PATTI'S BLOG

Last month, we introduced our year-long project to organize our estates.  How did you do? Did you check all the boxes?  As with most projects, sometimes getting started is the real goal, so give yourself a gold checkmark if you did anything to start getting your estate in order. 

This month, it is time to make sure we have legal documents in place to protect in case we become unable to make or communicate significant decisions about our healthcare or our finances.

Years ago, I had a potential client whose daughter called my office several times to make appointments for him to get his estate planning documents prepared.  As each appointment time approached, he called my office to cancel.  After the third cancellation, I got him on the phone to ask why he kept cancelling.  He said he was just not ready yet. I asked him how old he was and he told me he was 90! He believed, as many people do, that he would magically be able to plan for a disability just before he became disabled.  Thankfully, I convinced him to meet and get his plans in place.  Just six months later, he was diagnosed with a terminal illness. His agents had to step in to make financial and healthcare decisions for him and, after his death, they had to take care of his wife who was suffering from dementia.

Estate planning is really advance planning that will continue for a lifetime. Goals and priorities may change when life changes, so the planning you do today may change if your health, finances, or relationships change.  However, this is planning that must be made before a disabling event occurs, so it is important to get started today, knowing that you can always change the plan later.

The most important legal component of planning is selecting and appointing people that will serve as agents, sometimes called proxies or surrogates, that can make decisions for you if you are not able to make or communicate those decisions.

The two main legal documents you need for advance planning are a durable financial power of attorney (P.O.A.) and an advance directive for healthcare.

The P.O.A. is a document in which you nominate someone to make financial decisions for you. It is called durable because it remains in effect if you should become mentally unable to make financial decisions. If you are over the age of 18, the age of adulthood in Georgia, and you are not able to make decisions for yourself, there is no one with the legal authority to make financial decisions on your behalf unless you have appointed an agent in a legal document.  Unless you have nominated them, even your spouse, parent or adult child has no legal authority to act for you. If no one is appointed and you can no longer make or communicate significant financial decisions for yourself, your family will have to petition the probate court in the county in which you live to be appointed as a guardian or conservator before they can make financial decisions on your behalf. See: "What is a Guardian/What is a Conservator" 

You can limit the transactions you would authorize your agent to do on your behalf, but usually an agent can write checks, open and close bank accounts, buy and sell real estate, enter into contracts, and talk with your financial professionals on your behalf.  The agent acts are for you, and not for themselves, so it is important to talk with the person you have nominated to help them understand your financial goals and the decisions you would make if you were able to make them. Click for more information on Financial Powers of Attorney

Who should be your agent under a P.O.A.? An agent under power of attorney can be a relative, neighbor, friend, or a professional.  A few things to consider when selecting an agent are:

• Is the person trustworthy?
• Will that person understand the duties and make a commitment to take the time required to perform those duties?
• Do they understand your goals and values?
• Will they be loyal to you?

The role of agent is a job, and can be demanding, so you will want the best person for that job.  Now that so much of our business can be done online, it is not quite as important that the agent be local, but make sure to develop a safe and secure way to share user names and passwords with your agent so they can act on your behalf from a distance.

The other important document necessary to protect you in case of incapacity is the Advance Directive for Healthcare.  That is a document where you nominate someone to make healthcare decisions for you if you are not able to make or communicate decisions about your healthcare. Click for more information on Advance Directives for Healthcare

The person you nominate can make any decision for you that you could make for yourself, including end of life decisions.  In addition, the agent under your advance directive for healthcare can make decisions about the disposition of your body after your death.

What should you consider when choosing an agent to make medical decisions for you?

Location: 
Persons with dementia may need someone who can accompany them to the physician or other healthcare provider in order to be able to learn about their condition, and to agree to treatment plans.  However, if the healthcare agent you choose is not local, make sure that the agent is someone who is available and able to communicate by phone, text, e-mail or an online program such as face-time or zoom.

Trustworthiness: 
Can the agent be trusted to carry out your wishes?  Will they advocate for the decisions you would make, regardless of their own wishes?

Physical and mental ability:
The agent should be able to understand and communicate your wishes to the healthcare providers.  In addition, it may be difficult for someone with physical or mental illnesses to advocate for you when they are facing their own healthcare issues.

Tenacity: 
Can the person you select advocate for you, and be persistent in pursuing the type of care you need and would want?

Willingness: 
Is the person you are considering willing to act for you?  Be sure to ask before you nominate someone.

To help you understand what may be required of an agent under your Advance Directive for Healthcare, here is an article about the role of the agent, sometimes called a surrogate, under the Advance Directive, which might help when choosing an agent: What it means to be a healthcare surrogate

Another document that can protect you in case you become unable to make decisions is a trust.  In a trust, you nominate a successor trustee in the event that you are no longer able to make decisions for yourself, or if you no longer want to make those decisions.  The Trustee only controls the assets owned by the trust, though, so you will still need to appoint an agent under a P.O.A.

Here is an article I wrote many years ago describing a revocable living trust: Trust Me, It's Like A Little Red Wagon

And here is your checklist for April (click for printable copy):


Looking ahead to the rest of the year:
May:    
Do you have family members who have disabilities? How about minor children or grandchildren? Learn about how to take care of family members or others who may have special needs or who may need guardians and/or conservators.
June:  
Estate Planning for a business.
July:  
How does getting married or divorced affect your estate plan?  Learn some ideas for planning for “blended” families or families that may not blend so well.
August:  
What should you do with your digital assets?  Who gets your bitcoin?  What happens to your Facebook account?
September  
Do you have a plan for long-term care in case you become disabled or need assistance? Have you thought about where you will find help if you are no longer able to care for yourself?

• Learn how long-term care insurance works and what Medicare pays (or likely doesn’t pay) for;
• Learn about Independent Living, Assisted Living, Memory Care, Nursing Home, and Home Care and Adult Day Care;
• Learn how to qualify for Medicaid.