Durable Powers of Attorney: Critical Estate Planning Documents You Need to Do NOW to Protect Your Healthcare, Assets and Family
By Gail Abrams
Estate planning is not only about having a will or trust in place to deal with what happens after you or a loved one passes away, it is also about having other supplemental documents in place to deal with what happens if you or your loved one becomes incapacitated. It is not SIMPLE and should not be done without a qualified estate planning attorney. Even a seemingly simple power of attorney, if drafted incorrectly or is not written within 3 years of use, may be deemed a worthless document and may not work when your loved one needs it.
Powers of attorney for assets and healthcare are the most important estate planning documents available while you are still alive, as well as living wills. Powers of attorney are created to appoint someone you trust to manage your finances and your healthcare should you become incapacitated. It is about identifying people you trust—while you are still able—who can make critical and life-changing decisions for you while you are alive and not able to make decisions for yourself. Most people at some point will be incapacitated and need these critical documents.
Financial firms also require a power of attorney for assets to be in place prior to your incapacity. Once you are incapacitated, you can no longer choose who will manage your finances. It can take time and money for your loved ones to have you declared incapacitated and have a guardian appointed by a court. This process can delay transactions, be very expensive and have a serious impact on your financial accounts. It is also stressful for loved ones, especially if it is not clear who should be put in charge of your affairs if there are conflicts among your loved ones on key issues such as what bills should be paid and how your money should be invested. NOTHING will get done. Then your family may have to deal with creditors, health care bills, disputing family members and so forth. It is crucial for you to act in advance of the time you become incapacitated and create a legal document naming a trusted person to act for you-rather than leaving this crucial decision up to the court. A power of attorney for assets SHOULD be reviewed and updated every three years.
Recently, one of our clients has become incapacitated, and he cannot manage his affairs. He has rental and investment properties throughout NJ and Florida. His children have never been responsible with finances. They have gone through much of the money he has already given them. Luckily, his grandson is responsible with finances. Two years ago, while he was competent, we met with him to redraft his documents and to appoint the grandson as his power of attorney for assets, removing his irresponsible children. After his sudden incapacity, a major family dispute regarding one of his real estate assets erupted. We were able to prevent a major costly lawsuit by having this updated power of attorney for assets in place. The grandson makes all decisions regarding all of his assets, including this piece of real estate. Our client spent $250 to update his power of attorney for assets and avoided a costly family lawsuit. This is a simple solution and very inexpensive to keep your estate secure.
Powers of attorney are part of an estate plan that protects you and your family now. After you pass away, the comprehensive estate plan should also include a last will and testament or revocable living trust to ensure your assets are managed and distributed as you dictate after you are gone. Only an experienced estate planning attorney will help you choose a plan and draft the legal documents that are right for you.
At the law firm of Gail L. Abrams in Watchung, NJ we offer solutions in preserving your assets for you and your family including comprehensive estate planning, IRA strategies, Retirement Planning and more. We take the time to ensure you are comfortable and understand your estate planning choices. KISS: Keep it Simple and Secured! Do not wait until something happens in an instant. Make informed decisions regarding your estate and financial affairs. Contact the law firm of Gail L. Abrams for a consultation today at (908) 753-4155 or email us at gabrams@siafinancial.com.