As seniors enter their golden years, there are many mindset shifts and things that need to be discussed. Difficult conversations often occur and important decisions need to be made for the future.
Many people don’t like to think about the fact that they may lose the capacity to deal with financial, legal, and healthcare decisions on their own, but having a proper plan in place will ensure that you and your family are taken care of if the time comes.
Planning ahead using a will or trust, power-of-attorney designations, and advanced directives can be a quick and painless process that can provide peace of mind and save stress, time, and heartache down the road.
Planning Your Last Will Or Living Trust
A will is a legal document that gives directions on how a person’s assets should be handled when they pass. A will typically has an appointed executor who will be charged with executing the will when the time comes.
In order for a will to be deemed effective, it must be probated. This means it has to be determined to be valid and genuine.
Since the validation process involves a lengthy court process in some cases, many people choose to set up a living trust instead. If the living trust is set up properly from the beginning, a court of law does not need to validate a living trust as they would a will.
A living trust is created by transferring some or all of a person’s assets to the trust. The trustor (creator of the trust) can name other people to be in charge of the trust when they are no longer able to handle their affairs (either due to death or incapacitation). A living trust may continue to operate after the trustor dies.
If someone should die without a will or living trust, state law will determine what is to be done with the person’s assets. If they have heirs, it will likely be divided among them, but probate law varies from state to state.
The Living Will
A living will is also known as a healthcare directive or advanced directive. It is a written statement that gives directions for how certain healthcare scenarios should be handled in the case that someone is incapacitated, terminally ill, or unable to communicate.
Part of the process of creating a living will includes officially designating a durable power of attorney for health care (DPOAHC) that names a certain person as a health care agent. This DPOAHC will have the authority to make health care decisions on behalf of the incapable person, should the need arise.
This person should be someone well-trusted since they are often charged with life or death decisions.
Designating Durable Power Of Attorney (DPOA)
In the case of incapacitation, the DPOA will act as the patient’s legal guardian. This agent will ensure that an attorney manages all the principal’s personal matters, including financial and healthcare issues.
The principal does not need to name one person to control both healthcare and finances, and instead, can name a designated power of attorney for health care (DPOAHC) and a designated power of attorney for finances (DPOAF).
When these are being set up, the principal can decide upon limitations for these agents to handle their affairs. For example, they might be able to pay the principal’s taxes, but may not be able to sell the principal’s home.
If your capabilities diminish as you age to the extent that you are not able to manage your affairs, you may have to talk with a legal advisor about naming a guardian to make decisions on your behalf. In a guardianship situation, it is up to a court to decide if the person with diminishing mental capacity should retain their right to make decisions about their own affairs or pass that responsibility along to the designated guardian.
Obtaining medical evidence may be required for this proceeding to come to a proper conclusion. Evidence could be the results of examinations done by physicians, psychologists, or psychiatrists. After the evidence is gathered and a petition for guardianship is filed, it is up to the court to decide if that person requires guardianship, full or limited; complete or partial.
It’s important to note that guardianship might last a few weeks, months, or years. However, they most often last for the remainder of the person’s lifetime.
If you are considering naming guardians for yourself or a loved one, it’s important to understand their responsibilities. These could include:
- Deciding where the person will live and monitoring their living conditions regularly
- Consent for medical treatments and monitoring of the process
- Consent for services such as education and counseling
- Providing consent for the release of confidential information
- Making end-of-life decisions
- Report to the court at least once per year about the guardianship status
- Protect and manage assets
- Receive income for the estate
- Disburse any necessary payments on the person’s behalf
The difficult part of guardianship is that they are often done in an adversarial manner. A family may believe their loved one requires guardianship for their own safety and well-being, while the loved one wishes to remain autonomous.
This can be challenging to deal with as a family. The family of the principal may feel like guardianship is the only way to truly protect their loved one, so a court ruling that denies it may be hard to process.
The matters discussed above can get very messy very fast, so it’s important for savvy seniors to have these affairs well-planned in advance while there is no question that they are lucid and voicing their true desires in their directives.
Thinking about creating a will may seem morbid or depressing, but the peace of mind it brings knowing that all your affairs are in order regardless of what happens to you is so worth it!
If you have yet to create a will, trust, or otherwise get your affairs in order, we encourage you to reach out to an attorney today to start the process. It’s never too early to be prepare for anything.