King & Wood, P.A.

What are Alternatives to Guardianship?

“We all want to protect vulnerable people from harm. However, taking away all their rights usually isn’t the place to start. Instead, there are several less severe options that could be the right way to go.”

Guardianships are drastic and very invasive. They strip individuals of their legal autonomy and establish the guardian as the sole decision maker. To become a guardian requires strong evidence of legal incapacity, and approval by a judge, explains an article titled “Guardianships Should Be a Last Resort–Consider These Less Draconian Options First” from Kiplinger. They should not be undertaken unless there is a serious need to do so. Once they’re in place, guardianships are difficult to undo.

If an elderly person with dementia failed to make provisions durable powers of attorney for health care and for financial matters before becoming ill, a guardianship may be the only ways to protect the person and their estate. There are also instances where an aging parent is unable to care for themselves properly but refuses any help from family members.

Another scenario is an aging grandparent who plans to leave funds for minor beneficiaries. Their parents will need to seek guardianships, so they can manage the money until their children reach the age of majority.

Laws vary from state to state, so if you might need to address this situation, you’ll need to speak with an estate planning attorney in the elderly parent or family member’s state of residence. For the most part, each state requires less restrictive alternatives to be attempted before guardianship proceedings are begun.

Alternatives to guardianship include limited guardianship, focused on specific aspect of the person’s life. This can be established to manage the person’s finances only, or to manage only their medical and health care decisions. Limited guardianships need to be approved by a court and require evidence of incapacity.

Powers of attorney can be established for medical or financial decisions. This is far less burdensome to achieve and equally less restrictive. A Healthcare Power of Attorney will allow a family member to be involved with medical care, while the Durable General Power of Attorney is used to manage a person’s personal financial affairs.

Some families take the step of making a family member a joint owner on a bank, home, or an investment account. This sounds like a neat and simple solution, but assets are vulnerable if the co-owner has any creditor issues or risk exposure. A joint owner also doesn’t have the same fiduciary responsibility as a POA.

An assisted decision-making agreement creates a surrogate decision-maker who can see the incapacitated person’s financial transactions. The bank is notified of the arrangement and alerts the surrogate when it sees a potentially suspicious or unusual transaction. This doesn’t completely replace the primary account holder’s authority. However, it does create a limited means of preventing exploitation or fraud. The bank is put on notice and required to alert a second person before completing potentially fraudulent transactions.

Trusts can also be used to protect an incapacitated person. They can be used to manage assets, with a contingent trustee. For an elderly person, a co-trustee can step in if the grantor loses the capacity to make good decisions.

Planning in advance is the best solution for incapacity. Talk with an experienced estate planning attorney to protect loved ones from having to take draconian actions to protect your best interests.

Reference: Kiplinger (July 7, 2022) “Guardianships Should Be a Last Resort–Consider These Less Draconian Options First”

What are Alternatives to Guardianship?

“We all want to protect vulnerable people from harm. However, taking away all their rights usually isn’t the place to start. Instead, there are several less severe options that could be the right way to go.”

Guardianships are drastic and very invasive. They strip individuals of their legal autonomy and establish the guardian as the sole decision maker. To become a guardian requires strong evidence of legal incapacity, and approval by a judge, explains an article titled “Guardianships Should Be a Last Resort–Consider These Less Draconian Options First” from Kiplinger. They should not be undertaken unless there is a serious need to do so. Once they’re in place, guardianships are difficult to undo.

If an elderly person with dementia failed to make provisions durable powers of attorney for health care and for financial matters before becoming ill, a guardianship may be the only ways to protect the person and their estate. There are also instances where an aging parent is unable to care for themselves properly but refuses any help from family members.

Another scenario is an aging grandparent who plans to leave funds for minor beneficiaries. Their parents will need to seek guardianships, so they can manage the money until their children reach the age of majority.

Laws vary from state to state, so if you might need to address this situation, you’ll need to speak with an estate planning attorney in the elderly parent or family member’s state of residence. For the most part, each state requires less restrictive alternatives to be attempted before guardianship proceedings are begun.

Alternatives to guardianship include limited guardianship, focused on specific aspect of the person’s life. This can be established to manage the person’s finances only, or to manage only their medical and health care decisions. Limited guardianships need to be approved by a court and require evidence of incapacity.

Powers of attorney can be established for medical or financial decisions. This is far less burdensome to achieve and equally less restrictive. A Healthcare Power of Attorney will allow a family member to be involved with medical care, while the Durable General Power of Attorney is used to manage a person’s personal financial affairs.

Some families take the step of making a family member a joint owner on a bank, home, or an investment account. This sounds like a neat and simple solution, but assets are vulnerable if the co-owner has any creditor issues or risk exposure. A joint owner also doesn’t have the same fiduciary responsibility as a POA.

An assisted decision-making agreement creates a surrogate decision-maker who can see the incapacitated person’s financial transactions. The bank is notified of the arrangement and alerts the surrogate when it sees a potentially suspicious or unusual transaction. This doesn’t completely replace the primary account holder’s authority. However, it does create a limited means of preventing exploitation or fraud. The bank is put on notice and required to alert a second person before completing potentially fraudulent transactions.

Trusts can also be used to protect an incapacitated person. They can be used to manage assets, with a contingent trustee. For an elderly person, a co-trustee can step in if the grantor loses the capacity to make good decisions.

Planning in advance is the best solution for incapacity. Talk with an experienced estate planning attorney to protect loved ones from having to take draconian actions to protect your best interests.

Reference: Kiplinger (July 7, 2022) “Guardianships Should Be a Last Resort–Consider These Less Draconian Options First”

What Happens to Investment Accounts when Someone Dies?

“What investment powers does a personal representative in a probate or a trustee in a trust administration have to manage the decedent’s assets?”

Taking responsibility for a decedent’s probate or trust estate often involves managing significant amounts of wealth, whether they are brokerage accounts or cash assets. Today’s volatile markets add another level of complexity to this responsibility. The article “Estate Planning: Investments during administration of decedent’s estate” from Lake County News explains what estate administrators, executors and trustees need to know as they take on these tasks.

Investment account values are in a constant state of change and may include assets now considered too risky because they are owned by the estate and not the individual. The administrator will need to evaluate the accounts in light of debts owed by the decedent, the costs in administering the estate and any gifts to be made before the estate will be closed.

At the same time, too much cash on hand could mean unproductive assets earning less than they could, losing value to inflation. If there is a long time between the death of the owner and the date of distribution, depending on markets and interest rates, having too much cash could be detrimental to the beneficiaries.

The personal representative or trustee, as relevant, may determine that the cash should be invested, shift how existing investments are managed, or decide to sell investments to generate cash needed for debts, expenses and distributions to beneficiaries.

A personal representative is not expected or required to be a stock market expert. Their duties are to manage estate assets as a person making prudent decisions for the betterment of the estate and heirs. They must put the interest of the estate above their own and not make any speculative investments. With the exception of checking accounts, the expectation is for estate accounts to earn something, even if it is only interest.

If the personal representative has the authority to do so, they may invest in very low-risk debt assets. If the will includes investment powers and if certain conditions safeguarding payment of the decedent’s debts and expenses are satisfied, the personal representatives may invest using those powers. In some instances, a court order may be needed. An estate planning attorney will be able to advise based on the laws of the state in which the decedent resided.

For a trust, the trustee has a fiduciary duty to invest and manage trust assets for beneficiaries. Assets should be made productive, unless the trust includes specific directions for the use of assets prior to distribution. The longer the trust administration takes and the larger the value of the trust, the more important this becomes.

In all scenarios, investment decisions, including balancing risk and reward, must be made in the context of an overall investment strategy for the benefit of heirs. Investments may be delegated to a professional investment advisor, but the selection of the advisor must be made cautiously. The advisor must be selected prudently and the scope and terms of the selection of the advisor must be consistent with the purposes and terms of the trust. The trustee or executor must personally monitor the advisor’s performance and compliance with the overall strategy.

Reference: Lake County News (June 11, 2022) “Estate Planning: Investments during administration of decedent’s estate”

How Do I Store Estate Planning Documents?

“A common dilemma that families face upon the incapacity or death of a loved one is locating estate planning documents. While preparing the documents are the most important step, that is irrelevant if the documents are lost when they most need to be used.”

It’s a common series of events: an elderly parent is rushed to the hospital in the middle of the afternoon and once children are notified, the search for the Power of Attorney, Living Will and Health Care Power of Attorney begins. It’s easily avoided with planning and communication, according to an article from The News-Enterprise titled “Give thought to storing your estate papers.” However, just because the solution is simple doesn’t mean most people address it.

As a general rule, estate planning documents should be kept together in a fire and waterproof container in a location known to fiduciaries.

Most people think of a bank safe deposit box as a protected place. However, it’s not a good location for several reasons. Individuals may not have access to the contents of the safe deposit box, unless they are named on the account. Even with their names on the account, emergencies don’t follow bankers’ hours. If the Power of Attorney giving the person the ability to access the safe deposit box is inside the safe deposit box, bank officials are not likely to be willing to open the box to an unknown person.

A well-organized binder of documents in a fire and waterproof container at home makes the most sense.

Certain documents should be given in advance to certain agencies or offices. For instance, health care documents, like the Health Care Power of Attorney and Advance Medical Directive (or Living Will) should be given to each healthcare provider to keep in the person’s medical record and be sure they are accessible 24/7 to health care providers. Make sure that there are copies for adult children or whoever has been designated to serve as the Health Care Power of Attorney.

Power of Attorney documents should be given to each financial institution or agency in preparation for use, if and when the time comes.

It may feel like an overwhelming task to contact banks and brokerage houses in advance to make sure they accept a Power of Attorney form in advance. However, imagine the same hours plus the immense stress if this has to be done when a parent is incapacitated or has died. Banks, in particular, require POAs to be reviewed by their own attorneys before the document can be approved, which could take weeks to complete.

Depending upon where you live, Durable General Powers of Attorney may be filed at the county clerk’s office. If a POA is filed but is later revoked and a new document created, or if a fiduciary needs to convey real estate property with the powers conferred by a POA, the document at the county clerk’s office should be updated.

Last will and testaments are treated differently than POA documents. Wills are usually kept at home and not filed anywhere until after death.

Each fiduciary listed in the documents should be given a copy of the documents. This will be helpful when it’s time to show proof they are a decision maker.

Having estate planning documents properly prepared by an experienced estate planning attorney is the first step. Step two is ensuring they are safely and properly stored, so they are ready for use when needed.

Reference: The Times-Enterprise (June 11, 2022) “Give thought to storing your estate papers”

What Is Better, a Trust or a Will?

“Preparing an estate plan for managing and distributing your assets in the case of death is one of the most important steps you could take to protect and provide for loved ones.”

Estate plans come in all sizes and shapes. One of the decisions in creating an estate plan is whether a trust should be part of your plan, as detailed in this recent article titled “Trust vs. Will: What They Share (And 6 Ways They are Different)” from Yahoo! Money. Both trusts and wills give control over how assets are distributed. However, there are differences.

A trust is a tool for asset protection during and after life, created by an estate planning attorney. When the trust is created, assets are transferred into the trust, which is a legal entity. If it’s a revocable trust, typically you are the grantor, trustee, and beneficiary. There are also other roles, like the successor trustee, who is the trustee if the primary is incapacitated and the beneficiary, the person who receives the assets. The trustee is a fiduciary and responsible for managing the assets for the best interest of the beneficiary.

There are many different types of trusts, but they mainly fall into two categories:

Revocable or living trusts allow the grantor full control of the trust. The trust assets are outside of the probate estate. Revocable trusts can be changed, assets may be added and beneficiaries can be changed. However, there’s no protection from creditors and no unique tax benefits.

Irrevocable living trusts transfer assets upon death without going through probate. They provide stronger asset protection. Assets in an irrevocable trust are not accessible to creditors and, depending on how they are set up, may place assets outside of the taxable estate.

There are also many specialized trusts. A Special Needs Trust is used to care for a person with special needs, while maintaining their government benefits. A spendthrift trust can be used to leave assets for people who aren’t capable (or interested) in managing funds responsibly. Trusts provide significantly more control over assets after death than wills. They may also be harder to contest after death, since they go into effect while you are living and may remain in effect for many years.

Wills are used to provide specific directions about how you want to distribute assets upon your death. The will goes through probate, where the court determines if the will is valid, if the executor is acceptable and then the will becomes part of the public record. Creditors can make claims against the estate, family members may challenge the will and depending upon where you live, it could take many months or several years to settle the estate.

How are trusts and wills different?

1—Trusts can be more complex than wills and require management. The will goes into effect upon your death, and you can change a will whenever you want. You also can change a trust whenever you want, but only if it is revocable.

2—Trusts go into effect immediately and they need to be funded, so you’ll have to transfer assets to the trust.

3—A trust is a separate legal entity, so assets are shielded from estate and inheritance taxes. Certain trusts do pay taxes, so speak with your estate planning attorney about how this may work for you.

4—Certain trusts put assets well beyond the reach of creditors. However, a trust may not be created solely for this purpose, since it could be deemed invalid by a court. However, in most cases, trusts work well to protect assets to pass them along to beneficiaries. A will offers no such protection, unless a “testamentary” trust is created under the will. This will created trust can operate exactly as an inheritance trust created for loved ones after you die and your revocable trust becomes irrevocable.

5—Planning for incapacity should be part of any estate plan. Once a trust is set up and funded, the assets immediately enjoy the protection by having a successor trustee to be in charge of assets if the grantor/trustee becomes incapacitated. A will only addresses what happens after you die, not what happens if you become too sick or are injured and can’t manage your affairs.

6—The trust is the winner when it comes to control over assets after death, if you want to avoid probate. You can instruct the trustee to distribute funds to beneficiaries only under certain conditions and terms. If you want beneficiaries to finish college, for instance, you can direct the trustee to distribute a certain amount of money only after the person completes an undergraduate degree. You can also use the money to pay for their college education.

For most people, a combination of a will and trust works to control assets, prepare for incapacity and, just as importantly, provide peace of mind.

Bottom line: estate planning is complicated, not a do-it-yourself project and should be done with the counsel of an experienced estate planning attorney.

Reference: Yahoo! Money (June 5, 2022) “Trust vs. Will: What They Share (And 6 Ways They are Different”

Your Cryptocurrency and NFTs Need to Be Included in Your Estate Plan

“Handled incorrectly, these popular assets could go poof. You need a password-sharing plan, a plan for naming beneficiaries and possibly a trust.”

As more people continue to purchase cryptocurrencies and non-fungible tokens (NFTs), digital assets are becoming a bigger part of the investment world and of people’s estate plans. If you want to pass these assets to loved ones upon death, you’ll need to plan for it, says the article “Got Cryptocurrency or NFTs? They Need to Be in Your Estate Plan” from Kiplinger. Otherwise, securing, transferring and gifting crypto and NFTs can create unsolvable problems and lost assets.

There are many different kinds of crypto and NFTs, with Bitcoin, Ethereum, Binance Coin, Thether among them. An NFT is a unique, collectable, and tradable digital asset, like digital art or a photo. NFTs are purchased through a bidding process in this universe and in the metaverse, an online world where people are buying homes, real estate and more in the shape of NFTs. Sales of NFTs are estimated to have reached more than $17 billion in 2021. For better or worse, the future is here.

Cryptocurrency is accessed through a private key. This is a series of alphanumeric characters known only to the owner and stored in cold storage or a digital wallet. Whoever has possession of the key can buy, sell and spend the digital currency. If you have crypto, your family or fiduciary needs to know what you have, where to find the assets and what to do with them.

One option is to share the private key or place crypto assets and NFTs in custody, using a software application or a hardware wallet. There are a number of companies now offering these services. An old-school option for this new world asset is to create a secure spreadsheet of your digital assets and list the login protocols for each account.

For now, it is difficult to open crypto accounts and NFTs in the name of a revocable or irrevocable trust. However, digital wallets allowing you to open an account in the name of a trust do exist, if the company handling the digital asset permits. This is a very new, rapidly evolving asset class. Beneficiaries may not yet be named for crypto accounts. However, this may change in the future.

With no trust account and no named beneficiary, what happens to your crypto and NFTs when you die? For now, they must pass through your probate estate under the will. Your estate planning attorney will make sure your estate plan includes the correct way to give digital asset powers for the fiduciary handling your estate and include digital asset powers in your will, trust, and durable power of attorney.

If your state has adopted the Uniform Fiduciary Access to Digital Assets Act (UFADAA) or the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA)—46 states have—then it will be easier for loved ones to manage digital assets in case of incapacity or when you pass, as long as your estate plan addresses them.

Reference: Kiplinger (May 23, 2022) “Got Cryptocurrency or NFTs? They Need to Be in Your Estate Plan”

What If You Don’t have a Will?

“A recent survey estimated that 68% of people die without a will. The consequences of dying without a will (‘intestate’) can be disastrous.”

A will is a written document stating wishes and directions for dealing with the property you own after your death, also known as your “estate,” explains a recent article “Placing the puzzle pieces of long-term care and planning a will” from Pittsburgh Post-Gazette. The COVID pandemic has reinforced the importance of having an estate plan in place. With almost one million deaths attributed to COVID to date, many families have learned this lesson in the hardest possible way.

When someone dies without a will, property is distributed according to their state’s intestacy laws. If your next of kin is someone you loathe, or even just dislike, they may become an heir, whether you or the rest of your family likes it or not. If you are part of an unmarried couple, your partner has no legal rights, unless you’ve created a will and an estate plan to provide for them.

In general, intestacy laws distribute property to a surviving spouse or certain descendants. A much better solution: speak with an experienced estate planning attorney to have a will and other estate planning documents prepared to protect yourself and those you love.

Start by determining your goals and speaking with family members. You may be surprised to learn an adult child doesn’t need or want what you want to leave them. If you have a vacation home you want to leave to the next generation, ask to see if they want it.

A family meeting, attended by an objective person, like an estate planning attorney, may be helpful in clarifying your intentions and setting expectations for heirs. It may reveal new information about your family and change how you distribute your estate. A grandchild who has already picked out a Ferrari, for instance, might make you consider setting up a trust with distributions over time, so they can’t blow their inheritance in one purchase.

Determining who will be your executor is another important decision for your will. The executor is like the business manager of your estate after you have passed. They are a fiduciary, with a legal obligation to put the estate’s interest above their own. They need to be able to manage money, make sound decisions and equally important, stick to your wishes, even when your surviving loved ones have other opinions about “what you would have wanted.”

You’ll need to speak with this person to make sure they are willing to take on the task. If there is no one suitable or willing, your estate planning attorney will have some suggestions. Depending on the size of the estate, a bank or trust company may be able to serve as executor.

The will is just the first step. An estate plan includes planning for incapacity. With a Will, a Power of Attorney, Health Care Proxy, and Living Will (also known as an Advance Directive), you and your loved ones will be better positioned to address the inevitable events of life.

Reference: Pittsburgh Post-Gazette (April 24, 2022) “Placing the puzzle pieces of long-term care and planning a will”

Should You Update Your Estate Plan?

“Frequent triggers also include changes in the health of executors and guardians; changes in laws, which may impact tax and legal strategies; and changes in state residence, which can also impact planning.”

Some reasons to update your will are more obvious than others, like marriage, divorce, remarriage, births and deaths. However, those aren’t the only reasons your estate plan needs to be reviewed, explains a recent article appropriately titled “When it comes to a will or estate plan, don’t just set it and forget it” from CNBC.

Think of your estate plan like your home. They both need regular updates and maintenance. If your house starts to get rundown or the roof springs a leak, you know you need to get it fixed. Your estate plan is not as visible. However, it is still in need of ongoing maintenance.

Health events should be a trigger, yours or people named in your will. If the person you named as your executor becomes ill or dies, you’ll need to name a new person to replace them. The same goes for a guardian named to care for any minor children, especially if you named a grandparent for this role.

If you move, your estate plan must ‘move’ with you. Each state has different laws regarding how estates are administered. In one state, an executor living out of state may be okay. However, in another, it may make the executor ineligible to serve. Inheritance tax laws also vary.

Any time there is a large change to your personal wealth, whether it’s good or bad, your estate planning attorney should review your will.

The same goes for a change in parental status. The birth of additional children seems like it might not require a review. However, it does. More than a few celebrities failed to update their estate plans and accidentally disinherited children. The same person who may be willing to be a guardian for one child, may find taking on two or three children to be too much of a challenge. If you want to change the guardianship, your estate plan needs to be updated.

A change in your relationship with fiduciaries also merits an update. Someone you named ten years ago to be your executor may no longer be a part of your life, or they may have died. Family members age, retire and move and siblings have changes in their own lives. Reviewing the executor regularly is important.

If a family member becomes disabled, you may need special needs planning.

A commonly overlooked trigger concerns mergers and acquisitions of financial institutions. If your bank is the executor of your estate and the bank is bought or sold, you likely have a new executor. Do you know who the person is, and do you trust their judgment?

Beneficiaries need to be checked every few years to be sure they are still correct. If your life includes a divorce and remarriage, you could be like one man whose life insurance proceeds and property went to his new spouse. His daughter was disinherited because he failed to update his will.

It doesn’t take long to review an estate plan or beneficiaries. However, the impact of not doing so could be long-lasting and cast a negative light on your legacy.

Reference: CNBC (March 1, 2022) “When it comes to a will or estate plan, don’t just set it and forget it”

How to Handle Digital Assets in a Will

“The rapid rise in circulation and growing popularity of cryptocurrencies is prompting attorneys and estate planners to adjust, as digital assets are inherited through wills, trusts and estates, according to experts who warn of the danger of lost or misappropriated assets.”

Now that cryptocurrency has become almost commonplace, it is necessary to incorporate it into estate plans and their administration, according to the article “Estate planners want to keep the crypt out of cryptocurrency” from Roll Call.

One advantage of using cryptocurrencies in estate planning is the ease of transference—if all parties know how crypto works. Unlike a traditional bank, which typically requires executors to produce an original death certificate and other documents to take control of accounts in the estate, cryptocurrency only requires the fiduciary to have passcodes to gain access to accounts.

The passcode is a complex, multicharacter code appearing to be a long string of unrelated numbers and letters. It is stored in a digital wallet, which can only be accessed through the use of the 64-digit passcode, also known as a key.

While the passcode is simple, it is also very vulnerable. If the key is lost, there is no way to retrieve it. The executor must know not just where the key is physically located if it has been written down on paper, or if it is kept in a digital wallet, but how to access the digital wallet. There are also different kinds of digital wallets.

People do not usually share their passwords with others. However, in the case of crypto, consider storing it in a safe but accessible location and telling a trusted person where it may be found.

People who own cryptocurrency need to give someone access info. If someone is named an executor at one point in your life and they have the information about digital assets, then at some point you change the executor, there is no way to guarantee the former executor might not access the account.

How do you protect digital assets? Using “cold storage,” an account passcode is stored and concealed on a USB drive or similar device, allowing the information to be shared without the user needing to learn the passcode to access the account. The cold storage USB drive can be given from one fiduciary to the successor fiduciary without either knowing the passcode.

Many bills have been introduced in Congress addressing cryptocurrency and blockchain policies. The IRS has issued a number of notices and publications regarding taxes on digital currency transactions. Crypto is no longer an “invisible” asset.

In addition to policies and regulations, litigation concerning estates and cryptocurrency is still relatively new to the judiciary. Planning for these assets to ensure they are passed to the next generation securely is very important as their use and value continues to grow.

Reference: Roll Call (Feb. 22, 2022) “Estate planners want to keep the crypt out of cryptocurrency”

Who Is the Best Choice for Power of Attorney?

“These agents take over your affairs in specific areas, if you become physically or mentally incapacitated.”

Picking a person to serve as your Power of Attorney is an extremely important part of your estate plan, although it is often treated like an afterthought once the will and trust documents are completed. Naming a POA needs to be given the same serious consideration as creating a will, as discussed in this recent article “Avoid powers of attorney mistakes” from Medical Economics.

Choosing the wrong person to act on your behalf as your Power of Attorney (POA) could lead to a host of unintended consequences, leading to financial disaster. If the same person has been named your POA for healthcare, you and your family could be looking at a double-disaster. What’s more, if the same person is also a beneficiary, the potential for conflict and self-dealing gets even worse.

The Power of Attorney is a fiduciary, meaning they are required to put your interests and the interest of the estate ahead of their own. To select a POA to manage your financial life, it should be someone who you trust will always put your interests first, is good at managing money and has a track record of being responsible. Spouses are typically chosen for POAs, but if your spouse is poor at money management, or if your marriage is new or on shaky ground, it may be better to consider an alternate person.

If the wrong person is named a POA, a self-dealing agent could change beneficiaries, redirect portfolio income to themselves, or completely undo your investment portfolio.

The person you name as a healthcare POA could protect the quality of your life and ensure that your remaining years are spent with good care and in comfort. However, the opposite could also occur. Your healthcare POA is responsible for arranging for your healthcare. If the healthcare POA is a beneficiary, could they hasten your demise by choosing a substandard nursing facility or failing to take you to medical appointments to get their inheritance? It has happened.

Most POAs, both healthcare and financial, are not evil characters like we see in the movies, but often incompetence alone can lead to a negative outcome.

How can you protect yourself? First, know what you are empowering your POAs to do. A boilerplate POA limits your ability to make decisions about who may do what tasks on your behalf. Work with your estate planning attorney to create a POA for your needs. Do you want one person to manage your day-to-day personal finances, while another is in charge of your investment portfolio? Perhaps you want a third person to be in charge of selling your home and distributing your personal possessions, if you have to move into a nursing home.

If someone, a family member, or a spouse, simply presents you with POA documents and demands you sign them, be suspicious. Your POA should be created by you and your estate planning attorney to achieve your wishes for care in case of incapacity.

Different grown children might do better with different tasks. If your trusted, beloved daughter is a nurse, she may be in a better position to manage your healthcare than another sibling. If you have two adult children who work together well and are respected and trusted, you might want to make them co-agents to take care of you.

Your estate planning attorney has seen all kinds of family situations concerning POAs for finances and healthcare. Ask their advice and don’t hesitate to share your concerns. They will be able to help you come up with a solution to protect you, your estate and your family.

Reference: Medical Economics (Feb. 3, 2022) “Avoid powers of attorney mistakes”