For various reasons, many people don’t do estate planning or create advance healthcare directives – putting certain legal documents in place to make sure your financial and medical wishes are known if you become incapacitated. According to US News and World Report, two out of three Americans do not have an “advance directive”, which specifies a person’s wishes for health care decisions if they become incapacitated and only 6 in 10 American adults do not have a will or living trust (AARP).
This is especially important when Alzheimer’s disease or dementia is a factor. It’s critical to draw up these documents — and update older ones — while you still have the decision-making capacity to do so. If you don’t have the appropriate documents, a court can and appoint a guardian for you.
Described below are the documents that are recommended for advance planning. It’s best to seek the help of an attorney with these documents, as laws vary from state to state.
Power of attorney for finances: This legal document allows another person to manage your finances on your behalf. Many seniors designate a family member for this task. You can build in checks and balances by requiring that the agent provide a periodic accounting to a third party, such as another relative or a lawyer. Or you can require that another individual sign off on any gifts of your property. Powers of attorney should state the agent’s authority to handle specific investment accounts, annuities and other assets — details that aren’t included in some off-the-shelf documents. Make sure the power of attorney is “durable,” meaning that the agent’s powers continue when the person creating the power of attorney becomes incapacitated.
Living trust: A living trust can provide detailed guidelines on how your property should be managed if you become incapacitated. You can maintain control of the property or name one or more successor trustees to manage the property if you become incapacitated. You can include detailed instructions on how the money should be used if you are hospitalized or need long-term care. After you die, the trust allows the successor trustee to transfer your property to your beneficiaries without having to go through probate.
Living will: A living will spells out your wishes regarding life-sustaining treatment. Some states combine the living will with a health care power of attorney in one form.
The health care power of attorney: This document allows you to appoint someone to make medical decisions for you if you become incapacitated. You also can include specific instructions on how your agent should make your health care decisions. Laws governing these documents can vary from state to state. Look at the American Bar Association’s health care power of attorney guidance, titled Giving Someone a Power of Attorney for Your Health Care, at www.americanbar.org.
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The law office of elder law attorney Scott C. Painter, P.C., is located in Wyomissing (outside of Reading, PA, in Berks County,) and offers trusted legal services in the areas of elder law, including nursing home planning, trust and estate services, and veterans benefits. Scott C. Painter is a Certified Elder Law Attorney (CELA®), and he is also a member of the National Association of Elder Law Attorneys (NAELA).
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