Happy New Year 2018! Resolving to get your legal affairs in order is one of the most important things you can do to make sure your family, wishes, and assets are protected if something unexpectedly happens to you this year.
While many people focus on getting out of debt or getting organized for the New Year, estate planning is an equally important personal finance goal that should make every adult’s to-do list.
That’s because far too many area residents are without plans to protect their family, wishes and assets should something unexpectedly happen to them. A recent Lawyers.com survey further reveals that only 35% of adults have a basic will or other estate planning documents in place should death or incapacity occur.
Contrary to popular belief, estate planning isn’t just for the rich. At a bare minimum, every adult needs a basic will, power of attorney and health care directives in place to avoid a legal and financial nightmare if something unexpectedly happens to them.
So what are these documents and how do they help you in a time of emergency?
- Will – A will is a document that specifies what should happen to your assets if you pass away. A will may also contain guardian nominations to dictate who will care for your minor children if something unexpectedly happens to you.
- Trust – A trust is a legal entity that can hold title to property. With your assets securely placed in a trust, you can minimize your financial exposure to lawsuits, divorce, and bankruptcy while alive. Upon death, a trust will keep your affairs private and out of the probate court. It also allows a great deal of control for people who do not want their inheritance going outright to their heirs if something unexpected happens.
- Power of Attorney – A power of attorney or POA gives explicit permission for someone to access your personal accounts, pay your bills and handle all other financial and legal affairs if you are incapacitated in an accident but do not die. Under the current privacy laws, even a spouse may have a hard time accessing personal information without such documentation in place.
- Advanced Health Care Directive – Also known as a living will, this document specifies your healthcare wishes if you are incapacitated in an accident and unable to speak for yourself. Such wishes may range from whether you want certain medications administered to when (if at all) to start life support in critical situations. This document also allows you to appoint the person best suited to carry out such wishes should incapacity occur.
Accidents and serious illness happen every day without warning. That’s why it’s so important for any adult who has not tackled their estate planning to add it to their resolutions this year. It will save your family from years of headaches and thousands of dollars in unexpected costs should the unthinkable happen.
Make this your New Year’s resolution this month: “I will get my estate plan in place or updated.” Call me, Steve Worrall, your Marietta estate planning lawyer, at 770-425-6060 or email me at steve @ georgiaestateplan.com and let’s get your family protected and give you peace of mind for 2018 and beyond.
A Power of Attorney is a legal device that is used to give someone the power to act on your behalf if you are unable to. For example, if you have Alzheimer’s disease, there is a possibility that you will get to the point where it is no longer possible for you to make decisions. If a Power of Attorney (POA) is in place, this hand-selected person would step in for you. Without a Power of Attorney in place, the courts will decide whom that person will be through a very messy and costly process known as a Conservatorship.
I’m sure you will agree that you are in a much better position than the government is to decide who will speak for you. That’s why it’s important to have a Power of Attorney in place before something happens so there is never a need to involve the courts.
As far as logistics, a POA goes into effect the moment you sign it, and the Power of Attorney will expire when you decide it will.
When you talk to your estate planning lawyer in Marietta, he or she will give you the options for termination. One option is to stipulate a certain termination date. For example, military personnel may choose to set up a Power of Attorney only for the period that they are deployed.
Every POA terminates upon the grantor’s death. This means that the person that you selected as your Power of Attorney would not be able to handle any financial matters on your behalf when you pass away. If you want to select the person that handles your affairs after you pass, you’ll need to name them the executor of your estate.
You can also cancel or revoke a POA at any time that you choose to. You can do so by destroying the original document and preparing a new one, or by preparing a revocation document that informs everyone involved that the POA is no longer valid.
Giving someone control over your financial matters should be well thought out. It’s best to speak to an experienced estate planning attorney in Marietta, Georgia, who can fully explain your options and help you select the one that works best for you.
If you would like to learn more about setting up a Power of Attorney, give our East Cobb estate planning law firm a call at 770-425-6060.
It’s Christmas time and as an East Cobb Wills Lawyer, I look for fun ways to relate legal concepts in popular media. The novelty Christmas song, “Grandma Got Run Over by a Reindeer,” written by Randy Brooks and first recorded by Elmo and Patsy in 1979, is about a grandmother who gets intoxicated on Christmas Eve from drinking too much eggnog at a family gathering. To complicate matters she has forgotten to take her medication and she ignores warnings from her family. As a result, she staggers outside into a snowstorm. On her way home, she is allegedly trampled by Santa Claus’s reindeer-pulled sleigh. At the next day’s Christmas “festivities,” instead of celebrating the holiday, “all the family’s dressed in black.” Grandpa acts as if nothing has happened, and is drinking beer, watching football and playing “cards with cousin Mel.” The song suggests that Santa, “a man who drives a sleigh and plays with elves,”is unfit to drive and that the listening public should be wary of him, as a menace to society.
Since I’m an Estate Planning lawyer, I can’t just leave it there. I wonder about Grandma’s estate. (Yes, I do that sort of thing.)
Imagine Grandma survived the attack but was still seriously injured. After the collision, she is unconscious and unresponsive. Her doctor declares her legally incompetent. What happens to Grandma and her stuff depends on what estate planning Grandma and Grandpa have put into place.
First, assume that, like two out of three of us, Grandma and Grandpa have NOT done proper estate planning. When Grandma is admitted to the hospital, since she does not have an Advance Directive for Health Care, she has no control over who will make health care decisions for her now that she can’t communicate her wishes. Under Georgia’s Medical Consent Law, the next of kin can consent if the patient is unable to do so. The spouse is the first option for a patient who is married. So it’s all up to Grandpa. Yep, he’ll get around to deciding that right after the next round of cards.
For another scenario, let’s assume Grandma makes it, but her care is getting expensive. She and Grandpa had maintained separate bank accounts all these years. Grandma’s pension is in her account and all of the household bills are in her name. Grandpa will have to go through a lengthy, public and costly court process to be appointed as Grandma’s guardian and conservator to access Grandma’s pension to pay hospital and household expenses. He will most likely have to post a bond to make sure he doesn’t mishandle Grandma’s money. This process will take several weeks and will cost several thousand dollars. Considering Grandpa’s greater interest in drinking beer and playing cards, it will probably be a hefty bond.
Now, let’s look several months down the road from the horrific attack. Sadly, Grandma does not make it, and finally, “all the family’s dressed in black.” So NOW what happens to Grandma’s property?
Sadly, Grandma did not have a Last Will and Testament. Are you surprised? Georgia’s laws of intestate succession provide the default or “do nothing” plan. It is a one-size fits all Will (sort of like Grandpa’s overalls) that says Grandma’s estate will be split between Grandpa and her unnamed children. Let’s assume Grandma and Grandpa had two children, Elmo and Patsy. Grandpa receives the same size share as each child (but not less than one third) and Elmo and Patsy will also receive one third each. Don’t worry about old Cousin Mel getting anything: before she would become an heir, Grandma’s spouse, children, and all grandchildren, parents and siblings would have had to have predeceased her before Mel, a cousin, receives anything. Okay, so maybe Mel will get the playing cards.
Just like the guardianship and conservatorship, this matter will be handled in the probate court, and is likewise a public, time-consuming, and costly process. Not the smartest of options, but not an unlikely result, considering this silly family.
Let’s look at a more controlled and alternative outcome to the tragic situation now. This time, because she was thinking ahead, Grandma had signed an Advance Directive for Health Care naming Sister Sally as her health care agent. Since Grandma is now unable to communicate her wishes, Sally can make her health care decisions for her. She can admit Grandma to the hospital and request, consent to treatment or withdraw treatment. (And, unlike Grandpa, Sister Sally won’t hesitate!)
this time Grandma also has a durable power of attorney and a revocable living trust, so when she became incapacitated, Sister Sally is able to immediately act on her behalf to handle her finances as her agent or “attorney in fact.” This works out better for Grandpa, too. Instead of having to file for guardianship and conservatorship over Grandma, he could keep his scheduled card games with the guys. Sally becomes the successor Trustee and gained access to Grandma’s money with minimal time and expense and it was all handled privately.
Grandma’s living trust was fully funded (meaning the title of all of her accounts and property were transferred to it), so when she ultimately passed on, her family did not have to go through the several months of delays and costs of a public probate process (several thousand dollars more), but instead was able to have immediate access to the money and property. Sally took a modest fee allotted by Grandma for her efforts as trustee and transferred funds to Grandpa as he needed them.
So the next Christmas, the goose was on the table, as was the pudding made of fig. As the blue and silver candle that matched the hair in Grandma’s wig flickered, everyone remembered Grandma fondly, as they all waited for the jury award in Grandma’s lawsuit against Santa.
And they all lived happily ever after.
(Adapted from a prior post co-written by Steve Worrall and Shelia Manely, originally posted here)
If for any reason, you become unhappy with the person you have appointed to make decisions for you under a durable power of attorney, you may revoke the power of attorney at any time. Here are a few steps From your neighborhood East Cobb estate planning lawyer that you should take to ensure the document is properly revoked.
While any new power of attorney should state that old powers of attorney are revoked, you should also put the revocation in writing. The revocation should include your name, a statement that you are of sound mind, and your wish to revoke the power of attorney. You should also specify the date the original power of attorney was executed and the person selected as your agent. Sign the document and send it to your old agent as well as any institutions or agencies that have a copy of the power of attorney. Attach your new power of attorney if you have one.
You will also need to get the old power of attorney back from your agent. If you can’t get it back, send the agent a certified letter, stating that the power of attorney has been revoked.
Because a durable power of attorney is the most important estate planning instrument available, if you revoke a power of attorney, it is important to have a new one in place. Your East Cobb estate planning lawyer can assist you in revoking an old power of attorney or drafting a new one.
The benefits of a highly detailed, comprehensive power of attorney in Georgia are numerous. Unfortunately, many powers of attorney are more general in nature and can actually cause more problems than they solve, especially for our senior population. Here are some of the provisions that should be included. A proper starting point is to emphasize that the proper use of a power of attorney as an estate planning and elder law document depends on the reliability and honesty of the appointed agent.
The agent under a power of attorney has traditionally been called an “attorney-in-fact” or sometimes just “attorney.” However, confusion over these terms has encouraged the terminology to change so more recent state statutes tend to use the label “agent” for the person receiving power by the document.
The “law of agency” governs the agent under a power of attorney. The law of agency is the body of statutes and common law court decisions built up over centuries that dictate how and to what degree an agent is authorized to act on behalf of the “principal”—in other words, the individual who has appointed the agent to represent him or her. Powers of attorney are a species of agency-creating document. In most states, powers of attorney can be and most often are unilateral contracts – that is, signed only by the principal, but accepted by the agent by the act of performance.
Much has been written about financial exploitation of individuals, particularly seniors and other vulnerable people, by people who take advantage of them through undue influence, hidden transactions, identity theft and the like. Even though exploitation risks exist, there are great benefits to one individual (the principal) privately empowering another person (the agent) to act on the principal’s behalf to perform certain financial functions.
A comprehensive power of attorney may include a grant of power for the agent to represent and advocate for the principal in regard to health care decisions. Such health care powers are more commonly addressed in a separate “health care power of attorney,” which may be a distinct document or combined with other health topics in an “advance health care directive.”
Another important preliminary consideration about powers of attorney is “durability.” Powers of attorney are voluntary delegations of authority by the principal to the agent. The principal has not given up his or her own power to do these same functions but has granted legal authority to the agent to perform various tasks on the principal’s behalf. All states have adopted a “durability” statute that allows principals to include in their powers of attorney a simple declaration that no power granted by the principal in this document will become invalid upon the subsequent mental incapacity of the principal. The result is a “durable power of attorney” – a document that continues to be valid until a stated termination date or event occurs, or the principal dies. Absent durability provisions, the power of attorney terminates upon the principal’s death or incapacity.
Having covered the explanation of what a durable power of attorney is, let us look at the top 10 benefits of having a comprehensive durable power of attorney.
1. Provides the ability to choose who will make decisions for you (rather than a court).
If someone has signed a power of attorney and later becomes incapacitated and unable to make decisions, the agent named can step into the shoes of the incapacitated person and make important financial decisions. Without a power of attorney, a guardianship or conservatorship may need to be established, and can be very expensive.
2. Avoids the necessity of a guardianship or conservatorship.
Someone who does not have a comprehensive power of attorney at the time they become incapacitated would have no alternative than to have someone else petition the court to appoint a guardian or conservator. The court will choose who is appointed to manage the financial and/or health affairs of the incapacitated person, and the court will continue to monitor the situation as long as the incapacitated person is alive. While not only a costly process, another detriment is the fact that the incapacitated person has no input on who will be appointed to serve.
3. Provides family members a good opportunity to discuss wishes and desires.
There is much thought and consideration that goes into the creation of a comprehensive power of attorney. One of the most important decisions is who will serve as the agent. When a parent or loved one makes the decision to sign a power of attorney, it is a good opportunity for the parent to discuss wishes and expectations with the family and, in particular, the person named as agent in the power of attorney.
4. The more comprehensive the power of attorney, the better.
As people age, their needs change and their power of attorney should reflect that. Seniors have concerns about long-term care, applying for government benefits to pay for care, as well as choosing the proper care providers. Without allowing, the agent to perform these tasks and more, precious time and money may be wasted.
5. Prevents questions about principal’s intent.
Many of us have read about court battles over a person’s intent once that person has become incapacitated. A well-drafted power of attorney, along with other health care directives, can eliminate the need for family members to argue or disagree over a loved one’s wishes. Once written down, this document is excellent evidence of their intent and is difficult to dispute.
6. Prevents delays in asset protection planning.
A comprehensive power of attorney should include all of the powers required to do effective asset protection planning. If the power of attorney does not include a specific power, it can greatly dampen the agent’s ability to complete the planning and could result in thousands of dollars lost. While some powers of attorney seem long, it is necessary to include all of the powers necessary to carry out proper planning.
7. Protects the agent from claims of financial abuse.
Comprehensive powers of attorney often allow the agent to make substantial gifts to self or others in order to carry out asset protection planning objectives. Without the power of attorney authorizing this, the agent (often a family member) could be at risk for financial abuse allegations.
8. Allows agents to talk to other agencies.
An agent under a power of attorney is often in the position of trying to reconcile bank charges, make arrangements for health care, engage professionals for services to be provided to the principal, and much more. Without a comprehensive power of attorney giving authority to the agent, many companies will refuse to disclose any information or provide services to the incapacitated person. This can result in a great deal of frustration on the part of the family, as well as lost time and money.
9. Allows an agent to perform planning and transactions to make the principal eligible for public benefits.
One could argue that transferring assets from the principal to others in order to make the principal eligible for public benefits–Medicaid and/or non-service-connected Veterans Administration benefits–is not in the best interests of the principal, but rather in the best interests of the transferees. In fact, one reason that a comprehensive durable power of attorney is essential in elder law is that a Judge may not be willing to authorize a conservator to protect assets for others while enhancing the ward/protected person’s eligibility for public benefits. However, that may have been the wish of the incapacitated person and one that would remain unfulfilled if a power of attorney were not in place.
10. Provides immediate access to critical assets.
A well-crafted power of attorney includes provisions that allow the agent to access critical assets, such as the principal’s digital assets or safety deposit box, to continue to pay bills, access funds, etc. in a timely manner. Absent these provisions, court approval will be required before anyone can access these assets. Digital assets are also important because older powers of attorney did not address digital assets, yet more and more individuals have digital accounts.
11. Provides peace of mind for everyone involved.
Taking the time to sign a power of attorney lessens the burden on family members who would otherwise have to go to court to get authority for performing basic tasks, like writing a check or arranging for home health services. Knowing this has been taken care of in advance is of great comfort to families and loved one.
This discussion of Why Everyone in Georgia Needs a Comprehensive Power of Attorney could be expanded by many more. Which benefits are most important depends on the situation of the principal and their loved ones. This is why a comprehensive power of attorney is so essential: Nobody can predict exactly which powers will be needed in the future. The planning goal is to have a power of attorney in place that empowers a succession of trustworthy agents to do whatever needs to be done in the future. Please call us at 770.425.6060 if we can be of assistance in any way or if you have any questions about durable powers of attorney.
Georgia Parents of Graduating Seniors:
Did you know…
Now that your graduating senior is “legally” an adult, you can no longer make important medical or financial decisions on his or her behalf?
UNLESS you have these 3 things in place…… (see below to discover how EASY it is to legally intervene if your child is injured or otherwise unable to speak on his or her behalf!)
Your graduating senior may still be your baby, but in the eyes of the law he or she is now an ADULT!
That means you can no longer make important medical or financial decisions for your child without their permission.
But let’s face it….your job of being a PARENT doesn’t stop just because your child turns 18. If there’s a medical emergency or your child asks for financial help, you NEED the ability to cut through the legal red tape and get involved.
FACT: Doctors, hospitals or financial institutions will NOT bend the rules on this! It’s against privacy laws. You must have 3 KEY DOCUMENTS in place to make important medical or financial decisions on your child’s behalf (just imagine the nightmare of your child getting hurt hundreds of miles away at school and the hospital refuses to give you so much as a status update!).
I call these 3 key documents the Parent Sanity Protection Kit, as they give you the legal permission you need to HELP your child and avoid more gray at the same time!
Advance Health Care Directive
Financial Power of Attorney
To ensure your child is protected before the summer or college starts, you can now receive this critical Parent Sanity Protection Kit just $350 when you call 770.425.6060 and schedule your appointment by June 30th.
P.S. – Graduation Gift for YOU, too, Moms and dads: Mention this blog post and receive a FREE Georgia Family Treasures Planning Session (normally $750) to go over YOUR will, trust or other legal documents! Having an “adult” child is a huge life-change for mom or dad too and your estate planning documents must be updated accordingly!