Start Early, Avoid Crisis
Growing too old to care for your own affairs is difficult to think about. It would seem that our culture today revolves around being able to independently handle ourselves throughout our lives, but the reality of the situation is that there will come a time when we are unable to do so.
Knowing this, it is important to take care of these important legal documents as early on as possible. So, what sort of legal documents do you need to worry about?
Last Wills and Living Trusts
To put it simply, a last will is a document that allocates a person’s assets and provides direction for them when the person has passed away. The document will usually always have named an executor, who will be in charge of overseeing the details and issues surround the named assets. This person is often a family member or direct descendant. For a last will to be validated, it must undergo a court process to be probated.
This process can be a long and costly one, and, because of this, many people tend to opt for the simpler, easier to execute living trust instead. A living trust typically does not have to be validated in court, allowing the owner (often called the trustor) to name others who can assume ownership of the trust after the original trustor has died, or become unable to manage it. This trust can be passed down from person to person and remain intact.
Living Wills (Healthcare Directives)
A living will is a document that describes and dictates health related wishes and instructions in the case that someone becomes too ill, or otherwise unable to communicate their wishes themselves. This form usually goes hand-in-hand with a DPOA, or Durable Power of Attorney, which we will cover in depth below. In most states, this process is a simple one, and the forms and proceedings required to achieve them are free.
Durable Power of Attorney (DPOA)
This is a legal document that gives authority over someone’s health to another party in a time of need. It has, in recent years, replaced the POA, or Power of Attorney, due to the POA’s weaknesses and shortcomings. For instance, while the POA did grant an individual the power to make medical decisions for another individual while they were in relative health, as soon as they became incapacitated or otherwise unable to speak for themselves, this document was rendered null and void.
To overcome this oversight, state legislatures began creating Durable Power of Attorneys, or DPOAs. In effect, once the person who will be in charge of the individual’s health (often called an agent) assumes the power, they become the defacto guardian for the issuer. (More on this in a moment.) Because this legal document can cover such a wide swath of legal terrain, two separate individuals can be named. One of these persons will be issued a Durable Power of Attorney for Finances (a DPOAF), and the other a Durable Power of Attorney for Healthcare (a DPOAHC) Specific restrictions can often be set for these documents, providing limitations for each individual. For instance, a DPOAF may state that the executor has rights to pay a person’s housing tax, but not sell the house outright.
Do Not Resuscitate (DNR)
This is a physician’s order that can be requested in advance to prevent a medical practice from issuing lifesaving procedures like CPR in the event of a heart attack, cardiac arrest, or respiratory arrest. This form can be filled out upon admittance to any major medical facility, or it can be verbally requested directly from your physician, who will then make a note for you.
Guardianships
If you have a loved one who is showing increasing signs of helplessness or mental deterioration, then it may be within your bounds to apply for guardianship over them. A guardian has decisionmaking abilities spanning a wide variety of categories over the individual in question, whether they are incapacitated or not. In order to obtain a guardianship, a person will need to request a court hearing over the matter.
It’s up to the court to decide whether or not the individual in question needs a guardian, and whether that guardian should have full, limited, complete, or partial say over their affairs. Typically, guardianships last for the rest of the individual’s life.
Also, nearly two thirds of all guardianships are family members to the guarded. In cases where distance is an issue, the state has the power to issue this privilege to a professional guardian, who can work with the family to meet an individual’s health and financial needs.
The National Guardianship Association declares that guardianship gives an individual the authority to:
Determine and monitor residence
● Consent to and monitor medical treatment
● Consent to and monitor non-medical services such as education and counseling
● Consent to release of confidential information
● Make end-of-life decisions
● Act as representative payee
● Maximize independence in the least restrictive manner possible
● Report to the court about the guardianship status at least annually
● Marshall and protect assets
● Obtain appraisals of property
● Protect property and assets from loss
● Receive income for the estate
● Make appropriate disbursements
● Obtain court approval prior to selling any asset
● Report to the court on estate status
A guardianship is often a more expensive and time consuming route to take for legal precedence over someone, because of the need for court hearings and other legal processes.
As our loved ones grow older, it is increasingly important to have a plan in place that not only accounts for any potential health and financial complications that may arise, but also secures a certain peace of mind for the family, knowing that said assets will be handled in a manner that is in the best interests of the family itself. An estate planning lawyer will help you with all the legal paperwork necessary, helping you and your family prepare and plan for the future.