“I JUST WANT A SIMPLE WILL.”
I hear that often from people when discussing their estate plan. While a Will is important, it does not take effect until death. There are other estate plan documents that you and your loved ones may need immediately in the event you become incapacitated, even for a short period of time. This post will discuss the two most important documents needed if this happens. Having them in place can avoid the extraordinary time expense and hassle of going to court for you or your loved ones.
Every adult should have a Durable General Power of Attorney for Financial Matters and a Medical Advance Directive For Health Care. In my estate planning seminar, COMMON MYTHS OF ESTATE PLANNING, I refer to these two instruments as, “Documents for the living”.
A DURABLE GENERAL POWER OF ATTORNEY grants authority to a person you have chosen as your attorney-in-fact. Once you execute the document and your attorney-in-fact accepts his or her appointment in writing, this person can conduct all of your business and personal affairs, except for medical treatment and medical decision-making. For example, the person you designate as your attorney-in-fact can sign checks for you, make withdrawals of cash and securities, sign tax documents and sell your property. As you can imagine, that’s why it’s critical to name someone whom you trust implicitly with your assets and property. Most often this would be your spouse. For unmarried persons, a sibling or financially responsible adult child might be your best options. The alternative to the immediate power of attorney document is the so-called “springing power” of attorney. It “springs” into effect on your disability. This type of document can cause serious problems and delays for families facing a crisis with an incapacitated loved one. In my opinion, the springing power is cumbersome and inefficient because it requires 1 or 2 physicians to certify a person’s incapacity in order to take effect. Some financial vendors may also refuse to honor a springing power unless it is satisfied that a physician’s certification has occurred. Most times when a power of attorney document is needed, it’s an emergency situation that can’t wait for a medical evaluation. These documents are designed to be immediate and efficient if needed. They should not be an obstacle to helping loved ones.
A MEDICAL ADVANCE DIRECTIVE FOR HEALTH CARE is a legal document where you get to appoint a health care agent who can make health care decisions for you when you are unable or unwilling to make decisions for yourself. You should pick someone who you trust, who understands your wishes and agrees to act as your agent. Your agent may NOT be the owner, operator, employee or contractor of a residential care facility or health care facility where you reside at the time your advance directive is completed. In your Advance Directive, you can specify certain medical decisions ahead of time and even end of life choices such as whether you would want extraordinary measures to keep you alive or some other variation along that continuum. If you are not ready to have that kind of discussion with yourself and your loved ones, you can simply appoint a health care agent and an alternate agent and leave the other details for later in life. I recommend that clients allow me to send their completed Advance Directives to their physician’s office and local hospital’s medical records department. Vermont residents also enjoy a free and confidential national electronic registry. Once your Advance Directive has been properly registered, you will receive a wallet card in the mail with a password so your Advance Directive for Health Care documents can be accessed anywhere in the world.
An important note here is that an Advance Directive For Health Care has nothing to do with either Vermont’s patient assisted suicide law or physician generated do not resuscitate (“DNR”) orders. Neither of those plays a role in the advance directive for health care/appointment of a health care agent.
ELIMINATE THE NEED TO OBTAIN A COURT-ORDERED GUARDIANSHIP. One of the critical advantages of these two documents is that they can eliminate the need for a court-ordered guardianship over your family member or loved one. Suppose a family member has dementia or other debilitating disease that renders him or her mentally incapable of taking care of themselves. If that person has a valid Durable General Power of Attorney and Advance Directive for Health Care in place, there is generally no need to obtain court ordered guardianship.
KIDS IN COLLEGE? Having my own kids attend college has shown me that these documents are not just helpful to people later in life. I recommend that young adults going off to college execute a Power of Attorney, Medical Advance Directive To Appoint Health Care Agent, and FERPA Waiver* in favor of one or both of their parents, before they leave home. Why? If your child is age 18 or over, the college where your son or daughter attends is not going to give you any information about them. It doesn’t matter that you are paying the bills or that your child wants you to have access to their information. The college kids in my household have executed these documents, and it has allowed my spouse and I to speak openly with the colleges about important medical and financial matters.
These two documents are only part of an estate plan where the documents work in tandem to make things efficient and less burdensome for loved ones and family members. Executing a Will is critically important, because it gives your loved ones a set of clear directions for the disposition of your property and assets. In fact, sometimes a statement of intent found in a Will can be helpful before death (This will be the subject of an upcoming article!) However, the documents discussed here are essential to navigate around the modern legal and medical establishments. Courts are not fun places. It is often a lengthy and expensive process. With proper planning, it can be avoided entirely.
[This is the first of a series of blog posts for 2019. If you have any questions please contact me directly at firstname.lastname@example.org, my business FB page or LinkedIn.
*FERPA stands for the Federal Educational Rights and Privacy Act.