Estate Planning

As a former hospital nurse, I can tell you that no one was ever expecting the emergency situations that occurred.
 
The truth is that none of us knows what the future holds. The best strategy is to be prepared.
 
One way to be prepared is to have a financial power of attorney. A financial power of attorney allows you (the “principal”) to give another person (your “agent”) the authority to act for you, and to make financial decisions for you if you are ever incapacitated.
 
If you do become incapacitated, your power of attorney could become the most important legal document you ever signed. A financial power of attorney can ensure that the right decisions will be made for you by the right person at the right time.
 
However, you should be aware that a power of attorney can be used as a tool to take advantage of you financially, or to interfere with your estate plan. For this reason, you should choose the agent for your financial power of attorney very carefully. You may also want to consider options to discourage potential financial exploitation, such as limiting your agent’s power to make gifts, naming a co-agent, or requiring that your agent report transactions to a third party.
 
Your power of attorney document should be specifically tailored to meet your needs and goals. It is best to avoid “one-size-fits-all documents” that you print from the internet. Your document should be prepared by a skilled estate planning attorney with your individual situation in mind.
 
It is a good idea to discuss your power of attorney with the family members who could be involved in your care some day. You can discuss the preparations you have made and answer any questions.
 
Taking the time to address these difficult issues in advance can ease the burden on your family members and promote family harmony if you ever do become incapacitated.
 

Do you have a Facebook, LinkedIn, or other social media account? Are you in the process of eliminating paper and storing account information digitally?
 
Your estate consists of much more than your money, real estate, and personal property. Digital assets are becoming increasingly important. Digital assets are files and data stored in an electronic format. Some digital assets have economic value, such as monetized blogs and ITunes accounts. Other assets have a great deal of sentimental value, such as family photos.
 
Digital assets often become inaccessible after a person dies. Accounts that require a password to log in can become impossible to access. In addition, some sites delete accounts that have been idle for a certain period of time, which can result in the loss of digital assets forever.
 
Estate planning documents should include instructions to let trustees and agents know how to manage your digital assets. This may include deleting private emails, shutting down certain social media accounts, or posting a goodbye post on your blog.
 
Review your estate plan to ensure that your digital assets will be managed according to your wishes.
 
Reference: Dealing With Digital Assets And Social Media Accounts In Estate Planning

A recent article in the New York Times entitled Finding Out Your Power of Attorney is Powerless describes a common scenario: Your parents have signed a durable power of attorney that allows you to handle their finances – taxes, bills, bank accounts, real estate sales – if they become incapacitated. Then the time comes when your parents can no longer manage on their own.
 
You take the witnessed and notarized document to a financial institution, and they refuse to honor it. They insist that your parents sign the institution’s own power of attorney form. Unfortunately, your parent may no longer be competent to sign the form, leaving you powerless to manage your parent’s financial matters.
 
Financial institutions defend this practice. They are aware of the financial exploitation of older adults, especially those with cognitive impairment, and that the perpetrators are often family members. They are also concerned about their own liability.
 
The article suggests proactively asking the bank if it requires its own durable power of attorney document while your parents are still able to manage their own finances. If it does, have your parents sign it when they are still capable of doing so. Of course, you will have to do this for every institution where they have an account.
 
This is one good reason to have a living trust. Living trusts are more widely accepted by financial institutions than powers of attorney. Contact your estate planning attorney to find out if a living trust is right for you or your parents.
 

Do you have a pet that you love?
 
Many pet owners think of their pets as family members and want to make sure that their pets are well cared for if they are unable to care for their pets themselves. One way to provide for your pet’s well-being is to set up a pet trust. 
 
One of the most famous pet trusts in history was Leona Helmsley’s trust for her dog named Trouble. Her will contained instructions to establish a $12 million dollar testamentary trust to benefit Trouble after her death. Although a judge later reduced Trouble’s inheritance to $2 million dollars, she lived a life of luxury until her death at the age of 12.
 
A pet trust can be established in either a will or a trust, and can benefit one pet or many pets.  A pet trust will appoint a person or organization to care for your pet, and will establish a trust fund to finance the care of your pet. The trust will continue after your death until your pets pass away, and then any remaining funds are distributed to a contingent beneficiary named in the trust.
 
Contact your estate planning attorney if you would like to establish a trust for a pet, and coordinate the pet trust with your estate plan.
 

A common misconception about estate planning is that it is “death planning.” Nothing could be further from the truth.
 
A large part of estate planning is planning for life circumstances during which you may need help from the people you trust the most.
 
Having a trusted person named in legal documents to handle financial matters is the best way to ensure that life runs as smoothly as possible during crisis situations, such as an illness or injury.
 
You may also need help with financial matters if you develop a debilitating condition that makes it difficult for you to manage routine financial tasks, such as writing checks or going to the bank. The time to make sure that your estate planning documents will protect you if an accident or illness does occur is when you are still operating at your best.
 
Review your estate planning documents regularly to make sure that you are protected, and that your preferences are clear.