Providing Things Honest: Estate Planning (2)

This article will discuss important documents that you should have, especially as you get older or if you have a serious illness.

Living Will

Officially known as an Advanced Directive for Health Care, a Living Will is a written document, prepared in advance when the individual is “competent” (of sound mind), that directs an individual’s physician to initiate, continue, withhold, or withdraw life-sustaining medical treatment if the individual becomes irreversibly comatose (in a permanent state of unconsciousness) or is incompetent and terminally ill. Since the specific requirements of each state for a Living Will may differ, each state’s laws on this subject should be ascertained and followed. In most states, anyone of sound mind who has either turned 18, graduated from high school, or is married, may execute a Living Will. You might wish to name a surrogate (agent) to carry out your wishes should you be unable to communicate. You also can specifically prohibit certain persons from acting as a surrogate. By law, hospitals and nursing homes must provide patients with limited information concerning Living Wills. However, hospitals and nursing homes may not charge different fees regardless of whether or not a patient has a Living Will. It is suggested that you give a copy of your signed and witnessed (and if required by the state’s law, notarized) Living Will to your attending physician so that it is made part of your medical record. It must be underscored that in many states a Living Will becomes operable ONLY when the attending physician is provided with a copy and the attending physician determines that the patient is in a permanent state of unconsciousness or is incompetent and in a terminal condition. Only when, and only if, all of the state’s requirements are followed is a Living Will able to give your agent authority to make end-of-life decisions for you. Finally, if a patient has not executed an Advanced Directive (i.e., a Living Will), there is no presumption of a patient’s intentions to consent to, or to refuse, life-sustaining treatment. However, many states have legislation stating that when there is no Advanced Directive, a close relative, with the consent of two physicians and without court involvement, may authorize the removal of life-sustaining treatment from an adult relative who is in a permanent state of unconsciousness OR is incompetent AND in a terminal condition.

Durable General Power of Attorney

A Durable General Power of Attorney is an important and powerful document that enables another person to act on behalf of its maker. Any mentally competent adult may grant a Power of Attorney. A child or incompetent adult may do so through a parent or court-appointed guardian. The person creating the document is called the principal and the person carrying out the wishes of the principal is called the agent. Although the principal must be mentally competent when he signs the document, the document will remain valid even after the principal becomes incapacitated. This continuing validity is known at law as durability.

In some states all General Powers of Attorney are durable unless the document specifies otherwise. The principal or his court-appointed guardian may revoke the Power of Attorney at any time with written notice to the agent. A Durable General Power of Attorney becomes particularly important should the principal become incapacitated – whether this incapacity is short-lived or of longer duration. In essence, a Durable General Power of Attorney may grant the agent the power to do anything financially or legally that the principal could do. Therefore it is important to consider to what extent you wish to empower your agent.

The Durable General Power of Attorney may be effective immediately or only when a specific, future event has occurred. Such a triggering event might be when your doctor certifies that you are disabled either physically or mentally. However, the need to certify a “triggering” event may cause delay in the ability of your agent to act for you. Therefore, you should carefully consider the pros and cons of this feature. In order to minimize family differences, you should consider advising your family of your plans for incapacity (with regard to your Durable General Power of Attorney, Durable Health Care Power of Attorney, and Living Will), as well as plans for your estate. Additionally, it is much more efficient to name only one agent rather than a group of agents in your Power of Attorney. You should also name a contingent agent in case the agent you name is unavailable or no longer willing or able to act on your behalf.

Your signing of your Durable General Power of Attorney should be witnessed by two adults and notarized. This type of formality is required for an agent to act in certain transactions (for example, in the purchase or sale of real estate). This formality will also increase the acceptance of your Durable General Power of Attorney document(s) in many other states or countries. Copies of your Durable General Power of Attorney are as valid as the original. However, many people experience difficulty in getting banks or other financial institutions to recognize the authority of an agent under a Durable General Power of Attorney. Banks are often reluctant to accept Durable General Powers of Attorney for fear of being sued if the Power of Attorney is not valid. A certain amount of caution on the part of financial institutions is understandable. To prevent problems later, contact your bank when you execute your Durable General Power of Attorney to determine what information the bank needs to accept your document. Many banks or other financial institutions have their own standard Power of Attorney forms. In addition, you can provide the bank with a copy of your Durable General Power of Attorney for their file.