Pre-Planning is Key
Pre-planning is necessary to avoid needing a guardianship. People live much longer these days, and Dementia and Alzheimers are a common issue families face with loved ones or themselves. Pre-planning to deal with incapacity is very smart.
Failing to pre-plan means that it may be necessary to open a court-administered guardianship. This proceeding is very complicated, time consuming, and expensive. The time to avoid all this is before you or your loved one becomes incapacitated. If you are your loved one are already incompetent, it is too late! Guardianship is the only option then.
Drawing Up A General Power Of Attorney
When you or your loved one is still competent, a statutory durable power of attorney should be drawn up to appoint an agent to act on your or their behalf. The power of attorney can become effective immediately or when you or the loved one is judged incompetent by one or more doctors. The power of attorney can be as broad or as limited as the person signing it wants it to be.
Important questions to decide in drawing up a power of attorney include whether the agent will have the power to:
- change estate planning details
- change beneficiaries on life insurance or accounts
- draw up, revise, or revoke trust agreements
- make gifts, and subject to what limitations (this can be important if medicaid planning for the loved one becomes necessary.)
Drawing Up A Power Of Attorney For Real Estate
If one of the powers the agent might be called on to exercise is dealing with real estate, a special power of attorney might be drawn up for that purpose. It will need to be recorded in the real estate records of the county where any real estate is located. Title companies seem to prefer a separate real estate power of attorney.
Importance Of Appointing Alternate Agents
Just like having an understudy in a play is crucial, it is just as important to appoint alternate agents when drawing up your power of attorney. These alternates can automatically step in if the first agent cannot act for some reason. If alternates are appointed when the power of attorney is first drawn up, it avoids having to amend or draw up a new power of attorney if the original agent can’t serve. It will already be too late to appoint an alternate if you or your loved one have become incompetent. Then, guardianship may be the only option again.
This is one of those legal areas where procrastination is the enemy. Waiting too long to appoint an agent can cause you trouble and cost you a boat load of money. If you are ready to speak with an estate planning attorney about drawing up a power of attorney, please contact Adair M. Buckner today for a free consultation*.
*(The free consultation does not cover actual review of documents or giving legal advice on a specific situation.)