It’s human nature to think we’ll always be able to take care of the daily financial matters we all routinely manage. Things like paying the rent or insurance or utilities, or writing checks. But what if an injury, accident, or illness takes you out, and you can’t do that, either for a short time or a long time? Who will take care of things for you?
Here is a list of documents that allow you to choose who takes care of things for you.
- Durable Power of Attorney Instrument: This is a legal document that allows you to choose the person who will manage your financial affairs if you can’t. This is a private document and usually works well if you trust your designated decision makers and are confident there is no potential for abuse. Although the intent is that it be used only if you can’t act for yourself, it is a “live” document when it is signed. Generally, you keep possession of it and your agent uses it only if and when you become incapacitated. Alternatively, a Springing Durable Power of Attorney Instrument can be used. This is not a “live” document when it is signed; rather, it “springs” into action only on the happening of a specific event, such as a medical condition that prevents you from making financial decisions on your own.
- Revocable Trust, also known as a Living Trust: A Revocable Trust allows you to retitle your assets as owned by your Revocable Trust. While you are alive and capable you manage the assets the same way you presently do. If you become incapacitated, however, the successor Trustee(s) that you’ve chosen will take over the job of managing the assets, but only as you specifically have directed in the Trust, not as they choose. This gives you a degree of protection not afforded by a Durable Power of Attorney Instrument.
What happens if you do not have these documents in place?
- Conservatorship: If you don’t have a Durable Power of Attorney Instrument or a Revocable Trust, the only way a third party can manage your finances is by being appointed as the conservator of your estate. This involves an application to the local Probate Court, a hearing, usually a bond, and usually a periodic accounting report. Generally, managing finances through a conservatorship is more expensive, time consuming, and formal than managing finances through a Durable Power of Attorney Instrument or Revocable Trust. Sometimes, though, use of a conservatorship is what is best for your protection.
- Health care decision making: If you are unconscious and someone needs to make health care decisions for you, who will that be? Although many health care providers will allow a spouse or child to act for you, you can’t count on that. Legally, you need to have designated someone to be your health care representative. That is a separate legal document. If you haven’t designated a health care representative and the health care provider insists on someone with authority, you will need to have a conservator of your person appointed by the Probate Court.
There are lots of choices that you are able to make. The best way to determine what is right for you is to meet with an attorney who will ask the right questions, listen to what you say, and make recommendations individually tailored for you.
For advice specific to you, please contact the office. We would be glad to meet with you for a no hassle, no charge initial consultation, no matter how long it lasts.