As we have learned through the coronavirus pandemic, life is precious and unpredictable. Too many aging Americans found themselves with a life-threatening COVID-19 illness in 2020 without legal documents naming trusted love ones to make decisions for their well-being while they were incapacitated. Family caregivers are generally given the task of some medical and financial coordination on your behalf, and they will operate on your behalf most effectively with documents that afford them legal authority.
Without these important documents appointing them as legal representatives, they will wind up in the court system trying to sort things out to act on your behalf. Decisions will be up to your state’s proxy, conservatorship, and guardianship laws, and you may have a court-appointed representative instead of someone you prefer. Even young and healthy individuals need to identify their legal representatives. Unexpected accidents and illnesses do not discriminate by age.
An elder law or estate planning attorney can explain about naming executors and trustees and health care surrogates and power of attorney agents for your state. Each of these roles constitutes a type of caregiving, and while your attorney can advise you, the final decision is up to you as the client. Careful selection of representatives is crucial as they will have control over the medical care you receive, your property and assets, and even where you live and how you spend your time.
One person does not have to fulfill all roles. A sister might be very responsible with money, while a brother might be more of a day-to-day caregiver. The individuals appointed can change in time as a good choice today might not be in ten years. Choose your representation with current circumstances in mind and update your documents as life goes on and things change. Some of the most important attributes for all representatives to have are trustworthiness, responsible behavior, and a willingness to be ready and able to serve.
Your agent or attorney-in-fact, if you are married, is often your spouse. If not a spouse, it is useful to choose someone nearby and discuss your decision with the family to avoid potential conflicts or hurt feelings. If you have a living trust, name your trustee and if you need an institutional representative, name the person, not a bank. When your agent starts, their role is dependent on what type of power of attorney you choose. An attorney can explain the differences between the five types of attorney-in-fact:
- general power of attorney
- durable and nondurable power of attorney
- medical power of attorney
- limited (special) power of attorney
- springing power of attorney
Whichever type, your agent will have a tremendous amount of power over either your well-being, property, and assets. It is often best to distribute the power of attorneys amongst competent, trusted family members or friends. This approach does not bog down one individual with an overwhelming number of tasks. By law, your agent will have a “fiduciary standard” to adhere to as they must act in your best interest or potentially be held civilly or criminally liable. Encourage the use of professional guidance to carry out their duties successfully.
Your executor, as named in your will, will administer your estate after you die. The purpose is to take an inventory of your estate assets, retain an attorney, pay your final taxes, and any creditors with a valid claim. If you set up a trust, your trustee can act on your behalf if you are alive, after you die, or both. The trustee controls your assets according to the terms and conditions as put forth in the trust. When appointing a trustee, identify someone dependable and trustworthy, good with money, and efficient as they will adhere to the same fiduciary standards as your powers of attorneys.
Don’t overlook naming a neutral professional if you feel you do not have good choices within your friendship or family circles to handle these important roles. You can select a caregiver advocate, accountant or attorney, someone within a financial institution or trust organization to fill these roles. These individuals are a solid alternative as they will operate with a high degree of competence and professionalism. These representatives will earn a fee for their services, but the higher cost can ensure your interests remain protected and your wishes followed. A professional appointee can also reduce family tension and possible litigation in contentious family situations.
Whoever you choose for these important roles, talk through your expectations and wishes with them about assuming this great responsibility. Transparency in discussions and instructions about your finances and wishes provides a road map that can ease a caregiver or representative’s stress. An estate planning or elder law attorney can guide you through the processes of identifying the right people for the right roles and create legal documents that reflect your decisions. Your care will go more smoothly and as you wish with representation properly in place, acting on your behalf during a medical crisis.
We would be happy to work with you to create an estate plan that follows your wishes, including the naming of important legal representatives. If you’d like to discuss your particular situation, please don’t hesitate to reach out. Please contact our Cincinnati office by calling us at 513-771-2444 with any questions.