Estate planning should not only involve planning for estate administration after death, but also for estate administration after incapacity during life. The Alzheimer’s Association says that “everyone with a brain is at risk for Alzheimer’s.” Statistics show that the likelihood of developing some form of dementia over the age of 65 goes up dramatically. We cannot foresee the future.
If it is not Alzheimer’s or dementia, there may be some catastrophic event or accident, leaving an injury or an illness that creates some incapacity that prevents a person from being able to manage affairs and make decisions. Whether it is a physical incapacity or mental incapacity or both, planning for that possibility is an important consideration.
The default mechanism for dealing with the assets and decision making for a person who is incapacitated is guardianship. A guardianship is a Court proceeding. It requires an attorney. It requires a guardian who may, or may not, be someone that you would choose to handle your affairs and make decisions for you. Doing your own planning will ensure that you have control, at least to the extent that you have chosen the people who will handle your affairs and make your decisions with your own instructions. That is where Powers of Attorney come in.
Property Powers of Attorney
A Property Power of Attorney (also known as a “durable power of attorney”) allows a person to name an agent who has the authority to manage assets and made decisions in regard to property and finances. An agent named in a Power of Attorney is a fiduciary. That means that the agent has a legal obligation to handle the assets and make decisions for the benefit of the person who created the agency. An agent has a duty to refrain from self-dealing, a duty to preserve and protect the assets, a duty to invest assets in safe investment vehicles, a duty of accounting and other things.
The choice of your agent for a Property Power of Attorney is a critical one. It must be someone who you can trust and someone who is experienced and diligent, careful and willing to handle your affairs the same way that person would handle his or her own affairs.
Health Care Powers of Attorney
A Health Care Power of Attorney allows you to name an agent for the purpose of making personal and health care decisions if you are unable to make them for yourself. The Health Care Power of Attorney allows your agent to make all of the decisions that you might make for yourself.
Having a Property Power of Attorney and a Health Care Power of Attorney in place will avoid the necessity of a guardianship estate with the costs associated with paying an attorney, and the publicity involved in a Court proceeding. Powers of Attorney will keep your affairs private and in the control of the people that you choose.
Powers of attorney are (and should be) a part of every estate plan. Powers of attorney can also be used for limited and specific purposes. If you do not have powers of attorney in place for yourself and need some advice and help setting them up, please call us. We would be glad to help you.