Many people are under the incorrect impression that estate planning is only helpful when they die. They fail to recognize the ways estate planning can protect them and their family while they are alive, but incapacitated by an accident, illness, or age. A Durable Power of Attorney is a document that allows our clients to specify who will manage their finances and assets in the case of incapacitation. With advances in medicine and science, people are living longer today than ever before. Conditions such as Alzheimer’s and Dementia are very common in our aging population. We hear frequently of adventurous young people, exploring everything the world has to offer, when they are involved in a tragic accident and wind up in a coma or disabled, either temporarily or permanently. In all of these cases, a Durable Power of Attorney could be helpful to our client and their family.
The trick to an effective Durable Power of Attorney is timing; it must be completed before you need it. This means your Durable Power of Attorney must be in place before you have a debilitating accident, an unforeseen illness, Alzheimer’s, or Dementia. Unless you’re really good with your crystal ball, this means that now is the best time to implement a Durable Power of Attorney. We all know that tragedy can strike at any minute, and doesn’t discriminate based on age.
Often, we hear from people who are making the difficult decision to put a loved one in an elder/memory care facility. After deciding on the perfect facility, the family is told they need a Durable Power of Attorney authorizing them to make financial decisions for their loved one. To their dismay, this document was never created. Without a Durable Power of Attorney in place, their only option is conservatorship, the process by which a court decides who should handle their finances. Unfortunately, conservatorships cost thousands of dollars and impose stringent requirements. Imagine the financial strain, delays, and stress this process could bring.
A common misconception is that spouses can just sign for each other on important documents in these situations. This is false. Picture someone caring for their spouse, who is temporarily disabled from a car accident. Finances are tight, and they need to sell their home to cover medical costs. After contacting a realtor, this person discovers that they do not have authority to sell the house without their spouse’s signature. This person would also not have access to their incapacitated spouse’s IRA, 401k, or separate bank accounts, which would severely limit their ability to appropriately handle the financial demands of the situation. When they call our office, they find out that without a Durable Power of Attorney in place, their only option is conservatorship. Again, this costly process will create financial strain, delays, and stress that could have been completely avoided with a Durable Power of Attorney.
As you can see, it is absolutely critical for everyone, no matter their age or the size of their estate, to have a Durable Power of Attorney in place to protect their financial, email, social media, and electronic account assets. When you work with our firm, you will be confident that if you become incapacitated for any reason, your loved ones will be able to appropriately care for your finances.
