The Importance of Power of Attorney During Estate Planning

The Importance of Power of Attorney During Estate Planning

Your estate planning has many different parts that all need to move in the same direction in order to be successful. A vital part of this process is how to disseminate the various powers of attorney (POA). The POA will be one of the most important estate documents that you create, so you owe it to yourself to know as much as you can about it. Let’s take a look at just how important the POA is and how it will be used during the estate planning process.

What Is the Power of Attorney?

The power of attorney is the power to organize affairs on your behalf. There are different powers of attorney for different aspects of your life. For the purposes of this text, we will focus most on the financial POA, but there are also medical POAs and others that may apply during the estate process depending on circumstances.

In most cases, a power of attorney becomes effective immediately upon document execution. Contrary to popular belief, powers of attorney are not only for when a person becomes mentally incapable. In many cases, the POA document does not completely remove the power of the principal to manage their or her own affairs. The document simply grants the agent the power to act in place of the principal if needed. If the principal remains mentally competent, he can change the POA by replacing the agent or revoking the power totally.

However, the POA document truly becomes the most important document in the estate planning portfolio if a principal becomes somehow incapacitated or otherwise unable to handle their own affairs.

What Happens Without a Power of Attorney in Place

If a principal becomes incapable of handling their own affairs and has no power of attorney document in place, the family of the principal faces a potentially contentious situation. The POA document is the document on record of the wishes of the principal. Without it, there is no direct claim to the finances that the principal was in control of. Family members may begin to fight over the right to control things, especially if the estate is especially large or there are many valuable assets to consider.

In place of a designated person with the powers of attorney, the affected parties may agree to file for guardianship of the assets and property of the principal that has been disabled. Instead of simply following the wishes of the principal as mapped out in the POA, the family must now go through an often long and drawn-out court procedure.

The Process of Guardianship

During the court process of selecting a guardian, there will usually be a lawyer who is representing the Petitioner. The Petitioner is the individual who is looking to be named as the guardian. The Petitioner and their attorney will need to face, at the very least, an attorney who is in court to represent the rights of the person who has been disabled. No matter how close the family is, this process will likely generate thousands of dollars in legal fees in order to legally appoint the guardian.

Keep in mind also that a power of attorney document that is not clear may trigger this contentious process as well. You need to have the right attorney with the right experience in order to avoid these problems — just having a POA document that is not appropriate for your situation is not enough. A properly drafted power of attorney directly from the principal, while he is competent, is always preferable to a guardianship court proceeding.

Even when a legal guardianship is in place, the court maintains a Big Brother stance over the guardian to supervise the administration of the estate. Guardians are much less free to manage an estate than someone who is appointed through a power of attorney document. Guardians must always get the permission of the court to legally undertake many important assets that involve the estate, including paying the attorney’s fees for the procedure itself.

The court will also require that a guardian file an accounting of the estate on an annual basis. On top of this, a guardian must also file an inventory of the estate so that the court knows every activity that is taking place within the family estate. Having to report everything to the court undermines the very nature of a private estate, and it is much more expensive than a power of attorney transfer of responsibility. In most cases, the oversight of the court means that a family must employ more legal services in order to stay in compliance with regulations.

If you are in this sensitive situation, we can help you through it no matter who you may be up against. Do not hesitate to call us if you believe you have a legal claim to the estate of a family member who has been recently incapacitated.

Having an Effective POA

As mentioned before, the power of attorney that is set up by the principal must be well-drafted and relevant to the current situation. Otherwise, the court may trigger the guardianship process and all of the expenses and legal hassle that comes with it.

What makes a POA document effective during estate planning? Let’s take a look at the characteristics of an effective power of attorney.

  • Listing specific powers and limitations. A good power of attorney will list out the specific actions that an agent can take on behalf of a principal. Among these actions may be paying bills from the principal’s assets; managing those assets; selling all or part of the estate; and setting up various structures to avoid estate taxes. A principal may wish their estate to be used in a very specific way, and this is what the power of attorney should spell out in clear terms.
  • Language in the POA to persuade financial institutions to accept an agent. The financial institutions that did business with a principal are under no requirement to accept an agent, even from a properly worded POA. Many of these institutions now require language that is very specific in the POA to reaffirm that there is no funny business going on. Agents should also be prepared to reaffirm their responsibility, possibly on the financial institution’s proprietary forms.
  • Listing consolidated accounts. As a principal, if all of your accounts are kept spread out, your agent will have a tough time jumping through all of the hoops of the financial institutions want. Every bank is different. Consolidating accounts as you age not only helps to organize your family finances in the estate, but it also makes it easier to manage while you maintain control over them. You may want to list all of these accounts by name in the POA so that each financial institution can be more assured of your agent’s viability.
  • Decide on the type of POA. There are two major types of POAs that you can consider: the springing POA or the durable POA. The durable POA gives the power of attorney as soon as the principal signs it. The springing POA only takes effect in the event of a certain condition, such as the death, disability or incapacity of the principal. The timing of agent powers is a vital part of a POA. Without it, an agent may try to take over a principal’s estate too early and cause contention. Keep in mind that not all states allow springing POAs.
  • Define the conditions of incapacity. The last thing that you want is for someone else to determine when you are incapable of managing your own affairs. In your POA, you can name a medical professional to certify that you are incapacitated before your agent can take any action on your estate. This puts an added layer of protection in your POA, and it also gives your agent a good check against absolute power while you are still capable.
  • Establish oversight. Although your agent may have power of attorney, you can limit this right with certain oversights. The key is to make sure these oversights are written down specifically and fully clear to your attorney, to your agent, to the overseer and to anyone else who is involved in your estate.

Get Help with Powers of Attorney Today

The points above are just a few of the important aspects of the power of attorney document during estate planning. Every plan is different based on the individual needs of the estate. Make sure that you have the right attorney by your side when it is time to draft this essential document. Give us a call or an email with any questions that you may have about the process, or to get things started with your own POA. Time is of the essence, and there is no better time than now to get your affairs in order.

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What to Look for in a Great Disability Lawyer

Have you submitted a disability benefits claim and are waiting to hear whether or not it’s been approved? Unfortunately, the odds are stacked against you. Only 23% of Social Security Disability Insurance (SSDI) claims are approved at the initial application stage. Sometimes, even less if you did not use a disability lawyer.

Of course, you can always appeal a denial of disability, but even then, you’re facing an uphill battle. The total number of approvals, whether initially or upon appeal, is only about 34% of all claims filed.

Is there a way to improve your chances of receiving disability benefits? Luckily, the answer is yes. You can hire a disability lawyer to help you navigate this complex process.

A Successful Disability Lawyer Has Medical Knowledge

Social Security Disability Insurance (SSDI) cases are particularly tricky because they require an in-depth understanding of medical conditions that can interfere with a person’s ability to perform their job duties. Therefore, the lawyer that you choose must be experienced in the specialty of disability law.

You are most likely not going to get the results you are looking for if you hire your tax lawyer to tackle your disability case. Look for a law firm whose lawyers have experience litigating medical-related cases. Ask them how many disability cases they have handled and if they have dealt with your particular disability before. 

A Successful Disability Lawyer Understands the Law

This statement should go without saying, but the complexity of disability cases means that a lawyer must know the Social Security system’s requirements inside and out.

In all disability situations, your lawyer will be seeking to demonstrate one, or all, of the following:

  • your medical condition meets the criteria of a condition that is among those described by the Social Security Administration (aka a “disability listing“)
  • you cannot perform your previous work in accordance with Social Security’s “grid” system, which classifies exertion associated with job duties
  • you cannot work even a sedentary position
  • you have limitations that aren’t covered by the grid but impact your ability to perform a job

An Experienced Disability Lawyer Will Be Choosy About Cases

Lawyers who specialize in disability claim appeals cannot charge clients an upfront fee or retainer.

Instead, they receive compensation on contingency. Once your appeal has been approved, and you have been awarded a sum of back pay from the Social Security Administration, your lawyer’s fees will be deducted.

Not having to pay any amount upfront is a massive bonus for clients who may already be struggling financially due to their disability. It means you can afford excellent representation – and you can be awarded your disability benefits even within our challenging disability system!

It also means that if a lawyer takes on your case, they are also taking on the risk of not achieving a favorable outcome. It is in everyone’s interest to work hard for you.

A Great Disability Advocate in Lilac City Law

Our disability team has the know-how and expertise to help you fight and win your disability appeal. For a free, no-obligation consultation, contact us today.

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How to Find a Living Trust Attorney Near Me

How to Find a Living Trust Attorney Near Me

You have made the first step and have decided to set up a living trust. 

Now, you need an attorney to help you. 

You may be asking yourself, “where do I find a living trust attorney near me?”

If you are in need of a local living trust attorney near you, here are some suggestions to help…

Simply Search Google for: “Living Trust Attorney Near Me”

If you like to use search engines and find info on the internet, then you will already be ahead of the game on this.  Simply type in, “living trust attorney near me” or “estate planning attorney near me” and see what appears.  This should bring up lawyers in your area and surrounding areas that can help.

There will be a map that shows up and gives the locations of attorneys as well as a list.   You can click on the list to be taken to their website.  Another benefit of this list is that you can see the general quality of the reviews for several attorneys at once.

Specialty Search Sites

There are a few search websites that allow searching, but only show results specific to the type of law you are looking for.  They are also great places to find information as they tend to maintain blogs of their own as well.   An example is http://estate.findlaw.com/trusts/do-i-need-to-hire-a-living-trust-lawyer.html . Notice that at the bottom of the linked article, there is a link that will redirect you to a page where you can fill in a contact form.  If you fill that out, your contact will be “sold” to an attorney that will contact you.

Another example is www.yelp.com . At the top of the screen, it has a place to find in what you find to find.  Here you will type in living trust attorney.  There is also a place to type in “near” where you will type in your city.  This will give a list of attorneys near the zip code you entered.  It tells you the name, their specialty, gives you reviews, shows their contact information, and allows you to click a link to go their law firm website.

Telephone book

If you are not comfortable using the internet, you can use a telephone book to look up living trust attorneys in your area. Phone books are limited in that they do not provide much more than a short advertisement for different attorneys.  No blogs, about me, or additional information.  However, they can be good places to grab a bunch of phone numbers real quick.

Recommendations

If you know someone who has used a living trust attorney, you can always ask who they used and if they would recommend them.  Getting a personal opinion from someone who has used a living trust attorney will help you know more about the lawyer.

Even when you are considering a recommendation, you should still do a little research on them and set up a consultation.  Many lawyers will offer an initial no-cost consultation.  These are wonderful ways to get a better feel for the law firm and if they are someone you feel comfortable handling your case.

Note: A good living trust attorney will…

  • Have expertise in living trusts and estate planning
  • Be respectful of your time
  • Explain the process, procedures, and what will happen with the living trust
Set Up a Consultation With a Living Trust Attorney Today

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How to Help Your Family Use Your Estate Planning Forms in An Emergency

How to Help Your Family Use Your Estate Planning Forms in An Emergency

In an emergency, everything is chaotic and stressful. Family members are often distraught and unable to clearly (and quickly) think about your wishes.

What will happen to your children if you and your spouse are no longer able to care for them or yourselves? How will your family know your wishes or have access to any legal information?

Using your estate planning forms can help your family and prevent them from having to go to court to receive authority to make decisions if there is an emergency.

Here are six estate planning forms and ideas you can use and how they can help your family in an emergency.

Guardianship Plan

A guardianship plan lays out your wishes for your children if you, or yourself if you become incapacitated. This estate planning form gives medical, financial, and legal decision-making abilities to a trusted person you choose. This person will act on your behalf when making these decisions while ensuring your wishes are considered.

Why is a guardianship plan important to have in an emergency? A guardianship plan can be used to give a trusted person temporary guardianship of you or your family (kids) in case of an emergency. We are talking about if you are unable to care for your children because of a hospitalization or a severe injury.

The person you choose will be able to make educational and medical decisions in your place for the child until you are well enough. If you, unfortunately, die during an emergency, your children will know where they are going and who is going to take care of them; hopefully making the transition a little easier.

If you work with an attorney to set up a guardianship plan, they will have a hard copy available. However, as with all plans, you should go over the details with all those you identify in the plan as potential guardians. Go over who to contact, in what order to contact them, and game plan different scenarios. Your family protection plan attorney will help you figure this all out and ensure you have all necessary guardianship and estate planning forms set up.

Healthcare Power of Attorney / Health Care Directive (Living Will)

A healthcare power of attorney (HPOA) legally allows a person of your choosing to make decisions regarding your healthcare. This HPOA can be as broad as possible, or you can limit to specific types of decisions made for you. Sometimes, healthcare power of attorney will be combined with a health care directive or living will. A healthcare directive specifies what you want if you need life-saving measures. Some of these may include whether you receive artificial hydration (IV) and nutrition (feeding tube), or if you do not wish to be resuscitated in an emergency.

These forms are very beneficial to have in an emergency. If you are admitted to the emergency room, the hospital will do everything in its powers to keep you alive. They will put you on a life support if needed. However, what if that is not you want? Filling out a health care directive will lay out your wishes and enable a person of your choosing to make those wishes happen for you.

If you do not have a health care directive, then having a healthcare power of attorney (POA) gives a trusted friend or loved one the opportunity to make your wishes known. Having these forms (and putting them where a loved one can find them) will allow your wishes to be met in an emergency situation.

To use them in an emergency, make sure these forms are available and accessible to your loved ones. Create a phone call list and instructions for your family, spouse, kids, babysitter, etc. to follow in case they need to contact the person you designated to make these literal life or death decisions for you.

Financial Power of Attorney

A financial power of attorney is very similar to the healthcare power of attorney in that you are choosing a person to make decisions on your behalf. The biggest difference is that in this case, you are allowing a trusted person to make financial decisions or acts such as withdrawing money from your bank account our signing papers for you regarding real estate.

Appointing a financial power of attorney (POA), will allow your finances to be kept in order either after you pass or while you are incapacitated. In an emergency situation, the financial POA can supply the guardian of your children funds to be able to care for the children or even pay your medical bills you are accruing if you are hospitalized.

Ensuring you have your financial POA stored in an accessible location with your other estate planning forms is a necessity for the person that you are designating to start taking steps to handle your finances. Keep your forms somewhere they can be accessed and leave instructions for accessing and using them to your next of kin. Your estate planning attorney will also maintain a copy, so keep us on your contact list as well.

Insurance Policy & Other Important Estate Planning Forms and Documents

Having a life insurance policy in place will greatly help your family financially if something happens to you. Life insurance will help replace lost income, cover burial expenses, pay off any of your debt, and pay any estate taxes.

In addition to life insurance there are many other important documents:

  • Final arrangement plans to let your family know the particulars of your final arrangement. This will ease their need to make decisions.
  • Contact sheets giving your loved one contact information for important people such as babysitters, neighbors, who to contact if you do not come home, etc.
  • Trusts which pass on specific assets to a beneficiary bypassing probate.
  • Tax documents
  • Investments
  • Photographic itemizations of assets

Again, having these forms done and put somewhere easily found, will help put your family at ease. It could be the difference between your children being placed immediately in the custody of a close family member or family friend (by your designation) or them ending up in foster care while a court determines who is the most appropriate caretaker, if any, amongst your family and friends.

If you want to know more about how this could all play out, read: WEAR CLEAN UNDERWEAR. We will even provide you a copy!

Password Lists As An Estate Planning Form?

Having a list of passwords almost seems silly. Why set up a password if you are going to document them? Your family may need to access accounts online and will not be able to without your passwords. In today’s technological age, many different things are done online and with passwords including online banking.

In an emergency, your family may need to access your online banking account, your email, etc. To do this, they will need to know what your passwords are. For example, you end up hospitalized and in a coma. The only way for your neighbor to contact your family is to access your contacts on your phone. How are they supposed to that? Keeping a list of passwords somewhere a trusted person knows about will allow them to access password protected things that may be needed in an emergency.

Account Lists As An Estate Planning Form?

A list of all of your accounts will also help your family know where to look for information such as banking. Listing your email account is important as well so your family can get any important information that may be sent by email. There is an application you can install on your smartphone that will allow you to list your accounts and passwords.

Just like a password list, a list of accounts will be helpful to your family in an emergency. If you pass away, your family will need to know where you bank, who you use for phone service, etc. They need to know so they can cancel accounts if need or change the terms of service.

Account lists are an often overlooked part of estate planning, but are something you should include in your estate planning forms if you have not done so already.


If you found this article helpful, take a look at A Young Family’s Guide to a Rock Solid Estate Plan