A fellow attorney (and award-winning journalist) Deborah Jacobs authored the book, “Estate Planning Smarts: A Practical, User-Friendly, Action-Oriented Guide”. In her recent Forbes article titled “Estate Planning for Women (And the Men who Love Them)” she indicated the below question is a question every financially savvy woman should be able to answer.
Whom can you trust?
Advancements in medical science and care may enable us to live fuller, longer lives. But that also means more women are likely to suffer from a diminished mental state-a harsh reality that’s difficult to accept. In case that happens, you should have a durable power of attorney, appointing a family member, friend or adviser as an agent to act on your behalf in financial and legal matters. Also make sure you have a health-care proxy, a separate document that authorizes an agent to make medical decisions on your behalf.
Choose carefully: A power of attorney, though necessary for all of us, is unfortunately also a license to steal. The best person to put in charge is a close family member-preferably one who lives nearby. Most financial advisers do not want this responsibility, nor is it cost effective to pay their hourly fee to handle routine tasks like paying bills. Naming joint agents, which is allowed only in some states, is one way to provide checks and balances. Or you can appoint another person, like an attorney, an accountant or a family friend, to supervise the arrangement. Before selecting an agent, it is important to determine whether that person is willing to take on the duties.
If you’re nervous about giving the signed document to your designated agent right away, you could leave it with your lawyer with instructions on when to turn it over. In that case, remember to tell your agent whom to contact.
Or, instead of making the power of attorney effective from the moment you sign it, you can specify that it be activated by a specific event, for instance, if you become incompetent. The problem with this approach, known as a springing power, is that someone must decide when you have reached that state. Traditionally, this has required a medical opinion.
Questions like this one can often trigger even more questions in your mind. Please accept my invitation to schedule a meeting where we can discuss this topic and others that might be relevant to your estate planning. Give my office a call to set a meeting.