Keep Your Affairs Your Affairs
By Michele Audet
In 1789, Ben Franklin proclaimed, “Nothing is certain but death and taxes.” While this is still true for us today, we are now experiencing “certainties” that our founding fathers never contemplated.
In Ben’s days few lived past 80. Today, people in their 80s are the fastest growing segment of our population and many will outlive their retirements and die penniless after long illnesses. Those who escape the long illnesses may leave the “well spouse” without resources to subsist due to economics. In addition, “the sandwich generation” is being emotionally and financially crunched. This generation is taking care of family members, juggling two jobs, trying to educate their kids, while trying to save for their retirement. To further complicate the “Golden Years,” divorce, remarriage, second families and cohabitation are very common place.
Estate planning professionals are trying to predict what Congress is going to do with the estate tax, which of course is impossible and dangerous. Yet the reality is that most do not have estates of such a sizable amount that we will ever pay estate taxes. So what we must focus on is the certainty of death and how do we prepare for death. We need to recognize what can happen to us and to our families during our lifetime, and develop a written plan that allows trusted family members or others to implement our plan should we, our spouses, or significant others become incapacitated or otherwise cannot care for themselves.
Without a life plan, NO ONE is in charge if you become incapacitated. If you do not have a plan in place you open yourself up to court imposed restrictions, significant legal and medical expenses, potential for emotional and physical abuse and your assets may go to the wrong people. There should be an orderly transfer of authority of your affairs from you to the person that you have faith and confidence in.
You can control your assets during your life with a Statutory Durable Power of Attorney. This document appoints an individual to act on your behalf with respect to your property. You are the “principal” and the person you choose to be the power holder is the “agent.” This document can be drafted with very specific powers or very broad powers, and can be effective now or in the event of incapacitation. Obviously, your agent will have significant power over your assets; thus it’s an important decision and consideration should be given to factors such as trustworthiness, age, and availability in time of need.
Secondly, you have the power to control your “person” during your life with a Power of Attorney for Health Care and Directive to Physicians. This document allows you to appoint an agent to make health care decisions when you are incapacitated, allowing you to place whatever limitations you want on that person’s decision making discretion. A Directive to Physicians directs your physician as to what treatments to give you in the event of incapacitation. It also allows you to express your intentions to withhold or continue life sustaining treatment in the event you have a terminal or irreversible condition.
Thirdly, a carefully drafted Will ensures that who you wish to inherit will indeed inherit your assets. With the rise of blended families a Will gives you the assurance that your assets stay within your family. A Will allows for a more efficient and less expensive administration to the estate and can assist in federal tax planning.
Finally, Medicaid pre-planning is not appropriate for everyone and is not desired by everyone. However, as the population ages, and the cost of long term care increases, there are many who will benefit from some degree of Medicaid pre-planning. Medicaid nursing home benefits are of great concern and value to the elderly and their families. I know from personal experience the great value of this. I was blessed with two wonderful grandmothers who lived well into their 90s! When the time came for nursing home care, I was overwhelmed with the complexity of establishing Medicaid eligibility. There were many things that we should have done in pre-planning that would have made things much simpler and would have allowed my grandmothers to preserve some of their hard earned assets.
Because of these experiences which are very personal to me, I am dedicated to being a resource for families who are either going through this or who just want to be prepared by having a life plan which affords them a sense of peace and control over their lives.
The Law Offices of Michele Audet, P.C. may be reached at 817-292-2000, or at www.micheleaudet.com.