Legal - Planning Your Health and Financial Needs
As the Senior Services Attorney for Kings/Tulare Area Agency on Aging, I provided legal assistance to individuals 60 and older who are among the most socially or economically needy of our population. According to the Older Americans Act, these folks are deemed “at risk” for losing their homes, benefits, autonomy, and financial security and are less likely than the average citizen to access appropriate legal assistance. Of course, no one wants to be in that situation, but too often we fail to take the necessary steps to prevent that eventuality. It is natural to postpone thinking about death, deteriorating physical or mental health, or family problems, be they are own or those of our loved ones. However, by doing so, we leave our loved ones and ourselves at the mercy of fate, and fate can be quite cruel.
Planning for the eventuality of death and other possibilities does not have to be a grim or scary task. There are lots of different tools available to prevent unfortunate situations. While none of them are entirely simple, you should always be able to understand exactly what you are choosing to do and the consequences of those choices. Whether you consult with me or another legal professional, you must be a good consumer. Do not ever sign anything you do not fully understand. Do not be afraid to ask questions. Do not feel that you are taking up too much of the professional’s time. Do not give in to “scare tactics” or other pressures. When you leave the professional’s office, you should feel confident that you have made decisions that are right for your individual situation.
Some of the tools you may have to consider are: wills, trusts, powers of attorney, and advance health care directives. Each of these is quite useful, but require careful thought in order to use them correctly. The topics covered in this article are only generally described for your information. You should not rely on this article alone to make important legal decisions.
A will can be the simplest form of estate planning or stating ‘who (beneficiary) should get what (bequest)’ when you die. Often a will included burial instructions, especially if you have made specific arrangements in advance. This is often a comfort to your loved ones as it is one less decision they have to make at a very emotional time for them. A will normally involves some form of probate, which is the mechanism for the beneficiary to get legal title to the bequest. There is a lot of talk about how awful probate fees are, but they depend upon the monetary value of the bequests and are often cheaper than the costs of setting up a trust.
As I often explain to clients, a will is like a list of instructions for someone (the Executor) to carry out regarding your property. A trust is like a box in which you place your property. There are rules about who can open the box, and what can be done with the property while you are alive. You can set up very specific rules for who can take property out of the box after you die.
Other ways to avoid probate include specific ways to hold title to property, such as joint tenancy, or providing for beneficiaries or “transfer on death” provisions for bank accounts, retirement funds and the like. Joint ownership can create some problems, giving others access to your accounts. It can, however, prevent problems should you become incapacitated and unable to take care of your own financial transactions.
Granting someone power of attorney, can have similar benefits and risks as joint ownership. Power of attorney allows someone (your agent) to act as you, for many legal purposes. Once granted, there is the potential for abuse by your agent. Third parties, such as a car dealership or credit card company, can rely on this document and allow your agent to make purchases or borrow money in your name, so that the payments become your obligation. Your agent can use the power of attorney to gain control of all of your assets. Abuse of this kind of power is far more common than we would like to believe. You should be very careful in chosing your agent and the type of powers you grant to that agent. The power of attorney can be narrowly written or broadly written, depending on your needs and fears. It can take effect immediately or not until a triggering event such as a doctor determining you are mentally unable to take care of your own business. While you can purchase a simple Uniform Power of Attorney at most stationary stores, it is best to consult a legal professional before making it final. You must be legally competent to execute a power of attorney. If you cannot clearly communicate your wishes due to mental or physical handicap, you probably are not legally competent.
California also allows you to designate an agent to make health care decisions for you, as well as state your wishes regarding issues like artificial life support, pain relief, and hospice care. The Advance Health Care Directive can be very important in case you are not mentally or physically able to communicate your wishes, or are simply too overwhelmed. Without such a document, a medical facility or doctor may not allow a spouse or close family member to make decisions on your behalf. So, if you have filled out one of these directives, you should give a copy to your doctor as well as your agent, and alternate agents.
If you don’t take the time to plan, while your are able, the consequences to you and your loved ones could be unfortunate. You may be powerless to get your property to those you wish to have it, or need court intervention in the form of a conservatorship to assure the management of your finances, or have your end of life and health care decisions made by medical personnel instead of someone you chose who will honor your wishes. Failure to plan can make tough financial and emotional times even tougher. Failure to completely understand your choices and their consequences can allow family, friends, and profit-minded professionals to take undue advantage of you at a time when you are most vulnerable. Waiting too long can leave you no choice at all. You don’t need to panic. You just need to take the time now to plan for the future inevitabilities and possibilities.