Even with modern medicine and interventions, it is a real possibility that you or your spouse could become incapable of handling your own medical or financial affairs. A serious illness or sudden accident can happen at any age. Advancing age can bring senility, Alzheimer's disease or other ailments that affect your capacity to make sound decisions about your health. These can also impact the way you manage your finances, including your ability to pay bills, write checks, make deposits or sell assets.
If you were to become incapacitated without any documents appointing someone to act on your behalf, a Guardianship would then be needed for someone to intercede and make medical or financial decisions. With a guardianship, the Probate Court will appoint a guardian(s) on your behalf. This can be a very public, time-consuming and expensive process. However, planning ahead can eliminate the likelihood that you will need a guardianship. Once you identify individual(s) you trust with the authority to manage your affairs, an attorney can help prepare the necessary legal documents.
A Durable Power of Attorney (POA) for Health Care allows you to appoint a representative to make medical decisions for you if you cannot. You decide how much power your representative will have. They will also determine when to provide or withhold life-sustaining measures. You can direct your wishes within your POA for Health Care or create a Living Will. Along with your POA, a Living Will allows you to approve or decline certain types of medical care, even if you could die as a result of the choice.
If you feel you would not want to be resuscitated, you can create a Do Not Resuscitate order (DNR). A DNR is a doctor's order that tells all other medical personnel not to perform CPR if you go into cardiac arrest. There are two types of DNRs, including one that is effective only while hospitalized and the other to be used outside the hospital.
In order for someone to manage your financial responsibilities as well as protect your property, there are several options to utilize. First, you can transfer ownership of your property to a Revocable Living Trust. While you are living and competent, you are the trustee and retain complete control over your affairs. If you become incapacitated or upon your death, your successor trustee (the person you designate to administer your trust if you cannot) automatically steps in and takes over your property management. All of your assets should be owned by your trust, therefore your successor trustee can easily pay your bills and oversee your assets. You can appoint a Durable Power of Attorney for Property to handle any assets not in your trust.
A Durable Power of Attorney (DPOA) for Property allows you to authorize someone to act on your behalf regarding financial assets in your name. Your DPOA can manage all assets which are in your name alone (i.e. not in your trust or joint ownership). A DPOA for Property is a fairly simple and inexpensive option to implement. It is important to remember that your DPOA for Property will end at your death. At that time, your successor trustee or executor will need to act.
Another possible choice is to hold your property in concert with others. This arrangement may allow someone else to have immediate access to the property and use it to meet your needs. Joint Ownership is a straight-forward and economical alternative to execute. However, there are some disadvantages to a joint ownership arrangement. Examples include (1) your co-owner has immediate access to your property, (2) you lack the ability to control the use of the property for your benefit, (3) naming someone who is not your spouse as co-owner may trigger gift tax consequences, and (4) if you die before the joint owner, your property interests will pass to the co-owner without regard to your intentions, which may differ.
It is important to plan ahead and think about how you would want your medical care and finances managed if you were unable to handle them yourself. Schedule time with your attorney to determine documents needed to make your wishes known today, in the event someone else needs to make decisions for you in the future.