Advance directives can save you money and preserve family harmony!

Advance directives include a durable financial power of attorney, health care power of attorney, living will, and sometimes a "Do Not Resuscitate" order. These documents allow you to plan in advance what will happen if you become incapacitated or are unavailable to make an important decision. Here is a brief description of each of these documents.  

Durable Financial Power of Attorney - "Durable" means the power of attorney does not become void if you are incapacitated. If the power of attorney is not durable, it is no longer valid if you are incapacitated due to dementia, an illness, or accident. Because those crisis events are the very times you most need someone to act on your behalf, a non-durable power of attorney, although it may be appropriate for a single event, is not very helpful in the long run. 

A durable financial power of attorney gives you the power to name someone to make financial decisions for you in the event you are unable to do so yourself. For example, you may want to give a close friend or family member the ability to write checks for you and handle banking matters if you can't. This would allow someone to continue to pay your mortgage or rent even if you were hospitalized due to a car accident. Your durable power of attorney can do this and is usually a better way of managing your bank account than adding someone's name to the account. This is because, when you add someone's name, that person becomes a joint owner of the money in your account. This means, that person can withdraw all the funds in your account and that person's creditors can claim the money in your bank account. If the other person is receiving any kind of government benefits, your bank account can be treated as their asset and knock them off their benefits. If you are not careful, you can also unintentionally lose the right to determine what happens to your money after you die. A durable power of attorney avoids these banking mistakes.

Durable financial powers of attorney are very flexible and one size does not fit all! These powers of attorney can be very broad and cover a large number of situations or be limited to one transaction, like a real estate closing.

As you age, you should review and update your power of attorney periodically with your estate planning and elder law attorney to consider adding important additional powers.  For example, if you think you might need nursing home long-term care in the future, you should add provisions allowing someone the authority to apply for long-term care benefits and spend down assets to preserve as much of your hard-earned assets as possible to help you qualify for long-term care. If you have a power of attorney that does not allow your agent to do these things, your estate could lose a significant amount of money.  Having a financial power of attorney allows you to remain in control and choose how, when, and where your agent will manage your money and property if you cannot do so yourself. 

Health Care Power of Attorney - A health care power of attorney allows you to name an agent to make health care decisions for you if you become incapacitated. You can also choose what types of medical treatment you want under certain circumstances and whether you want to donate organs to others or to scientific research when you die. You can even list the physicians you would like to examine you to determine if you are incapacitated. Naming a healthcare agent in advance provides clarity about your wishes and helps avoid fights for control of your health care decisions by family members already under stress. This is especially important if you want someone other than your nearest relative to be in charge if you are in the hospital and unable to consent to medical treatment.

Living Will - A living will allows you to make decisions in advance about whether you want your life to be prolonged by artificial means under certain circumstances. In a living will, you speak directly to your doctors to let them know what kind of care you want to receive if you are seriously ill. You can also decide whether to give your healthcare agent the ability to enforce or revoke your living will in an emergency.

Do Not Resuscitate (DNR) - A DNR allows you to decide in advance that you do not want o be resuscitated if you have a terminal condition or a condition that will significantly reduce the quality of your life. 

For more information about planning ahead to preserve your life savings and family harmony, fill out the contact form to call 704.887.5242 to schedule a consultation with Nancy.

 

Nancy Roberts
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