Experts urge people to develop estate plans to make sure you get to choose who will inherit from you and how much, and to select additional options that are available through legal documents, like trust agreements. It can be easy to procrastinate about putting the time and effort into going through this process, if you do not see a direct benefit to yourself. However, having an estate plan can also have a dramatic effect on your life. You can protect yourself – not just your heirs – with your estate plan.
Living the Dream
You can have your elder law attorney draft documents that can make it possible for you to live your dream life, without a care in the world. Let’s say that you want to sail around the world for a few years or serve a tour of duty in the 50+ section of the Peace Corps. You cannot unplug 100 percent from the everyday world. Someone will have to pay your unavoidable bills, file your taxes and manage your money, when you are away and out of reach.
If you know someone whom you can trust without reservation, your lawyer can draft a financial power of attorney for the person you designate (your agent) to handle as many or as few business matters as you specify. You can revoke the power of attorney whenever you want, as long as you have the legal capacity to do so.
In other words, if the law would allow you to draft a valid power of attorney now, you have the legal capacity to revoke one. If you have become incompetent, for example, from an illness or injury, you cannot change the power of attorney, until or unless you regain competency.
Planning for the Worst
Your power of attorney will automatically expire, if you become incapacitated, unless you make sure that the document is a “durable” power of attorney. Being durable means that, at the time that you signed the paper, you intended for the document to continue in effect, if you could not manage matters for yourself.
If you do not have a durable power of attorney and one day you have a stroke or a catastrophic car crash, by way of example, the courts will decide who will make your financial decisions for you. Your family will have to file a request with the court (and pay the court costs to do so), wait for a hearing date, and get a ruling from a judge – a person who has never met you or your family. By the way, the judge will be required to appoint an independent attorney to represent you against your family, to protect your interests. If you prefer to have control over this decision rather than a total stranger, get a durable power of attorney.
Trusts are for the Living
Many people think of setting up a trust as a way to pass their assets to their loved ones privately and quickly, without having to go through the probate courts. While that is one of the purposes for trusts, you can also set up a living trust to stipulate how you want your assets, investments and other financial matters handled, if you become incapacitated.
You can even lay out how you want your business run, if you own a company. You can name someone to serve as your guardian and name a conservator who will manage your finances. You can also let a total stranger make these decisions.
Be sure to talk with an elder law attorney in your area, because this article is about the general law. Your state’s rules might vary from the general law.
American Bar Association. Power of Attorney. (Accessed April 4, 2019) https://www.americanbar.org/groups/real_property_trust_estate/resources/estate_planning/power_of_attorney/