Power of Attorney: Why It Is Important

Don't wait to create a power of attorney.
Don’t wait to create a power of attorney.

Unfortunately, you never know when a power of attorney will be needed to allow someone else to make financial and medical decisions for you. An accident or sudden illness can occur without warning. A power of attorney is a necessary document if your are too ill, injured, or lack the mental capacity to make your own decisions. The article, “Why you’re never too young for a power of attorney” from Lancaster Online, explains what these documents are, and what purpose they serve.

There are two basic power of attorney documents or “POA’s”: one for making financial decisions and one for making medical decisions. A financial POA may be effective immediately or when a doctor certifies that you are unable to handle your financial affairs. A medical POA  becomes effective when you cannot communicate a medical decision. Until then, you are completely in charge of decisions related to your medical care.

If you don’t have a POA and you are unable to make financial and medical decisions for yourself, a guardian must be appointed in a court proceeding to make decisions for you. This is an expensive and time consuming process and the outcome may not be what you would have wanted.

Anyone over the age of 18 should have a financial and medical power of attorney. Many parents start realizing this when their children go off to college. Parents are often surprised and frustrated when they find out that, because their college age children are considered adults, the parents no longer have access to their children’s financial and medical information, not even in an emergency.  That’s why our next client education seminar on June 26 is devoted to what estate planning documents students need to have in place before they go off to college. (See our website at www.galliganmanning.com for more details and information on how to register.)

While it’s never too early for a person 18 years of age or older to have medical and financial powers of attorney in place, you could wait until it’s too late. If you become incapacitated, you cannot sign a POA. We often see this when children of aging parents contact us in a panic because their parents never executed powers of attorney. If the aging parent lacks capacity and cannot sign a POA, the family is faced with the need to pursue a guardianship.

You should work with an estate planning attorney to create the powers of attorney you need.  An estate planning attorney will be able to tailor your POA to your exact needs. They will also make sure to create a document that gives proper powers to the people you select.

Review your POA’s at least annually to be sure that the people you have selected are still the people you want taking care of your financial and medical matters, if the need should ever arise.

Most important of all, don’t wait to have powers of attorney created for you. They are even more important than a Will because the powers of attorney affect your care while you are alive.

Learn more about powers of attorney and other estate planning documents.

Reference: Lancaster Online (May 15, 2019) “Why you’re never too young for a power of attorney”

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When You Need an Elder Law Attorney

An elder law attorney can guide you through the issues that affect us as we age.
An elder law attorney can guide you through the issues that affect us as we age.

The conversation that you have with an estate planning attorney, when you are in your thirties with a new house, young children, and many years ahead of you is different from the one you’ll have when you are much older. That’s the time to consult an elder law attorney. When you are older, you face a whole new set of issues, including rising health costs and the possibility of needing long term care. An elder law attorney knows that you are about to enter a time in your life when your estate planning documents are more likely to be used, says the article “Learn about legal documents and Medicaid” from the Houston Chronicle.

As we get older, the need to address long term care becomes more important. Elder law attorneys warn that there are many options that may be foreclosed if planning is not done ahead of the time. This is the time to talk to an elder law attorney to create a road map that anticipates the care you may require as you get older and how to pay for it. Making the right decisions now, could have a big impact on the quality of your life in the future.

This is also the time to update your financial and medical powers of attorney. Because of your experiences, there may be certain preferences you have for health care treatment. In addition, your elder law attorney may advise you to include a broad gifting power in your financial power of attorney which may be necessary to help you qualify for government assistance.

You should also review your other estate planning documents to make sure that they still reflect how you wish your estate to pass at your death. Your elder law attorney may suggest adding provisions to protect a surviving spouse’s eligibility for Medicaid or other government assistance in case it is needed.

It may be that your estate plan will include trusts, or that certain assets will need to be retitled. An elder law attorney can guide you through this stage of your life to make sure that you are prepared for what the future holds.

Learn more about elder law and medicaid at our website.

Reference: The Houston Chronicle (April 19, 2019) “Learn about legal documents and Medicaid”

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Probate Lawyers Say Talk to Your Parents About Estate Planning

Probate lawyers say it's important to talk to your parents about estate planning.
Probate lawyers say it’s important to talk to your parents about estate planning.

Probate lawyers often meet with adult children who are trying to settle their parents’ estates. Many times these children are surprised by their parents’ financial situation and the lack of estate planning that their parents have done. When little or no estate planning has been done, it can be expensive and time consuming to deal with all the unresolved issues that  result. That’s why probate lawyers strongly encourage adult children to talk to their aging parents about their finances, their feelings about health care decisions, and whether they have an estate plan in place. But this is easier said than done. How do you start a conversation that includes a discussion of a family member’s mortality?

Sometimes the way to ease into a conversation with aging parents about money and their estate plan, is to discuss your own. If you want to know about their will or estate plan, start by explaining your own estate plan, how you’ve decided to set up your estate and then ask what they’ve done for themselves.

The conversation may feel awkward the first time you start it, says the Daily Local News in the article “Ask your folks about their financial plans,” but you need to get to where everyone is comfortable having the conversation. Your parents’ plans might impact yours, and visa versa. So, it’s good to talk “early and often” not only about your parents’ estate plan, but how they are planning for the costs of retirement, including health care.

It’s important for aging parents to understand that, if something happens to them, their children are the most likely ones to step in and take charge. Your parents need to understand that the more you know in advance, the better equipped you’ll be to make sure that their wishes are followed.

A good opening is to talk about your plans to save for retirement. Ask your parents what they did, or do, about 401(k) contributions. This will give you insight into how well-prepared and knowledgeable they are about retirement savings. If you’re house hunting, that’s an excellent opportunity to get them talking about their furture plans for living arrangements. Do you need to buy a home with a possible “in-law” suite in mind? It’s not a bad question to ask. It shows that you are thinking about their future needs.

Probate lawyers have seen how untangling an estate when there’s no will and no advance planning has been done can tear a family apart. That’s the last thing you or your parents want. Talking openly with them about money, trusts, wills, life insurance and advance medical directives, will give you an idea of what they have or have not done to plan for the future. It may spur your parents on to move forward with their estate plan, if they have been procrastinating.

Even if you learn that they haven’t done any planning and don’t have a will, that is better than not knowing until it’s too late. If you learn that this is the case, you can start educating them about what will happen if they don’t meet with an estate planning attorney. You can offer to take them to meet your estate planning attorney or to give them a few names so that they can decide who they are most comfortable with. This could help them avoid some common estate planning mistakes.

Setting up your own estate plan is another opportunity to ask your parents what they did and what their thoughts are about your  estate plan. Their family may have never done any estate planning, and they might have more than a few family horror stories to share. In that case, you can help them change the family’s dynamic by encouraging them to take a different path.

Reference: Barchart (April 16, 2019) “Ask your folks about their financial plans”

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