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What Is So Important About Powers Of Attorney?

Signing important legal documents
Picture of hand signing a legal document

Powers of attorney can provide significant authority to another person, if you are unable to do so. These powers can include the right to access your bank accounts and to make decisions for you.

AARP’s article from last October entitled, “Powers of Attorney: Crucial Documents for Caregiving,” describes the different types of powers of attorney.

Just like it sounds, a specific power of attorney restricts your agent to taking care of only certain tasks, such as paying bills or selling a house. This power is typically only on a temporary basis.

A general power of attorney provides your agent with sweeping authority. The agent has the authority to step into your shoes and handle all of your legal and financial affairs.

The authority of these powers of attorney can stop at the time you become incapacitated. Durable powers of attorney may be specific or general. However, the “durable” part means your agent retains the authority, even if you become physically or mentally incapacitated. In effect, your family probably won’t need to petition a court to intervene, if you have a medical crisis or have severe cognitive decline like late stage dementia.

In some instances, medical decision-making is part of a durable power of attorney for health care. This can also be addressed in a separate document that is just for health care, like an advanced health care directive or durable power of attorney for health care.

There are a few states that recognize “springing” durable powers of attorney. With these, the agent can begin using her authority, only after you become incapacitated. Other states don’t have these, which means your agent can use the document the day you sign the durable power of attorney.

A well-drafted power of attorney helps your agent help you, because she can keep the details of your life addressed, if you cannot. That can be things like applying for financial assistance or a public benefit, such as Medicaid, or verifying that your utilities stay on and your taxes get paid. Attempting to take care of any of these things without the proper document can be almost impossible.

In the absence of proper incapacity legal planning, your loved ones will need to initiate a court procedure known as a guardianship or conservatorship. However, these hearings can be expensive, time-consuming and contested by family members who don’t agree with moving forward.

Don’t wait to do this. Every person who’s at least age 18 should have a power of attorney in place. If you do have a power of attorney, be sure that it’s up to date.  Speak with one of our experienced estate planning attorneys at Family Security Law Group, APC to help you create these documents.

Reference: AARP (October 31, 2019) “Powers of Attorney: Crucial Documents for Caregiving”

 

What Critical Estate Planning Document are Californians Missing?

california estate planning documents

The California Probate Code sets out the requirements and process for executing a Durable Power of Attorney for Assets and an Advance Health Care Directive, also known as a health care power of attorney. These documents enable a person (the principal) to appoint an agent (a trusted friend or relative) to make financial and health care decisions on her behalf.   If the principal, becomes incapacitated, the agent will decide her medical procedures, treatment and other care and manage her financial affairs.

Insurance News Net’s recent article entitled “Finance Experts Warn: 66% of Californians Don’t Have a Key Estate Planning Document” explains that the law enables the principal to do the following:

  • Detail specific instructions on certain medical issues, such as end-of-life care and pain relief;
  • State her wishes concerning the donation of organs;
  • Name a physician who has primary responsibility for medical care; and,
  • Detail specific instructions to handle financial accounts and matters.

Too many people think they’re finished with their estate plan, after creating a will or trust. However, that leaves some critical gaps. A comprehensive, well-crafted estate plan isn’t just what happens to your property at death. It should also contemplate what happens if you’re incapacitated and unable to make decisions on your own, which is addressed with a durable power of attorney for assets and an advance health care directive.

Here’s a tough situation that individuals could experience without a power of attorney for assets and a health care power of attorney, especially for family. If you don’t have a power of attorney for assets, your spouse or children will have difficultly gaining access to your financial accounts to continue paying your monthly expenses and possible health care related expenses while your incapacitated.  If you don’t have a health care directive, your medical care might be on hold. Despite that the fact you express your wishes to someone, that doesn’t mean it’s legally binding. As a result, without a power of attorney for assets and health care, the only way your spouse, children, or other family members can obtain the authority to make health care decisions, is to go to court and file a petition to act on your behalf. This can take some time, especially if they’re not all in agreement and can incur unnecessary expenses.

By preparing an advance health care directive, you give your agent decision-making authority via the document instead of through the courts.

There are certain state-specific requirements involved with this process, like having people observe and sign as witnesses, or even having it notarized. Our qualified estate planning attorneys are here to help you draft it correctly.

Reference: Insurance News Net (Jan. 16, 2020) “Finance Experts Warn: 66% of Californians Don’t Have a Key Estate Planning Document”

Why you need an estate plan

Here’s Why You Need an Estate Plan

It’s always the right time to do your estate planning, but it’s most critical when you have beneficiaries who are minors or with special needs, says the Capital Press in the recent article, “Ag Finance: Why you need to do estate planning.”

While it’s likely that most adult children can work things out, even if it’s costly and time-consuming in probate, minor young children must have protections in place. Wills are frequently written, so the estate goes to the child when he reaches age 18. However, few teens can manage big property at that age. A trust can help, by directing that the property will be held for him by a trustee or executor until a set age, like 25 or 30.

Probate is the default process to administer an estate after someone’s death, when a will or other documents are presented in court and an executor is appointed to manage it. It also gives creditors a chance to present claims for money owed to them. Distribution of assets will occur only after all proper notices have been issued, and all outstanding bills have been paid.

Probate can be expensive. However, wise estate planning can help most families avoid this and ensure the transition of wealth and property in a smooth manner. Talk to an experienced estate planning attorney about establishing a trust. Farmers can name themselves as the beneficiaries during their lifetime, and instruct to whom it will pass after their death. A living trust can be amended or revoked at any time, if circumstances change.

The title of the farm is transferred to the trust with the farm’s former owner as trustee. With a trust, it makes it easier to avoid probate because nothing’s in his name, and the property can transition to the beneficiaries without having to go to court. Living trusts also help in the event of incapacity or a disease, like Alzheimer’s, to avoid conservatorship (guardianship of an adult who loses capacity). It can also help to decrease capital gains taxes, since the property transfers before their death.

If you have several children, but only two work with you on the farm, an attorney can help you with how to divide an estate that is land rich and cash poor.

Reference: Capital Press (December 20, 2018) “Ag Finance: Why you need to do estate planning”

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