Durable Power of Attorney

Can I Revoke a Power of Attorney?

Sometimes it may become necessary to revoke a Power of Attorney, like in the following story, which takes an unpleasant twist after Cindy’s stepsister Charlotte suggests that she be given power of attorney to help Cindy with her business matters. When Cindy agrees, Charlotte’s attorney creates a Durable Power of Attorney that names Charlotte as her agent. What happened next, according to the Glen Rose Reporter in the article “Guarding against the evil stepsister,” was a nightmare.

Revoke a Power of Attorney
A power of attorney can be revoked at any time.

A few weeks later, Cindy’s brother Prince found that Charlotte had moved money from Cindy’s personal bank accounts into a completely different bank, setting up joint accounts in Cindy and Charlotte’s names and granting Charlotte right of survivorship (ROS). This made Charlotte the legal owner of the account at the time of Cindy’s passing. Charlotte had also contacted Cindy’s former employer and was attempting to wrest control of Cindy’s pension. It wasn’t clear whether she was attempting to obtain the entire amount in a lump sum, but she was attempting to gain control.

Cindy realized that Charlotte was not to be trusted. However, Charlotte had the power of attorney, and all of these actions were legal. Could Cindy revoke the power of attorney that she had signed? The answer is yes, which is important to know.

There were two paths available to Cindy: she could immediately execute a revocation of the Durable Power of Attorney that had been used to give Charlotte authority, or have her attorney create a new power of attorney granting power of agency to another person. Either way, Charlotte would be stripped of the legal authority to act on Cindy’s behalf.

Cindy had a new POA created, naming her brother Prince as her agent. The new POA had to immediately be presented to all of the financial institutions she deals with. She contacted her former employer and gave them proper notice that Charlotte no longer had authority to represent her. The new joint accounts that Charlotte had opened were then closed and individual accounts in her name only were open, which also ended the ROS.

Cindy had to anticipate another challenge—that Charlotte might attempt to have Cindy declared incompetent and have herself named as Cindy’s legal guardian. To protect herself, Cindy’s estate planning attorney drew up documents stating that in the event Cindy ever needed someone to be her guardian, she did not want Charlotte to be named. In addition, she named the person she would want to be her guardian, if that is necessary in the future. While a judge ultimately has final discretion, the courts generally prefer naming a guardian as requested by an individual.

Your estate planning attorney can revoke a power of attorney at any time you’d like, especially if it becomes clear that the person you’ve named is not acting in your best interests. Having an estate plan in place in advance of any medical or mental challenges is always better, so that you are less vulnerable to anyone trying to take advantage of you during a difficult time.

Reference: Glen Rose Reporter (Sep. 10, 2020) “Guarding against the evil stepsister”

Is Your Estate Plan COVID19-Ready? Three Things to Review Now

Even if you have done comprehensive estate planning with the guidance of a qualified attorney, you may want to re-evaluate certain elements of your plan now, through the lens of the coronavirus pandemic.

Why? There are two uniquely challenging aspects of this pandemic that your current plan may not adequately address.

  1. Medical treatment for severe cases of COVID19 frequently involves intubation and ventilator therapy to combat respiratory failure … and
  2. Quarantine and isolation orders blocking hospital visitors create some communication barriers between patients, doctors and family members.

How might these unique challenges impact your estate plan?

Living Wills. If your living will contains a blanket prohibition on intubation, you may want to reconsider that decision.

Durable Powers of Attorney (DPOA). Given the communication difficulties that may arise when a patient is hospitalized during this pandemic, you may want to revisit the terms of your DPOA to make it easier for your agent to act on your behalf.

Health Care Proxy. A health care proxy allows you to appoint someone else to act as your agent for medical decisions. Under normal circumstances, this person would likely confer with your attending physicians in person and again, these in-person communications may be difficult right now. You want to add language to expressly authorize electronic communication with your agent.

A qualified estate planning attorney, who focuses exclusively in this area of the law, can advise you on whether your current plans accurately represent your wishes during this uniquely challenging time.

Resource: ElderLawAnswers, Three Changes You May Want to Make to Your Estate Plan Now Due to the Pandemic, April 30, 2020

If Not Now, When? It is the Time for Estate Planning

What else could possibly go wrong? You might not want to ask that question, given recent events. A global pandemic, markets in what feels like free fall, schools closed for an extended period of time—these are just a few of the challenges facing our communities, our nation and our world. The time is now, in other words, to be sure that everyone has their estate planning completed, advises Kiplinger in the article “Coronavirus Legal Advice: Get Your Business and Estate in Order Now.”  

Business owners from large and small sized companies are contacting estate planning attorney’s offices to get their plans done. People who have delayed having their estate plans done or never finalized their plans are now getting their affairs in order.

Because the virus is recognized as being especially dangerous for people who are over age 60 or have underlying medical issues, which includes many business owners and CEOs, the question of “What if I get it?” needs to be addressed. Not having a succession plan or an estate plan, could lead to havoc for the company and the family.

Establishing a Power of Attorney is a key part of the estate plan, in case key decision makers are incapacitated, or if the head of the household can’t take care of paying bills, taxes or taking care of family or business matters. For that, you need a Durable Power of Attorney.

Another document needed now, more than ever: is an Advance Health Care Directive. This explains how you want medical decisions to be made, if you are too sick to make these decisions on your own behalf. It tells your health care team and family members what kind of care you want, what kind of care you don’t want and who should make these decisions for you.

This is especially important for people who are living together without the legal protection that being married provides. While some states may recognize registered domestic partners, in other states, medical personnel will not permit someone who is not legally married to another person to be involved in their health care decisions unless they are appointed in an Advanced Health Care Directive.

Personal information that lives only online is also at risk. Many bills today don’t arrive in the mail, but in your email inbox. What happens if the person who pays the bill is in a hospital, on a ventilator? Just as you make sure that your spouse or children know where your estate plan documents are, they also need to know how to access your online accounts, who your estate planning attorney is, where your insurance policies, financial records and legal documents are and your contact list of key friends and family members.

Reference: Kiplinger (March 16, 2020) “Coronavirus Legal Advice: Get Your Business and Estate in Order Now.”

What is an Advance Directive and Do I Need One?

These are difficult questions to think about. However, as every estate planning attorney knows, the questions “What is an Advance Directive?” and “Do I need one?” are very important. Should you ever become unable to speak for yourself, reports the Enid News & Eagle in the article “Veteran Connection: What you should know about advance directives,” there is a way to make a plan, so your wishes are known to others and by legally conveying them in advance, making sure you have a say, even when you don’t have a voice.

Everyone needs Advance Directives
Everyone over the age of 18 should have an Advance Directive so family and doctors know your wishes.

The advance directive helps family members and your doctors understand your wishes about medical care. The wishes you express through these two documents described below, require reflection on values, beliefs, views on medical treatments, quality of life during intense medical care and may even touch on spiritual beliefs.

The goal is to prepare so your wishes are followed, when you are no longer able to express them. This can include situations like end-of-life care, the use of a respirator to breathe for you, or who you want to be in the room with you, when you are near death.

It should be noted that an advance directive also includes a mental health component, that extends to making decisions on your behalf when there are mental health issues, not just physical issues.

There are two types of documents: a durable power of attorney for health care and a living will.

The durable power of attorney for health care lets you name a person you trust to make health care decisions when you cannot make them for yourself. This person is called your health care agent or surrogate and will have the legal right to make these decisions. If you don’t have this in place, your doctor will decide who should speak for you. They may rely on order of relationships: a legal guardian, spouse, adult child, parent, sibling, grandparent, grandchild or a close friend.

A living will is the document that communicates what kind of end of life health care you want, if you become ill and cannot communicate with your doctors. This helps your named person and your doctor make decisions about your care that align with your own wishes.

Another very important part of this issue: the conversation with the people who you want to be on hand when these decisions have to be made. Are they willing to serve in this capacity? Can they make the hard decisions, especially if it’s what you wanted and not what they would want? Do you want a spouse to make these decisions on your behalf? Many people do that, but you may have a trusted family member or friend you would prefer, if you feel that your spouse will be too overwhelmed to follow your wishes.

For additional information about Advance Directives and estate planning, download our free books and reports.

Reference: Enid News & Eagle (March 13, 2019) “Veteran Connection: What you should know about advance directives”

Why You Need to Review Your Estate Plan

One of the most common mistakes in estate planning is thinking of the estate plan as being completed and never needing to review your estate plan again after the documents are signed. That is similar to taking your car in for an oil change and then simply never returning for another oil change. The years go by, your life changes and you need an estate plan review.

Review your estate plan periodically to insure that it will work the way you want it to

The question posed by the New Hampshire Union Leader in the article “It’s important to periodically review your estate plan” is not if you need to have your estate plan reviewed, but when.

Most people get their original wills and other documents from their estate planning attorney, put them into their safe deposit box or a fire-safe file drawer and forget about them. There are no laws governing when these documents should be reviewed, so whether or when to review the estate plan is completely up to the individual. That often leads to unintended consequences that can cause the wrong person to inherit assets, fracture the family, and leave heirs with a large tax liability.

A better idea: review your estate plan on a regular basis. For some people with complicated lives and assets, that means once a year. For others, every four or five years works just fine. Some reviews are triggered by major life events, including:

  • Marriage or divorce
  • Death
  • Large changes in the size of the estate
  • A significant increase in debt
  • The death of an executor, guardian or trustee
  • Birth or adoption of children or grandchildren
  • Change in career, good or bad
  • Retirement
  • Health crisis
  • Changes in tax laws
  • Changes in relationships to beneficiaries and heirs
  • Moving to another state or purchasing property in another state
  • Receiving a sizable inheritance

What should you be thinking about, as you review your estate plan? Here are some suggestions:

Have there been any changes to your relationships with family members?

Are any family members facing challenges or does anyone have special needs?

Are there children from a previous marriage and what do their lives look like?

Are the people you named for various roles—power of attorney, executor, guardian and trustees—still the people you want making decisions and acting on your behalf?

Does your estate plan include a durable power of attorney for healthcare, a valid living will, or if you want this, a DNR (Do Not Resuscitate) order?

Do you know who your beneficiary designations are for your accounts and are your beneficiary designations still correct? (Your beneficiaries will receive assets outside of the will and nothing you put in the will can change the distribution of those assets.)

Have you aligned your assets with your estate plan? Do certain accounts pass directly to a spouse or an heir? Have you funded any trusts?

Finally, have changes in the tax laws changed your estate plan? Your estate planning attorney should look at your state, as well as federal tax liability.

Just as you can’t plant a garden once and expect it to grow and bloom forever, you need to review your estate plan so it can protect your interests as your life and your family’s life changes over time.

Reference: New Hampshire Union Leader (Jan. 12, 2019) “It’s important to periodically review your estate plan”

Get These Three Estate Planning Documents In 2019

These may not be the first things you are thinking about as we launch into a brand-new year, but the idea is not to wait until you’re not thinking clearly or when it’s too late and you don’t have what you need to protect yourself, your family and your property. The details, from the Fox Business news article, “3 financial documents everyone needs,” are straightforward. Put this on your to-do list today.

A Will. The essential function of a will is to ensure that your wishes are carried out, when you are no longer alive. It’s not just for rich people. Everyone should have a will. It can include everything from your financial assets to life insurance, family heirlooms, artwork and any real estate property.

A will can also be used to protect your business, provide for charities and ensure lifelong care for your pets.

If you have children, a will is especially important. Your will is used to name a guardian for your minor children. Otherwise, the state will decide who should raise your children.

Your will is also used to name your executor (referred to as the Personal Representative in Florida). That is the person who has the legal responsibility for making sure your financial obligations are honored and your assets are distributed according to your wishes. Without an executor, the state will appoint a person to handle those tasks.

An Advanced Medical Directive. What would happen if you became ill or injured and could not make medical decisions for yourself? An advanced medical directive and health care proxy are the documents you need to assign the people you want to make decisions on your behalf. The advanced medical directive, also called a living will, explains your wishes for care, including end-of-life care. The healthcare proxy appoints a person to make healthcare decisions for you. As long as you have legal capacity, these documents aren’t used, but once they are needed, you and your family will be glad they are in place.

A Durable Power of Attorney. This document is used to name someone who will make financial decisions if you are not able to do so. Be careful to name a person you trust implicitly to make good decisions on your behalf. That may be a family member, an adult child or an attorney.

Once you’ve had these documents prepared as part of your estate plan they documents should be reviewed and updated every now and then. Life changes, laws change and what was a great tax strategy at one point may not be effective, if there’s a change to the law. Your estate planning attorney will help create and update your estate plan.

Reference: Fox Business (Dec. 19, 2018) “3 financial documents everyone needs”

4 Things to Take Care of Before Your Kids Go Off to College

Once your child reaches the age of 18, your decision-making role as a parent is significantly diminished, especially in regards to making healthcare decisions.

4 Things to Take Care of Before Your Kids Go Off to College

May is graduation month. This is a time when many of you may be celebrating your children’s academic achievements, and even getting ready to send them off to college. During this hectic and emotionally tumultuous time, parents may be all-consumed with helping prepare their soon-to-be college student for the next phase, causing them to overlook important estate planning matters.

Once your child turns 18 you can no longer help them make healthcare or financial decisions unless they sign the proper estate planning documents.

Don’t forget these important items that should be added to your to-do list as you get ready to send your kids off to college.

1.  Durable Power of Attorney for Health Care

Every year, roughly a quarter of a million young adults between the ages of 18-25 wind up in the hospital according to Forbes.com. From alcohol poisoning and nonlethal accidents to unexpected illnesses, it’s important to remember to hope for the best, but prepare for the worst. Once your child reaches the age of 18, your decision-making role as a parent is significantly diminished, especially in regards to making healthcare decisions.

Should your child get in a car accident, or fall ill and not be capable of making their own medical decisions, then without a durable power of attorney naming you as their health care agents, even though you’re their parent, you are not allowed to make medical decisions on your child’s behalf. To ensure that you can continue to make healthcare decisions for your child, then working with you and your child to create a health care power of attorney should be at the top of your to-do list.

  1. HIPPA Authorization

In order to make informed medical decisions, it’s also important to include a HIPPA authorization form along with a health care power of attorney. Without it, you would be unable to communicate with healthcare professionals and insurance companies, as well as access your child’s health records and previous treatment information.

  1. Durable Power of Attorney (Finances and Property)

Similar to a health care power of attorney, a financial power of attorney gives you the ability to make financial decisions on your child’s behalf, should they be unable to do so themselves. Should your child become disabled for any reason, then you would still be able to pay their rent, credit card bills, utilities, access bank accounts and financial records, as well as manage any loans they may have.

  1. Last Will and Testament

While many parents don’t want to think about this topic, especially as their child leaves home, it’s an important one to add to your list. A will allows you to honor their child’s wishes on what should be done with their social media accounts, bank accounts, and personal assets. It also allows your child to specify any funeral arrangements they may like to have.

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