We are often asked, “What will happen if I can’t take care of myself?” Below is part one of a series discussing this important issue.
Many people resist planning for a time when they may be unable to make their own legal and financial decisions, perhaps out of fear of losing control, or a worry that they don’t know who to choose to assist them, or simply because that they can’t imagine that they will ever need that kind of help.
However, if you don’t act while you still can and name your own alternate decision-maker, your family may need to go to probate court to file a petition for conservatorship in order to help you. That process is costly, public, and burdensome during a time when they would rather be spending time with their loved one, rather than in a court room. The good new is, it’s avoidable! With a properly drafted Durable Power of Attorney, you can name a primary and alternate person to make legal and financial decisions for you in the event that you either cannot make them for yourself or if you just start slowing down and want the assistance with activities like bill paying and managing assets.
It’s important to remember that not all Durable Powers of Attorney are created equal. So, what are some powers that a good Durable Power of Attorney should include?
1. Self-Dealing Powers – you may want your spouse, child, or family member to be able to transfer assets to him or herself. In the context of MassHealth planning, transfers may be necessary in order to achieve the government benefit.
2. Retirement Planning Powers – it may be necessary for your agent to make certain elections with regard to your IRA or 401k. If this power is not specifically included, it may result in your agent being unable to withdraw your Required Minimum Distributions by the deadline and could cause a 50% penalty on the amount not withdrawn.
3. Banking Powers – your agent will likely need to write, receive, sign and endorse checks, deposit and withdraw funds, and open and close checking and savings accounts in banks or other institutions.
4. Trust Powers – it may be advisable for your agent to create and fund a revocable or irrevocable trust, or to amend or revoke any such trust to the same extent that you would be empowered to do.
5. Governmental Entitlement Powers – if you need care, at home or in a nursing home setting, your agent will need this power to deal with any and all state or federal agencies in order to apply for benefits on your behalf.
These are just a few of the provisions that should be included in your Durable Power of Attorney. Stay tuned next month for a discussion on important considerations related to your personal and medical decisions.
If you haven’t chosen your alternate decision-makers, or if you have a Durable Power of Attorney that you want to have reviewed to make certain it will work for you when you need it to, we invite you to contact our office to schedule a meeting with one of our attorneys to gain clarity on your plan and learn recommendations to best accomplish your objectives. If interested, please contact our office at 508-994-5200.
©Surprenant & Beneski, P.C. 35 Arnold Street, New Bedford, MA 02740, 336 South Street, Hyannis MA 02601 and 45 Bristol Drive, Easton, MA 02375. This article is for illustration purposes only. This handout does not constitute legal advice. There is no attorney/client relationship created with Surprenant & Beneski, P.C. by this article. DO NOT make decisions based upon information in this handout. Every family is unique and legal advice can only be given after an individual consultation with an elder law attorney. Any decisions made without proper legal advice may cause significant legal and financial problems.