loved ones. You should also give copies of your living will to your doctor. If you’re drafting a living will as part of an advance healthcare directive, be certain that you get a copy to your healthcare proxy.

Review your living well regularly to make sure it’s still accurate because you may change your mind about the type of care you’d like to receive.

Ask your attorney to help you draft a living will along with a healthcare power of attorney, so all of the bases are covered as far as healthcare decision-making. When choosing a healthcare proxy, select a person on whom you can rely, to execute your wishes.  A living will can be an important component of an estate plan and preparing your family for your death.

Reference: Yahoo Finance (Feb. 18, 2021) “How to Make a Living Will”

 

Get Estate Plan in Order, If Spouse Is Dying from a Terminal Illness

Thousands of people are still dying from COVID-19 complications every day, and others are dealing with life-threatening illnesses like cancer, heart attack and stroke. If your spouse is ill, the pain is intensified by the anticipated loss of your life partner.

Wealth Advisor’s recent article entitled “Your Spouse Is Dying: 5 Ways To Get Your Estate In Order Now,” says that it’s frequently the attending physician who suggests that your spouse get his affairs in order.

Your spouse’s current prognosis and whether he or she’s at home or in a hospital will determine whether updates can be made to your estate plan. If it has been some time since the two of you last updated your estate plan, you should review the planning with your elder law attorney or estate planning attorney to be certain that you understand it and to see if there are any changes that can and should be made. There are five issues on which to focus your attention:

A Fiduciary Review. See who’s named in your estate planning documents to serve as executor and trustee of your spouse’s estate. They will have important roles after your spouse dies. Be sure you are comfortable with the selected fiduciaries, and they’re still a good fit. If your spouse has been sick, you’ve likely reviewed his or her health care proxy and power of attorney. If not, see who’s named in those documents as well.

An Asset Analysis. Determine the effect on your assets when your partner dies. Get an updated list of all your assets and see if there are assets that are held jointly which will automatically pass to you on your spouse’s death or if there are assets in your spouse’s name alone with no transfer on death beneficiary provided. See if any assets have been transferred to a trust. These answers will determine how easily you can access the assets after your spouse’s passing.

A Trust Assessment. Any assets that are currently in a trust or will pass into a trust at death will be controlled by the trust document. See who the beneficiaries are, how distributions are made and who will control the assets.

Probate Prep. If there’s property solely in your spouse’s name with no transfer on death beneficiary, those assets will pass according to his or her will. Review the will to make sure you understand it and whether probate will be needed to settle the estate.

Beneficiary Designation Check. Make certain that beneficiaries of your retirement accounts and life insurance policies are current.

If changes need to be made, an experienced elder law attorney or estate planning attorney can counsel you on how to best do this.

Reference: Wealth Advisor (Jan. 26, 2021) “Your Spouse Is Dying: 5 Ways To Get Your Estate In Order Now”

 

Every Adults Needs a Will and a Health Care Power of Attorney

A serious illness can happen at any age, but just 18% of those 55 and older have a living will, power of attorney for health care and a last will and testament, according to a 2019 study by Merrill Lynch Wealth Management.

AZ Central’s recent article entitled “What to know about wills and health care power of attorney in Arizona” says that every adult should have these documents, including young professionals, single people and those without children.

These documents make it easier for an individual and their family during a stressful time. They make your wishes clear.  They also help give directions to family members and allow you to name a person you believe is the most responsible and able to fulfill your wishes.

Note that a power of attorney, living will and last will each has its own purpose.  A power of attorney for health care lets your named agent make medical decisions on your behalf if you are incapacitated, while you are still alive. Without a health care power of attorney or living will, it can complicate and delay matters.

A living will or “advance directive” is used when a person needs end-of-life care. This document can provide instructions on how the person wants to be treated, like not wanting a feeding tube or wanting as much medical help as possible.

In contrast, a last will and testament states what happens to a person’s estate or assets after they pass away. A last will can also designate a guardian for minor children.  A last will can state who will be in charge of the person’s estate, known as an executor or a personal representative.

You should name a primary representative and an alternate to serve and provide copies of the documents to the people chosen for these roles.

Contact an experienced estate planning attorney to assist you.

Reference: AZ Central (Jan. 14, 2021) “What to know about wills and health care power of attorney in Arizona”

 

The Difference between Power of Attorney and Guardianship for Elderly Parents

The primary difference between guardianship and power of attorney is in the level of decision-making power, although there are many intricacies specific to each appointment, explains Presswire’s recent article entitled “Power of Attorney and Guardianship of an Elderly Parent.”

The interactions with adult protective services, the probate court, elder law attorneys and healthcare providers can create a huge task for an agent under a power of attorney or court-appointed guardian. Children acting as agents or guardians are surprised about the degree of interference by family members who disagree with decisions.

Doctors and healthcare providers don’t always recognize the decision-making power of an agent or guardian. Guardians or agents may find themselves fighting the healthcare system because of the difference between legal capacity and medical or clinical capacity.

A family caregiver accepts a legal appointment to provide or oversee care. An agent under power of attorney isn’t appointed to do what he or she wishes. The agent must fulfill the wishes of the principal. In addition, court-appointed guardians are required to deliver regular reports to the court detailing the activities they have completed for elderly parents. Both roles must work in the best interest of the parent.

Some popular misperceptions about power of attorney and guardianship of a parent include:

  • An agent under power of attorney can make decisions that go against the wishes of the principal
  • An agent can’t be removed or fired by the principal for abuse
  • Adult protective services assumes control of family matters and gives power to the government; and
  • Guardians have a responsibility to save money for care, so family members can receive an inheritance.

Those who have a financial interest in inheritance can be upset when an agent under a power of attorney or a court-appointed guardian is appointed. Agents and guardians must make sure of the proper care for an elderly parent. A potential inheritance may be totally spent over time on care.

In truth, the objective isn’t to conserve money for family inheritances, if saving money means that a parent’s care will be in jeopardy.

Adult protective services workers will also look into cases to make certain that vulnerable elderly persons are protected—including being protected from irresponsible family members. In addition, a family member serving as an agent or family court-appointed guardian can be removed, if actions are harmful.

Agents under a medical power of attorney and court-appointed guardians have a duty to go beyond normal efforts in caring for an elderly parent or adult. They must understand the aspects of the health conditions and daily needs of the parent, as well as learning advocacy and other skills to ensure that the care provided is appropriate.

Ask an experienced elder law attorney about your family’s situation and your need for power of attorney documents with a provision for guardianship.

Reference: Presswire (Jan. 14, 2021) “Power of Attorney and Guardianship of an Elderly Parent”

 

What Legal Documents Should You Have?

You might think that the coronavirus pandemic has caused everyone to get their estate planning documents in order, but the 20th annual Transamerica Retirement Survey of Retirees found that 30% of all retirees have nothing prepared—not even a will. That’s not good, for them or their families, says this timely article “6 Legal Documents Retirees Need—but Don’t Have” from MSN Money.

The survey revealed some troubling facts:

Only 32% have a Health Care Power Of Attorney or Medical Proxy, which allows named persons to make medical decisions on the retiree’s behalf.

Only 30% have an Advance Directive or Living Will, sharing their end-of-life wishes for medical care.

A mere 28% have a designated Power of Attorney, so an agent can act on their behalf to pay bills and manage finances, if they are too sick to do so.

Worse, only 19% have written funeral and burial arrangements. Their families will be left to make all the decisions.

18% have a Health Insurance Portability and Accountability Act (HIPAA) waiver, which is needed so someone else may speak with health care and insurance providers on their behalf.

11% have a Trust of any kind.

The study shines a bright light on a big problem that will be faced by families, if their elders have not taken steps to prepare for incapacity or death. Ignoring the problem does not make it go away. It becomes more complicated, expensive and stressful for the loved ones left behind.

These documents and a last will and testament are needed, so families have the legal right to take care of their loved ones while they are living, as well as handle their estates after they pass. Contact an estate planning attorney to assist you in preparing these documents.

Without them, the family may find themselves having to go to court to have a guardian appointed in the event their senior loved ones are too ill to manage their financial affairs.

If the loved one should die and there is no will in place, the court will rely on the state’s estate laws to determine who inherits assets. An estranged family member could end up owning the family home and all of its contents, regardless of their absence from the family.

An experienced estate planning attorney can work with the family in a safe, socially distanced manner to have the necessary documents created, before they are needed.

Reference: MSN MONEY (Dec. 15, 2020) “6 Legal Documents Retirees Need—but Don’t Have”

 

How Much Should We Tell the Children about the Estate Plan?

Congratulations, if you have finished your estate plan, you and your estate planning attorney created a plan that is suited for your family, you have checked on beneficiary designations, signed all of the necessary documents and named an executor to carry out your directions when you pass. However, have you talked about your estate plan with your adult children? That is the issue explored in the recent article entitled “What to tell your adult kids when planning your estate” from CNBC. It can be a tricky one.

There are certain parts of estate plans that should be shared with adult children, even if money is not among them. Family conflict is common in many cases, whether the estate is worth $50,000 or $50 million. So, even if your estate plan is perfect, it might hold a number of surprises for your children, if you don’t speak with them while you are living.  The best estate plan can bequeath resentment and enduring family conflicts, if family members don’t have a head’s up about what you’ve planned and why.

If you die without a will, there can be even more problems for the family. With no will—called dying “intestate”—it is up to the courts in your state to decide who inherits what. This is a public process, so your life’s work is on display for all to see. If your heirs have a history of fighting, especially over who deserves what, dying without a will can make a bad family situation worse.

Not everything about an estate plan has to do with distribution of possessions. Much of an estate plan is concerned with protecting you, while you are alive.  For starters, your estate planning attorney can help you with a Power of Attorney. You’ll name a person who will handle your finances, if you become unable to do so because of illness or injury. A Healthcare Power of Attorney is used to empower a trusted person to make medical decisions for you, if you are incapacitated. Some estate planning attorneys recommend having a Living Will, also called an Advance Healthcare Directive, to convey end-of-life wishes, if you want to be kept alive through artificial means.

These documents do not require that you name a family member. A friend or colleague you trust and know to be responsible can carry out your wishes and can be named to any of these positions.  All of these matters should be discussed with your children. Even if you don’t want them to know about the assets in your estate, they should be told who will be responsible for making decisions on your finances and health care.

Consider if you want your children to learn about your finances during your lifetime, when you are able to discuss your choices with them, or if they will learn about them after you have passed, possibly from a stranger or from reading court documents.

Many of these decisions depend upon your family’s dynamics. Do your children work well together, or are there deep-seated hostilities that will lead to endless battles? You know your own children best, so this is a decision only you can make.

It is also important to take into consideration that an unexpected large inheritance can create emotional turbulence for many people. If heirs have never handled any sizable finances before, or if they have a marriage on shaky ground, an unexpected inheritance could create very real problems—and a divorce could put their inheritance at risk.

Talk with your children, if at all possible. Erring on the side of over-communicating might be a better mistake than leaving them in the dark. You may want to schedule an appointment with your estate planning attorney and have the family in for a meeting.

Reference: CNBC (Nov. 11, 2020) “What to tell your adult kids when planning your estate”