Life is unpredictable. We never know when even the healthiest among us might succumb to an accident or an illness and lose our ability to take care of ourselves and our finances. That’s why it’s important to have an incapacity plan – a set of effective legal documents that help to ensure that people you know and trust are in charge of your well-being should you become mentally incapacitated.

A Revocable Living Trust can be an integral part of your incapacity plan. Here’s how it works:

When you establish a Revocable Living Trust, you’ll name a trustee and a beneficiary.  At first, you’ll serve in both of these capacities. However, you’ll also name a successor trustee who will be responsible for managing the trust in accordance with your instructions in case of your death or disability.

Once the trust is established, you’ll fund it by transferring your property into it. At this point, ownership and control of the trust property rests in the hands of the person serving as trustee. So, if you suffer an illness or injury that causes you to become disabled, your successor trustee will have the authority to manage the trust funds for your benefit. This helps you to avoid the need for a court-appointed guardian or conservator.

Of course, a Revocable Living Trust is only one piece of an effective incapacity plan. It allows your successor trustee to manage property that belongs to the trust at the time of your incapacity. It doesn’t cover property that remains outside the trust, nor does it authorize your successor trustee to make medical decisions on your behalf.

In addition to a Revocable Living Trust, you’ll likely need a Durable Financial Power of Attorney appointing an agent to manage your non-trust assets. You’ll also need an Advance Directive expressing your wishes as to end-of-life medical care and appointing a healthcare surrogate to make medical decisions on your behalf.

The Law Offices of James A. Miller is a member of the American Academy of Estate Planning Attorneys.

One of the most important things you can do to make sure that your estate plan functions as intended is to name alternates – an alternate executor and successor trustee, an alternate guardian for your children, and even alternate beneficiaries.  Here’s why:

Alternate Fiduciaries

If you only name one guardian for your children, one executor, or one successor trustee, and that person can’t (or doesn’t want to) take on the job when you pass away, then a court proceeding could be necessary to put someone in the vacant position. In some situations, this could leave family members open to arguing over who should serve in the role.

The same is true of the agents you appoint under your Health Care Proxy and your Financial Power of Attorney. If you’ve only named one agent, and that person predeceases you or can’t step in and make decisions for you when the time comes, you and your family are apt to face Living Probate, which can be a time-consuming and costly process.

The better option is to name at least one alternative person to serve in each important role in your estate plan. This way if your first choice can’t or won’t serve, another person of your choosing can be ready to step in and help to ensure that your estate is settled smoothly.

Alternate Beneficiaries

Another kind of alternate you may want to name is an alternate beneficiary. If you have an item of property that you want to distribute to a particular loved one – and especially if you want to keep that property away from other family members – it’s important to talk with your estate planning attorney about what would happen if your intended beneficiary passed away before you.  If you name an alternate beneficiary to receive an important item of property, you can help ensure that the property makes its way into the hands of someone who has your approval.

The Law Offices of James A. Miller is a member of the American Academy of Estate Planning Attorneys.

Family life means adjusting and adapting to all kinds of changes.  Life changes when you get married, it alters dramatically when a new baby is born, and it shifts again in the event of a divorce or when your children go off to college.  As our parents age and become less able to care for themselves, yet another important change takes place. This time, we as adult children often take on the role of our parents’ caregivers.  This can be an uncomfortable transition, especially when it comes to finances. A recent  Bankrate feature discusses some of the steps you can take to help your parents with their finances as they  get older.  Here are a few of the highlights.

• Get involved before it’s a necessity.  The time to start talking about your parent’s finances is while they’re still healthy and functioning well. If your parents don’t have an incapacity plan or an estate plan, there’s still time to put one in place. Plus, engaging in these discussions now lays the groundwork for tackling more difficult financial issues if your parents’ health begins to decline. 
• You should have Power of Attorney for your parent. In case of a temporary (or a permanent) health issue, you’ll want to be able to make sure your parents’ bills are paid and that their finances are taken care of.  As agent under a Durable Financial Power of Attorney, you’ll have the authority to do this. Your parents might also want to consider naming you co-trustee of their revocable living trust. This gives you the flexibility to help manage their finances, even if it’s not necessary for them to completely relinquish control of their finances. 
• Court intervention should be a last resort. What if you have a mom or dad who wants to remain in control, but they are beginning to make financial decisions that are detrimental? You might want to employ a strategy like making sure there’s a limited amount of funds in your parent’s checking account, or try other non-legal strategies before seeking guardianship or conservatorship.

For more information on how you can help your aging parents, you can talk to an experienced elder law attorney.

The Law Offices of James A. Miller is a member of the American Academy of Estate Planning Attorneys.

In what ways does your faith influence how you live your life? In big and small ways, our beliefs and our religious traditions have an impact on many of us, from the holidays we celebrate, to how we choose to raise our children, and for some of us, down to our daily routines and the foods we choose to eat or abstain from eating.

Faith can also have a huge impact on the medical treatments we choose, and those we avoid. And, if you’re severely injured or in the final stages of a serious illness, you might not be able to communicate your wishes concerning medical treatment. This is why it’s important to talk to your estate planning attorney about ensuring that your beliefs are honored by your doctors in case of your incapacity.

If you can’t make your own healthcare decisions, you need an Advance Medical Directive in place that clearly and effectively communicates what treatments you do and do not wish to receive, along with any religious basis for those wishes.

You also need a Healthcare Proxy. This document lets you appoint someone you trust – and who knows and supports your beliefs – to make medical decisions on your behalf in the event of your incapacity.

Your estate planning attorney can also help you put together a plan for your funeral or other final arrangements that honors your religious beliefs and traditions.

No matter what your final wishes, it’s important that you discuss them with your family ahead of time. This can be even truer when your loved ones don’t share your beliefs. Knowing what to expect in advance can help those who are close to you support your decisions, and it can result in reducing conflict during a stressful and emotional time.

The Law Offices of James A. Miller is a member of the American Academy of Estate Planning Attorneys.

A Financial Power of Attorney is a fundamental piece of the estate planning puzzle. It’s a legal document that allows you to appoint a trusted loved one or friend to stand in your shoes and manage your finances for you.  This person is called your “Attorney in Fact” or your “Agent.”

While You’re Alive

When you create a Power of Attorney, you enumerate the powers your agent will have. You can grant your agent broad authority to act on your behalf, or you can limit his or her authority. You can also choose the circumstances under which your agent is allowed to act on your behalf.  With a Springing Power of Attorney, your agent can only step in and manage your financial affairs if you become disabled. With a Durable Power of Attorney, your agent has authority to act as soon as the document is signed, and that authority continues in the event you’re disabled.  This allows your agent to step in and handle your financial transactions while you’re traveling or in other situations.

After Your Death

Your agent only has authority to act under your Power of Attorney while you’re alive. When you pass away, your Power of Attorney automatically becomes invalid. This means that your agent does not have the right or the authority to pay funeral expenses or other final bills using your Power of Attorney. Instead, the responsibility for managing your final affairs falls to your successor trustee, if you leave behind a  Living Trust, or to your Personal Representative, if you pass away with a Will or with no estate plan.

The Law Offices of James A. Miller is a member of the American Academy of Estate Planning Attorneys.

Money is one of those touchy subjects that many families just don’t talk that much about. It can be especially difficult for aging parents to discuss money with their adult children. But, when your mom and dad keep you in the dark about their financial difficulties – or their lack of adequate planning – they’re not the only ones who suffer. You and your siblings will likely share in the emotional and financial burdens that come along with the Living Probate process if your mom and dad don’t have an incapacity plan in place.

What is Living Probate?

Living Probate is the term used for the process of appointing a guardian or conservator to take care of a person and/or his property when that person has become mentally disabled. So, if your parent has a stroke, develops dementia, or even has an accident resulting in an incapacitating injury, Living Probate might be necessary. Your family would petition the court to appoint a guardian or conservator (normally a family member) who would be responsible for managing your parent’s money and other property. The process itself has a number of disadvantages. It’s costly, it takes time, it makes your parent’s medical condition public, and it can be very stressful for your entire family.

How Can Living Probate be Avoided?

Fortunately, Living Probate can be avoided with a little advance planning. The key to avoiding this court process is for your mom or dad to put an incapacity plan in place. An incapacity plan is a set of legal documents that are designed to express the maker’s wishes as to who will manage his or her financial and other affairs in the event of disability. When it comes to financial decision making, there are generally two documents that are used in a disability plan: the Living Trust and the Durable Power of Attorney.

1. The Living Trust: With a Living Trust, not only can your parent avoid probate at death, he or she can appoint a trustee to take over his or her trust property in the event of disability, avoiding Living Probate as well.
2. The Durable Power of Attorney: A Durable Power of Attorney can be used with a Living Trust, or alone. This incapacity planning tool lets your mom or dad appoint an agent to manage bank accounts; pay bills; buy, sell and rent property and otherwise handle a wide range of financial and legal functions on his or her behalf.

Mental incapacity also brings up issues surrounding medical decision making, and these issues can be addressed with separate incapacity planning documents. A qualified estate planning attorney can help make sure your parent has a comprehensive incapacity plan that addresses all the issues.

The Law Offices of James A. Miller is a member of the American Academy of Estate Planning Attorneys.

Your living trust can serve as the foundation of your incapacity plan. If you become disabled, and you have a properly funded living trust, your successor trustee can take control of your trust assets and manage them for your benefits. This helps you avoid the need for a court-appointed guardian or conservator.

A Living Trust Does Not Replace a Power of Attorney

But your living trust does not eliminate the need for a Durable Power of Attorney. With a Durable Power of Attorney, you appoint an agent who can manage your non-trust property in the event of your disability. This means that your agent can take control of property you inadvertently left out of your trust, and fund it into your trust. It also means, as long as your Power of Attorney has the appropriate provisions, that your agent can manage retirement accounts and engage in Medicaid planning on your behalf – things that your successor trustee doesn’t have the power to do.

You Need Advance Medical Directives, Too

In addition to a Durable Power of Attorney to provide for management of your finances, you also need to put in place Advance Medical Directives. These include a Health Care Proxy and an authorization to disclose protected health care information (more commenly referred to as HIPAA). With a Health Care Proxy, you can appoint an agent to make medical decisions for you if you’re too sick or injured to do so yourself. With a HIPAA authorization, you can leave a list of people you want to have access to your health care records for your doctors.

Your estate planning attorney can help you put an effective incapacity plan in place.

The Law Offices of James A. Miller is a member of the American Academy of Estate Planning Attorneys.

Your healthcare agent is the person you select, using a Durable Power of Attorney for Healthcare, to make medical decisions on your behalf if there ever comes a time when you can’t make those decisions for yourself.

Difficult Decisions

Often, healthcare agents are charged with the responsibility of making difficult, life-or-death decisions on the spur of the moment. Your agent might be asked to decide things like:

• Whether to continue end-stage cancer treatments, or transfer you to hospice care to focus on your comfort and quality of life instead of your battle against the disease;
• Whether to provide you with artificial nutrition and hydration if you’re at the end of a terminal illness or if you’re in a persistent vegetative state;
• Whether to place you on, or remove you from, a ventilator.

Your Agent Needs to Know Your Wishes

How can your agent make effective decisions on your behalf if he or she doesn’t know how you feel about these important issues? It’s not possible. And yet, people appoint healthcare agents every day without really equipping them to do their jobs.

The solution? Talk to your healthcare agent. First, make sure the person you’ve appointed is actually prepared to do the job.

Then, let your agent know things like:

• Under what circumstances you’d want to be resuscitated.
• How you feel about tube feeding; under what circumstances would you want it? Are there any circumstances where you’d want it to be stopped?
• When you would – and wouldn’t – want to be placed on a ventilator.
• What medications you want to receive, and what medications you wouldn’t want doctors to administer.
• How you feel about hospice or palliative care, and when you think it’s appropriate.
• Are there any treatments you’re strongly opposed to?

Having this discussion with your healthcare agent is an essential step toward empowering him or her to make the right decisions for you.

The Law Offices of James A. Miller is a member of the American Academy of Estate Planning Attorneys.

You’ve made your Advance Directive; spelling out your preferences for what medical treatments you do and don’t want your doctor to administer if you’re terminally ill – or seriously injured – and near death. And maybe you’ve started to worry about whether the medical professionals in charge of treating you in such a situation would really have to follow your instructions.

The good news is that, in general, doctors do have to abide by the wishes that patients set out in their advance directives. In general, they also have to follow the instructions given by a patient’s healthcare agent. And, most of the time, peoples’ wishes are honored. However, there are a few exceptions.

When Can a Doctor Disregard Your Wishes?

When can a doctor decline to honor your instructions, or those of your agent?

• When they violate his or her conscience
• When they violate the policies of the hospital or health care facility where you’re being treated, based on conscience
• When they are contrary to generally accepted health care standards and practices, or if they would lead to medically ineffective treatment

What Happens Then?

So what happens if your wishes – or your agent’s instructions – are not followed for one of these permissible reasons?

Your doctor can’t just refuse to treat you and leave it at that. He or she has to let you or your agent know that your instructions are not being honored. Then, if requested, the doctor or the healthcare institution has to take the necessary steps to transfer you to another treatment facility where your wishes will be honored.

Avoiding a Problem

One of the best ways to avoid a situation where your wishes are ignored is to discuss your advance directive with each doctor who treats you. If you become aware of a problem, hopefully you and your doctor can discuss it and come to a resolution. If not, you’ll have enough time to find a doctor who will honor your wishes.

The Law Offices of James A. Miller is a member of the American Academy of Estate Planning Attorneys.