Powers of Attorney
A Power of Attorney is the most important document you can have during your lifetime. While wills and trusts distribute your estate after death, a Power of Attorney benefits you during your lifetime.
A Power of Attorney lets people you specifically designate make specific decisions regarding your assets and medical care at specific times. There are many different Powers of Attorney. Which one is right for you? I will be happy to discuss the various Powers of Attorney with you during a free estate planning consultation. Please call 509-928-4100 to make your appointment. Until that time, consider these different Powers of Attorney:1) DURABLE POWER OF ATTORNEY:
This document allows person(s) you designate to act for you in the event you become mentally or physically unable to care for yourself or your assets. Essentially, it is on standby until it is needed. This document only takes effect when two of your attending physicians sign off stating you are mentally or physically incompetent. If and when you regain competency, the Durable Power of Attorney goes back to its standby position. This is the most common Power of Attorney.2) GENERAL POWER OF ATTORNEY:
A General Power of Attorney is a very powerful document. It gives a person of your choice 100% of the power you have over your assets. General Powers of Attorney are only recommended in very, very limited situations. In the event you become incompetent, this Power of Attorney becomes null and void.3) GENERAL POWER OF ATTORNEY WITH DURABLE PROVISIONS:
As its name suggests, this Power of Attorney is a combination of the Durable Power of Attorney and the General Power of Attorney. It too gives one or more people of your choosing 100% of the power you have over your own assets. But unlike the General Power of Attorney, it will continue to be in effect in the event that you become mentally or physically incompetent.4) LIMITED POWER OF ATTORNEY:
A Power of Attorney can be drafted in such a manner as to limit what powers you grant someone and how long you give them those specific powers. Most commonly I see Limited Powers of Attorney used to buy and sell real estate. For example, if a couple is purchasing a home and the wife will not be in town the day the papers need to be signed, the title company will only let the husband sign for the wife if he has her Power of Attorney. In these instances I draft a Power of Attorney specifically giving the husband authority to sign all closing papers regarding the specific residence. Usually the Power of Attorney is only valid within a 1-2 month period.WHAT HAPPENS IF I DON'T HAVE A POWER OF ATTORNEY?
The following actually happened to a client of mine. The names have been changed to protect the client’s identity.
Jim had always been a good son. His parents were in their late 70’s when his mother passed away. Jim continued to have a close relationship with his father.
Jim started noticing odd behaviors from his father. His father would forget to check the mail or pick up his newspaper for days at a time, forget to eat or occasionally miss family evening meals. But it wasn’t until Jim received a call from the police one night that he and his father realized how bad things had gotten.
Jim’s father went to the grocery store about 8 p.m. Upon his return to the house he had lived at for over 36 years, he suddenly forgot where he lived! The poor man drove around panicked for hours before the police found him in a dark deserted parking lot, slumped over the steering wheel sobbing.
Jim was ready and willing to help his father. Unfortunately, Jim’s father did not have any type of Power of Attorney.
Jim needed the legal right to make decisions for his father and be able to access his father's accounts to pay monthly expenses. Jim was left no option but to pay for a guardianship. According to Jim, the worst part was that the guardianship required his father to be declared legally incompetent.
After completing the guardianship for Jim's father, both Jim and his wife came in for complete estate planning. Both of their estates include Durable Powers of Attorney so that a guardianship will never be necessary for either of them.WHAT CAN YOU DO?
Avoiding such a nightmare is simple. Make sure that you and your family members include an appropriate Power of Attorney in each estate plan. The estate plan may include wills, trusts or family limited partnerships but should always include an appropriate Power of Attorney.
I am happy to answer any questions or concerns you may have regarding Powers of Attorney or any other estate planning documents.COMMUNITY PROPERTY AGREEMENTS
This simple document is one of my favorite tools to avoid probate following the death of the first spouse. It can only be used by married couples who are citizens of the United States and is specifically recognized by the laws of Washington.
As a community property state, Washington recognizes all property obtained during a couple’s marriage as property belonging to both husband and wife equally. All property obtained before marriage is considered separate property. As you can imagine, there are exceptions to these rules. For example, if one spouse receives an inheritance during the marriage, even though the inheritance is received while the couple is married, the inheritance is still considered separate property as long as it isn’t comingled with other community property.
A Community Property Agreement is perfect for married couples who each wish to leave everything to their surviving spouse. Instead of filing a probate action, the Community Property Agreement is filed with the county auditor, which allows all property to be transferred to the surviving spouse.
Although this estate planning tool is not appropriate in all cases, it is wonderful in many estate plans. The document also has some flexibility. For example, if John and Wanda are married United States citizens and each agrees that the other should inherit everything when the first of them dies, an attorney should suggest that they have a Community Property Agreement (CPA). But what if John has a gun collection that he wants to go to his son? What if Wanda has jewelry that she wants to go to their daughter?
These wishes can be handled within the CPA.Directive to Physicians (a/k/a Living Will or Advanced Directive)
A Directive to Physicians lets your family and the hospital know what your wishes are concerning end of life decisions when you are unable to communicate those wishes.
So often a loved one is called upon to decide whether or not to leave someone on life support when there is no hope of recovery. In such an event it has been my experience that a Directive to Physicians gives great comfort and support to the person making that decision.
The Directive to Physicians directs under what circumstances you want to be kept alive by artificial means. You may recall the case of Terri Shiavo. She was a young woman whose husband fought to have her removed from like support and to have hydration discontinued, while her parents fought to keep her alive artificially.
Terri Shiavo did not have a Directive to Physicians. Although her husband claimed that she told him that she didn’t want to be kept alive artificially, there was no record of that. Ms. Shiavo was 26 when she was put on life support. She was taken off of life support following a United States Supreme Court battle and died at the age of 41.
By planning ahead and having an attorney draft your directive to physicians, you can decide under what conditions you would like for life support to end, such as the cessation of brain wave functions, or you may direct that you are to be kept alive at all costs.
There are many variations to such a document. Please feel free to contact Trunkenbolz | Rohr PLLC in the Spokane Valley and let us help you plan ahead so that your loved ones aren’t stuck with making such a difficult decision without knowing what you want.Trust Provisions for Minors and Others in Your Will
The number one reason that clients go to an attorney to have a will drafted is for the protection of minor children. Within your will provisions may be added stating who will care for your minor children should both parents die. Additionally, you may name a separate person or the same person to care for your children’s finances. This person is known as the Trustee. Another concern for parents is when will their children inherit?
I recommend that while the children are minors (under the age of 18 in Washington State) the Trustee receive funds for the minor under the MESH standards. MESH stands for: Maintenance, Education, Support and Health.
However, once the child turns 18, unless provisions are made in this trust, the child will receive all of the money left in the trust. Consider an 18 year old receiving $200,000. Not a good idea.
Instead of receiving all of the money left in the trust at 18, I recommend that parents consider payments of a percentage of the trust over a given number of years. For example: When the child reaches the age of eighteen (18) years, the Trustee distributes upon request, all trust income at least semi-annually and one-fourth (1/4) of the principal; upon reaching the age of twenty-one (21) years, each said beneficiary shall receive one-fourth (1/4) of the principal balance; upon reaching the age of twenty-four (24) years, the beneficiary shall receive the final principal balance and accrued income of the beneficiary's trust estate.
Of course the above distribution is only a suggestion. As the client who knows your children best, the amounts, frequencies and ages can be adjusted to your specifications.
Such trusts are not only beneficial to minors who inherit your estate, but can also be designed to help any other person that you wish to benefit and may need assistance in managing finances.
THERE IS NO ADDITIONAL CHARGE FOR ADDING A SIMPLE TRUST TO YOUR WILL.
Give Trunkenbolz | Rohr PLLC a call today. We are conveniently located in the Spokane Valley and will be happy to discuss your goals for your estate planning during a free consultation. (509) 928-4100