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Using a Durable Power of Attorney

There are certain situations in life in which you may want someone else to make decisions on your behalf. Without a legal document, your intentions for who should play this role may be impossible to achieve. Thankfully, however, there are documents you can draft with the help of your estate planning lawyer so that this person is already clearly established legally as your power of attorney. 

You may wish to have a power of attorney that empowers different people to step in to make healthcare decisions for you and financial decisions. It’s also possible that the same individual might play both of these roles for you, such as a spouse. Having these documents put together is important, but it’s also critical that you keep them updated if your life circumstances change. For example, if you get divorced, it’s time to schedule a meeting with your estate planning lawyer to update this information. Without making new versions, the last valid version of these documents (as well as your will) remains in effect. This could empower a former spouse to make healthcare or financial decisions for you.

It’s important to have these documents regardless of your age. Many parents of college-bound students will use these documents to ensure that they are able to step in and help if need be. Others overlook this, but this can present healthcare issues as an 18 year old is legally an adult. Adding “visit the estate planning attorney” to your pre-college checklist is strongly recommended both for a review of your own documents as well as putting together durable powers of attorney for the college student.

Equipping someone with your power of attorney is an important responsibility and it’s a choice that should be made carefully. Make sure that not only are you comfortable with the decision but also that the person you name in this role is comfortable playing that part should the time come.

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Reasons You Need a Medical Power of Attorney

A medical power of attorney may also be referred to as a healthcare surrogate or a healthcare proxy, but this critical document allows you to appoint another individual to make medical decisions on your behalf if you become unable to do so. In the event that you are no longer able to understand medical instructions as a result of advanced cognitive decline or being in a coma or in any situation where you are no longer able to communicate, you will need someone who can identify the situation and pass on your wishes to the healthcare provider. 

Your physician can help you to determine whether or not you are unable to make your own medical decisions. When this occurs, the person you have selected with the medical power of attorney, otherwise known as your agent, can make medical decisions on your behalf. It is strongly recommended that you select someone you trust and someone who understands your wishes. Frequently, this agent will be a family member but it could also be a neighbor or a friend who lives closer than family members.

This individual should carefully understand his or her responsibilities as they may need to communicate your decisions about your end-of-life care. If you do not have this document and become incapacitated, the court will be responsible for appointing a guardian for you. Without having this document, you may be leaving the opportunity to make these pertinent decisions about your future up to someone else who you are not familiar with.

                                      

                                                                                                                        

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Three Types of Powers of Attorney That You Should Be Aware of

A power of attorney refers to your written approval for someone else to act on your behalf in business, legal or private affairs. Many people overlook the benefits of a power of attorney because they assume that the primary aspect of estate planning is to handle things after you pass away. However, this could be a major mistake as incapacity or disability can happen at any point during your life and not having someone to step in and manage your affairs can create further confusion and problems.NJ estate planning lawyer

 

There are three primary types of power of attorney, including:
• Durable power of attorney, which allows another individual the authority to manage financial transactions on your behalf. This allows you to appoint someone else to manage all of your financial affairs if necessary.
• A healthcare power of attorney that enables you to allow someone else to oversee your medical care and make healthcare decisions on your behalf if you are unable to do so.
• A springing power of attorney. Much like a durable power of attorney, this allows you to appoint someone else to handle your financial affairs and this can only happen when there has been a triggering event such as your incapacitation.
To learn more about various powers of attorney, reach out to the offices of an experienced New Jersey estate planning attorney today.

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What Powers Should I Consider Giving to My Power of Attorney Agent?

In addition to managing your financial affairs on a day to day basis, an individual appointed to represent you can also take steps to implement your estate plan, depending on how you structure your power of attorney. A power of attorney is a crucial document in your estate planning, but it’s one you should not put together unless you work directly with an estate planning attorney. There’s a lot of peace of mind in knowing that you have chosen someone to step in on your behalf if you are unable to do so, but this appointment also comes with a lot of responsibility and is thus a decision you should take seriously. 

 

An agent is usually unable to revise your will on your behalf but an agent can still impact the outcome of how assets are distributed by changing the title associated with those assets. This is why it is always a good idea to stipulate in your power of attorney whether or not you want an agent to have these powers. Gifts are another important aspect of many estate plans.
Your power of attorney agent can frequently make gifts on your behalf so long as he or she remains subject to guidelines that are structured in the power of attorney. In addition to making gifts on your behalf and impacting how assets are distributed, the laws in your state may also allow you to give your power of attorney real estate management powers if you do own a vacation home or valuable personal property. Talk to your estate planning attorney to learn more about this process.

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Tips for Choosing a Power of Attorney Agent

You should never underestimate the impact that selecting a person to serve as your power of attorney agent could have. This person may play a significant role in your life down the line, so it’s essential to think carefully before making this decision. shutterstock_45049690

The following tips might help you make this decision. Having all the facts gives you the best chance to make an informed choice.

  • Most people consider or select a family member to act on your behalf. Make sure that if you name more than one person in this role that not all may be available to make decisions at the same time. This same group of people might not agree, either, which is why it’s strongly recommended you name one person and a contingent agent.
  • Before designating co-agents, think about whether issues involving full availability and agreement could impair prompt and effective decision0mkaing
  • Name a successor in the event that the original agent is unable to act when called upon
  • Make sure the individual you select is aware of your decision and is someone you can trust. Since this person may be making decisions on your behalf, you should feel completely confident about his or her ability to carry out decisions with your needs in mind. This person should also be accepting of the authority offered by a power of attorney role. Some individuals may be uncomfortable with serving in this manner, so make sure that you act first.
  • Update your POA designation if your feelings change or if the original person is no longer able to fulfill this role. A POA is only valuable if kept current.

To learn more about New Jersey estate planning, contact our firm today at info@lawesq.net.

 

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Power of Attorney Planning – Get the Fast Facts

One of the most important parts of your lifetime estate planning has to do with a power of attorney. This document gives one or more individuals the authority to act on your behalf as your official “agent”. You can give this individual narrow powershutterstock_45049690s or you can give them broad discretion over acting in your capacity.

If you wanted to limit their powers, for example, you could stipulate that this person only has the authority to act to help close the sale of your home. This power, too, can be temporary or permanent, based on your needs. Many people choose to have the power of attorney be “triggered” by a certain type of event, such as your incapacity. This is referred to as a springing power of attorney.

Choosing the right person to serve as your agent is an important process, especially if you are electing powers with broad latitude permanently. You should consult directly with an estate planning lawyer to learn more about how the power of attorney will impact your life and what powers you should include within this document.

You should carefully weigh your options when putting together a new power of attorney. Getting advice from an outsider can help you avoid costly mistakes and have the peace of mind that you have made the right decision. Call us today to discuss your power of attorney or schedule an appointment over email at info@lawesq.net.

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Back To School Tips: Important Documents for Parents of New College Students

There’s no doubt that your mind is already pretty preoccupied with many different lists of supplies, last-minute shopping, and packing with your new college student. But it’s critical that you think about whether getting your adult child’s signature on two key estate planning documents is a good step. These two documents are a health care proxy and durable power of attorney.

So why, in the midst of everything else, should you be concerned with estate planning? In the majority of states, parent will not have the authority to determine health care decisions for children once those children have turned 18. This is true even if the parents are paying tuition or claiming those individuals as dependents on their tax returns. If the child were involved in an accident, for example, or became disabled, a parent might have to get court approval in order to act on behalf of his or her child.

Having both of the above-mentioned documents in place before your child goes off to college can give you a sense of peace and confidence that you will be able to act on behalf of your child in a worst-case scenario. Consider adding these crucial documents to your safebox at home today. In the event of an emergency, you can focus on caring for your child. Contact us today at 732-521-9455 or info@lawesq.net.

Back To School Tips: Important Documents for Parents of New College Students

 

 

 

 

 

 

 

 

 

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Changing Your Power of Attorney

What if you already executed a power of attorney some years ago and now want to change that person? Is it as simple as revoking the old one and creating a new one? Make sure you’ve investigated whether your power of attorney is “durable” or “springing”. What’s the difference?

Changing Your Power of Attorney
(Photo Credit: monkeyoffyourback.com)

A springing POA is a person who has not yet assumed his or her position yet, making it much easier to change your plans. If you named someone else as a backup and would prefer that person now be your POA instead, you can amend your existing power of attorney to reflect this change in plans.

If the POA is actually a durable attorney, meaning that this individual was empowered to act on your behalf immediately after the document was executed, you may need to do a little more work. You should use certified and first class mail to notify the original individual that he or she has been removed as POA in case there is a dispute down the line about termination and institution of a new POA. If you believe that this person is out there exercising authority under your old Power of Attorney, you’ll need to take responsibility for contacting banks or other institutions where this is an issue. Make sure you have your estate planning attorney keep copies of all your documents on file in case there are any questions. To begin or change a power of attorney and any other estate planning documents, call us at 732-521-9455 today or request a meeting via email at info@lawesq.net.

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The Fifteen Best Countries for Overseas Retirement in 2014

It is not uncommon for Americans to spend significant time away from their home state in order to take advantage of more favorable living conditions. Be it to live for less, for diversity investments, or to simply enjoy one last adventure, more and more Americans are choosing to retire abroad. A recent article discusses the 15 best countries for Americans to retire in 2014.

The Annual Global Retirement Index created the list based on a series of factors, including the price of necessary goods and services such as groceries and utilities, average temperature, and friendliness of the locals. As executive editor Jennifer Stevens explains, the list is “designed to be a real-world snapshot of the places we deem most worth a potential-retiree’s attention today.”

English: View of the Chagres River in Gamboa, ...
English: View of the Chagres River in Gamboa, Panama. (Photo credit: Wikipedia)

Topping the list for 2014 is Panama. As Stevens explains, Panama offers American retirees a “great combination of variety and value…No matter what it is you’re hoping to find, Panama is a good place to look for it.” The remaining rankings are as follows: (2) Ecuador, (3) Malaysia, (4) Costa Rica, (5) Spain, (6) Colombia, (7) Mexico, (8) Malta, (9) Uruguay, (10) Thailand, (11) Ireland, (12) New Zealand, (13) Nicaragua, (14) Italy and (15) Portugal.

Taking advantage of overseas options does not always mean changing your place of residence, but precautions should be taken to make sure that your estate plan is appropriately adjusted for your travel. To determine your unique considerations before booking your tickets, consult with a qualified estate-planning attorney.

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Can Only One Child be Given Power of Attorney?

For those parents who have multiple children, estate planning is often a matter of attempting to determine what distribution of powers will be perceived as ‘fair’. The reality is that different children have different interests and skills that make them appropriate for various estate planning responsibilities. A recent article discusses how to divvy up estate planning powers between your children.

Family Discussion
(Photo credit: LRJ53)

This decision may be an easy one. For example, if all but one of your children has moved out of state, it makes sense to name the local child as your power of attorney. However, if the local child is irresponsible or untrustworthy, somebody else should be named.

Sometimes it is easier to first consider which children should not serve as your power of attorney. Your power of attorney will be responsible for making financial and legal decisions on your behalf. Some children are simply not cut out for this task.

If you have more than one child who you believe could serve as your power of attorney, it is possible to draft several limited powers of attorney to spread out responsibility among your children. For example, you could assign one child to tend to your business affairs and another to handle your personal financial affairs.

For assistance in setting up a power of attorney, please contact us at 732-521-9455.

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3 Steps for Baby Boomers Without a Plan

While every mentally competent individual over the age of 18 should have an estate plan in place, it is especially important that Baby Boomers without a plan begin to put something together. A recent article offers several estate-planning strategies for baby boomers to begin planning:

Last Will And Testament
(Photo credit: Ken_Mayer)

    1. Create a Will and Trust: No matter what type of estate planning scheme a person employs, he or she should incorporate a will into that scheme. Within a will, a person can designate a guardian for his or her minor children, as well as the distribution of personal items such as heirlooms and valuable items.

    2. Designate a Power of Attorney: A power of attorney is a vital document for any estate plan, because it allows you to designate a person to handle your financial and legal affairs should you be involved in an accident.

    3. Create a Health-Care Power of Attorney and Living Will: Just as a power of attorney allows an individual to designate the person who will handle his or her financial and legal affairs in the event of an accident or emergency, a health care power of attorney allows an individual to designate the person who will make medical decisions on his or her behalf.

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Why Everyone Needs a Power of Attorney

A power of attorney is a vital part of any estate plan. Through this document, an individual gives another person the right to act on his or her behalf, should he or she become incapacitated. A recent article discusses why everyone needs a power of attorney.

It is impossible to know when you may become injured, sick, or otherwise incapacitated and unable to tend to your financial and legal affairs or make medical decisions for yourself. By establishing a power of attorney, you give a person of your choosing the ability to pay your bills, manage your assets, and make important decisions concerning the medical care you receive.  Parents of young children may also use a Power of Attorney to memorialize guardian wishes for their young children in the event of an incapacity.

Despite the importance of designating a power of attorney, most people have not done so because they believe that, should an accident occur, their family will be able to simply step in and make any necessary decisions. However, this is not always the case. Not only may a person’s loved ones argue about who should manage your affairs and how they should be managed, but they may not have the legal authority to take important actions on your behalf.

There are two types of power of attorney, one to designate the person who should make medical decisions for you, and the other to designate the person who should make financial decisions for you. Every individual should execute both.

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Back to the Basics: Estate Planning for a “Typical” Family

Contrary to popular belief, estate planning is still important for the vast majority of Americans who are not wealthy. After all, after a person has worked his or her entire life to amass all of his or her assets, he or she should seize the opportunity to direct what happens to the assets after his or her death. A recent article discusses five important estate planning maneuvers for the “typical” family (although we are pretty sure there is no such thing as a “typical” family).

Day 73: Kerns family self portrait {about me}
(Photo credit: lorenkerns)
  1. Sign an Advance Health Care Directive: This document allows you to put your wishes in a document to be followed by your doctors, concerning the end-of-life medical care you’d like to receive.
  2. Complete a Durable Power of Attorney, which will allow you to select the person who you would like to take control of your financial affairs, should you become unable to do so.
  3. Execute a Last Will and Testament: This is an important document because it directs the distribution of your assets. Through your will, you designate the guardian for your minor children.
  4. Complete and review your beneficiary designations: These are the designations on policies, such as life insurance, that pass straight to your intended heirs upon your death.
  5. Be sure to consider the impact of property held via joint ownership. Such property is inherited immediately by the joint owner upon your death.
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When You Aren’t Sure Where to Start: Having an Estate Planning Discussion with an Elderly Parent

A majority of adults find it difficult to discuss financial issues with their aging family members. Although these are often difficult and uncomfortable conversations to have, they are often necessary. Moreover, it is important to have these conversations with your parents early, before they become unable to handle their financial lives. A recent article discusses how to start this conversation, and what topics to cover.

One way to ensure that you bring up this topic is to make an appointment with yourself to do so. A good idea is to plan the discussion for after a family gathering such as a birthday party. This way, other family members can join in the conversation. If you believe that your parents and family members will be receptive to the idea, select a date and time and then invite them to join in on the conversation.

During the conversation, it is important to discuss several different aspects of your parent’s estate. The first aspect is legal. Determine whether your parent has done any estate planning. If yes, ask where the legal documents are and what estate planning tools are employed, such as wills or trusts. Your parent may also wish to explain any distributions.

Another important aspect to discuss is healthcare. Determine what types of health coverage your parent has aside from Medicare. This may include long term care insurance, or simply some money set aside for anticipated health care costs. Finally, determine whether your parent has executed a health care power of attorney. If he or she has not, encourage him or her to do so. This will be an essential step should the time come when your parent is unable to make their own decisions on their healthcare.

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Applying the K.I.S.S. Principle: – Simplifying Estate Planning

For members of the baby boomer generation, estate planning is about more than organizing their financial affairs. Many Boomers wish to create estate plans that leave a legacy and make a difference in the world. However, when considering these estate planning goals, Boomers might quickly become overwhelmed with the task at hand. A recent article offers simple tips for Boomers to get started on their estate plan and create their legacy.

The first step in creating an estate plan is making a list of all of your assets. This list should include all real estate, valuable personal property, insurance accounts, retirement accounts, the value of any trusts, and any amounts you expect to receive before you pass on. When making this list, be sure to note if any of these assets are tied to debt, such as a mortgage or lien on a home. After you list your assets, consider how you would like to distribute them, and who you would like your beneficiaries to be.

Next, consider who you would like to serve as your financial power of attorney. This is the person who is tasked with managing your financial affairs should you become incapacitated. Remember that incapacity can take many forms, such as mild dementia or an intensive hospitalization after an accident. You may limit this power if you wish. For example, you could provide a limited power of attorney to only handle your small business. With these important decisions, creating an estate plan will be essential in detailing your wishes should you become incapacitated.

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“Non-Tax Issues Within Estate Planning that Impact Everyone”

Estate planning is not solely about tax avoidance. A recent article discusses several other issues that render estate planning paramount, despite the value of your estate.

Medical Care
Every estate plan should include details as to how your medical needs should be addressed. A medical power of attorney designates who will make medical decisions for you, should you become unable to make these decisions for yourself. A living will designates what type of care you would like to receive. If you do not want life-saving medical treatments to be performed on you in the event of an emergency, consider a do-not-resuscitate order.

Avoiding Disputes
Poorly thought out estate plans often lead to chaos and disputes among a person’s heirs. Adult children often fight about the management and distribution of assets. Moreover, disputes become more common as a person’s family becomes more complicated. Do not assume that your children will work everything out after your death. Consider what disputes are likely and plan for them accordingly.

Care of Others
If you are caring for or anticipate caring for a relative, it is important to ensure that the person receives the appropriate care after you are gone. This person may be a child, elderly parent, grandchild or special needs family member.

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Estate Planning Devices That May Help Greedy Heirs to Your Assets

Several widely used estate planning devices may actually assist greedy heirs in helping themselves to your assets. A recent article warns of what these estate planning devices are.

The first device is a power of attorney for finances. This is a document that allows you to specify who you would like to make financial decisions for you should you become unable to make such decisions yourself. Depending on what your specific power of attorney document states, the person who holds your durable power of attorney may be able to write checks out of your bank account, buy and sell your securities, and collect your social security payments.

To avoid abuse of these privileges, it is important not only to carefully choose an agent whom you trust, but also to speak with your estate planning attorney about broadening or narrowing your agent’s power based on your unique situation.

Another device that may easily lend itself to abuse is the joint bank account. If two people jointly own an account, either can make a deposit or withdrawal. Furthermore, at the death of one joint owner, the bank account automatically reverts to the other owner. This reversion occurs even where the deceased joint owner’s will specifies that they would like the account to be inherited by someone else.