Protecting Yourself and Your Loved Ones 101

 What you need today:

  • Power of Attorney so that someone you trust can act on your behalf if you are unable to do so
  • Healthcare Proxy for someone you trust to make your medical decisions if you are unable to do so, someone that will follow your wishes, not their own
  • Living Will so that your wishes are clear as to specified medical issues
  • Instructions for final wishes giving power to someone you trust to fulfill those wishes such as funeral instructions, services, burial and disposal wishes
  • Last Will and Testament making those you trust in charge of making certain those you wish to take your assets actually do (with document in possession of someone you trust for immediate access to it)

Some basics that happen upon your death that require advance planning:

  • All of your bank accounts lock up until Executor or Administrator is appointed (weeks or more later), so no money to pay your mortgages, car payments or other basics
  • Your safe deposit box is locked and cannot be opened without a Court order so putting a Will there may not make sense
  • There are no funds available, because of accounts being locked, for your final wishes/funeral or burial unless a specific account has been set up
  • Your relatives may come in and start taking and doing whatever they want (ransack your home, take valuables they decide they want with no regard for your wishes at all)
  • No one is in charge, unless you have made proper arrangements, from the time of your death until an Estate or Administration is started which could be weeks or months

Wills

Whether you have already drafted a Will and are wondering if you should review or change it, or if you are interested in drafting your first Will, there are several considerations to make certain your goals are met upon your untimely demise.

  • Choosing your Executor/trix. This should be someone that you trust to fulfill your wishes as you want them to be fulfilled, and someone who is capable of handling it all. This is the person that will manage all of your assets and who is to follow the instructions of distribution in your Will.
  • Substitute Executor/trix. This person would serve in the position if your first choice cannot or will not serve, so they must be equally trustworthy.
  • Name substitutes for everything. Always have alternative arrangements for everything position and every bequest, in the event the person you want to serve or want to give certain assets does not survive you.
  • Specific Bequests. These are specific items that you want to go to specific individuals such as your great grandfather=s watch to your eldest son. Again, think in the alternative in the event your first choice is unavailable to accept the bequest.
  • Residual Estate. This is what is left after debts, funeral expenses and specific bequests are paid out and distributed. To whom do you want this to go and, again, think in the alternative if this person or people are not available to take, or choose not to take.
  • Multiple distributees: What percentage of your residual estate do you want going to each person or entity, and in what fashion. For example, you have three children and want your residual estate to go to them in equal shares, but one of your children was with you in the auto accident that killed both of you. Do you want that child=s share to pass on to that child=s children, if any, or do you want it equally divided between your surviving children?
  • Taxes: Do you want anyone taking from the estate to be responsible for payment of taxes on what they have received, or do you want your estate to pay any taxes involved, or do you want some other arrangements made?
  • Trustee and substitute trustee. If there be any minors who may receive under your will for whom you need to set up a trust in your Will, or do you want to set up a trust for other purposes, you must name a trustee. This can be a bank or a person and it is for the property of the minor that has gone into the trust. Again, this must be an extremely trustworthy individual or bank to fulfill your wishes and protect the needs of those benefiting from the trust.
  • Age of distribution of trust, if minors involved. If you set up a trust for, for example, the health, education and welfare of minor children, at what point do you want the trust to pay over to them, if ever. Some people choose 18, some 21, 25 or even 35. This is something that requires serious consideration and should not be a spur of the moment decision in your attorney=s office.

These are simply some of the preliminary considerations for your Will, but the list is not exhaustive. If you would like to discuss drafting or reviewing your Will, please contact us at your convenience.

Power of Attorney

A Power of Attorney is a formal document that gives another person, or people, the authority to act on your behalf. There are various types and levels of power allotted in a POA, so it may be beneficial to discuss those types and levels, but before doing that, decide who you trust the most to have access to your finances that will do what you want, not take advantage of the situation by taking assets themselves if you are not in a position to prevent them from doing so. Your choice of the person to whom you will be giving the power over your finances must be well thought out and not under a sense of any type of obligation to someone. The person granting the POA to someone is called the “Grantor.”  The party receiving the power is called the “Agent.”

General Power of Attorney is most frequently used in Estate Planning, though surely not the only one. These POA’s give any or all of the following rights, depending on which the grantor chooses:

  • Real Estate Transactions
  • Chattel and Goods Transactions
  • Bond, Share and Commodity Transactions
  • Banking Transactions
  • Business Operations Transactions
  • Insurance Transactions
  • Estate Transactions
  • Claims and Litigation
  • Personal and Family Maintenance (this one is tricky)
  • Benefits from Governmental Programs or Civil or Military Service
  • Healthcare Billing and Payment Matters; Records, Reports and Statements
  • Retirement Benefits Transactions
  • Tax Matters
  • All Other Matters
  • The right to delegate any of these powers to someone selected by Agent
  • Optional: grant of right to give statutory gift (limit $500)
  • Optional: grant of right to give gifts in excess of statutory amount
  • Optional: compensation of Agent

New York also gives the right to appoint a Monitor to oversee the Agent. This would give me pause, thinking that if the Agent needs to be monitored, that the person or entity chosen as the Monitor may be a better choice as the Agent. Surely, there could be reasons where monitoring may be appropriate beyond the Agent being a poor choice, though none come immediately to mind.

The General Power of Attorney should be durable, as described below, unless the Grantor does not want the Agent to act if the Grantor becomes disabled or incapacitated. This is one more decision the Grantor must make.

Durable Power of Attorney allows the agent to act even when you are not able to do so. If the POA is not durable, then when the grantor becomes incapacitated, the Agent cannot act on the Grantor’s behalf, which often defeats the entire purpose of having a POA.

Springing Power of Attorney is not without some problems. The Springing POA does not go into effect until a specified date or event. Most often, it is the event of the Grantor of the power being incapacitated, which is both a benefit and a detriment.

The benefit of a springing power is that when the Grantor becomes incapacitated, someone is there to act for them, to step into their shoes. The detriment is that for the power to take effect, there has to be a legal determination of incapacity which can be both costly and time consuming. During the time lag between the incapacity and its formal determination by a court, the Grantor can be well on the way to financial ruin because no one has the power to act on their behalf to protect their assets.

This office does not prepare Springing Powers of Attorney, but the reader should be aware of what they are should it be something they would consider or choose.

Revocation of Power of Attorney carries as much importance as the POA itself. When a situation arises where the Grantor wants to end the POA, tearing it up does not end it. There must be a formal revocation of the POA, on formal notice to the Agent and anyone else that has a copy of the POA.

New York POA’s have a provision indemnifying third parties from liability in their accepting the POA. This is not an optional provision. From a practical standpoint, if you have revoked a Power of Attorney, you must make certain that anyone or any entity that may have a copy of that POA is noticed of the revocation or you will still be liable and held to any action taken by the Agent on the revoked POA. It is the Grantor’s responsibility and obligation to assure the Agent and any third party, has notice of the revocation.

If you would like to discuss having a Power of Attorney to protect your interests and that of your loved ones, contact Diana through our contact page or at dgcesquire@aol.com.

Healthcare Proxy

This is the document by which you give someone else power to make your medical decisions on your behalf if you are not able to do so yourself. Healthcare Proxies are vital parts of an Estate Plan and a vital part for your own piece of mind. Of course, you want to choose a healthcare proxy who has the strength to do what you would want done under the circumstances you are facing. Plus, you need to know this person or people will act solely for your benefit and never for their own.

If you would like to discuss Healthcare Proxies, or changing a proxy, please contact Diana.

Your Final Wishes, Not Theirs

Many are unaware of the fact that they can, and should, act to assure their final wishes are followed. A Power of Attorney ends at death, and an executor/administrator is not appointed for weeks, even months. No one you have chosen has the power to act on your behalf when your final wishes needed to be carried out. A formal Final Wishes affidavit can assure your wishes, not someone else’s, are carried out.

Most all wills contain a provision for payment of “just debts and funeral expenses,” so whatever someone else decides they want is what you will be paying for, often preventing the party you want to be receiving your estate from receiving all that they should. The opposite can also be true, that your wishes are very specific as to any funeral and graveside service, but the person with the temporary power, most often next of kin, chooses not to follow your wishes, but their own.

There is a lag time between someone’s death and when the party chosen as executor receives the power from the court to act on your behalf. Until then, your next of kin makes the call on what happens upon your demise, unless you act to assure someone you trust to follow your final wishes.

An example may help. Consider someone wants cremation, ashes spread in specific places and a party upon their death, no calling hours or church services. Next of kin completely disregards the wishes of the decedent, having calling hours and a funeral mass at a church hated by the decedent. The decedent’s estate will pay the multiple thousand dollar bill for something they not only did not want, but adamantly opposed. A Final Wishes document could and would have prevented this.

Surely the story can go in the other direction as well, when the next of kin refuses the church service which was so vital to the decedent and others cared for by the decedent, but is abandoned to the wishes of another.

You have the power to give the right and ability to someone you trust to follow your final wishes, and not impose their own. You may say that it does not matter, you will be gone, but those you loved and left behind need to have your wishes followed because it is the last thing in which they can support you, and the last gift they can give you and that you can give them.

If you would like to discuss your final wishes as part of your estate plan, please Contact  Diana.