Estate planning is not exclusively confined to monetary matters. When you talk to an estate planning attorney about the realities that we all face, you will be reminded about the period of time that may precede your passing.
Think about it logically. You are probably not going to be healthy one day, and dead the next. If you are fortunate enough to live a normal life span, you may well go through a period of incapacity before you pass away. This possibility is something to prepare for in advance.
If you were to become unable to make your own sound decisions as an elder, interested parties may notice this. For your own good someone may petition the court to appoint a guardian to take over your affairs.
There are potential problems with this course of action, even though it may have been well intended. The court may appoint someone that you would not have chosen if you made the choice when you were still of sound mind. Ultimately, your affairs may be handled in a way that you would never have approved of before your incapacitation.
There is also the matter of well-meaning family members disagreeing with regard to the correct course of action. One person may think that a guardian is called for, and another may not. Even if all interested parties agree that someone needs to start making decisions in your behalf, they may not agree with regard to whom this decision-maker should actually be. After the court makes a determination hard feelings could linger.
Durable Financial Power of Attorney
You can take steps in advance to make sure that a guardianship proceeding is never necessary. One way that you could go about it would be to execute a legally binding document called a durable power of attorney for financial affairs.
With this document you name an agent or attorney-in-fact. This individual does not have to actually be an attorney in the real sense.
Once you execute this document your agent will be empowered to make financial decisions in your behalf. Because of the “durable” designation, the power of attorney remains in effect even if you become incapacitated. A power of attorney that is not designated as durable would not remain in effect upon your incapacitation.
Some people want to prepare for the possibility of incapacity, but they don’t want to give authority to the agent until and unless they become incapacitated.
This can be done through the execution of a legal device called a springing durable power of attorney. This type of power of attorney only becomes effective if it can be proven that the grantor or principal has become incapacitated and unable to make sound independent decisions.
- Five Ways You Can Unintentionally Unravel Your Estate Plan - July 28, 2022
- What Is Estate Planning? - July 12, 2022
- Securing a Strong Retirement Act Has Been Approved By House - June 23, 2022