Friday, November 17, 2017

Making Choices 2.0

Since relaunching the blog, much of our focus has been on ability for an individual (the Principal) to choose other people (the Designees) to have the ability to make decisions in the event that the Principal becomes incapacitated. For almost every client this gives rise to the question, "who should I choose?" As with all of the decision-making aspects of estate planning, the answer to that question lies with the person who is creating the plan. As advisors and counselors, we can provide some insight into that decision, but ultimately it is one that must be made by the client.
Many of our clients struggle with choosing a single individual to name as a Designee, sometimes out of concern that the responsibility will create too heavy a burden for one person to handle. The good news in these circumstances is it is possible to appoint multiple Designees to work together to serve in any given role. This means that two or more people may be named to work together, either by unanimous consent, by majority rule, or each acting independently, in order to manage the responsibilities of serving under a Power of Attorney, Will, or Trust. While naming multiple Designees is always an option, it may not be the most efficient way of managing affairs, as naming multiple Designees normally requires those individuals to work together to achieve results. Further, with respect Designees named to make medical decisions under a Patient Advocate Designation, we generally recommend that our clients name a single person to serve as the Patient Advocate at any given time, in order to avoid creating a situation where multiple Designees cannot agree on a course of medical treatment, so doctors require that the Probate Court name a Guardian to remove uncertainty. The goal of implementing a Patient Advocate Designation seeks to avoid the Probate Court, not create a situation that requires it.
We make clients aware that they have the freedom to name anyone they desire to serve as a Designee, but all too often clients delay estate planning decisions due to concerns about their Designees. A common worry is someone who is not named will feel disappointment or even anger because of their omission. In those circumstances we find it helpful to remind our clients it is in their own best interest to choose the people that they believe have the capacity to fulfill the responsibilities of the role, especially as it pertains to them. If that means that a single child is named as the primary Designee in all of the documents because the child is more responsible, so be it, because that child has the ability to manage the responsibility. If the person named as the Designee in the Power of Attorney for making legal and financial decisions is different from the Designee in the Patient Advocate Designation for making medical decisions, that too is acceptable because the goal of naming Designees is to have the people best equipped make decisions making those decisions. Ultimately it is important to consider the consequences of naming someone less capable simply to avoid hurt feelings. Under those circumstances most people are able to trust their instincts, name the individuals who will do the best job and have enough peace of mind to set aside the worry that someone not named will be offended.
The bottom line in all of this is that the Designees named in an estate plan are essential to the success of that plan. While it is possible to name multiple individuals to work together, that is not always the most efficient way to administer a plan. The success of the plan is the result of naming the best people for the job. These decisions are not always easy and every planning situation is unique, which is one reason why it is especially useful to work with an attorney experienced in estate planning. That attorney should take the time to assist and guide you through the process of choosing Designees that meet the standard.

Matt and Al

Wednesday, November 15, 2017

Estate Planning Impact During Life 2.0

In our previous blog, we began unravelling the mystery that is Estate Planning by focusing on what happens when a person dies without a Will. Today’s blog focuses on how an Estate Plan can help avoid problems and complications during lifetime. While planning for an orderly transition at death is a major component of Estate Planning, a person is more likely to become disabled due to injury or illness rather than die, and planning can be critically important for these situations. Today’s blog discusses the “here” component of Estate Planning when someone becomes disabled but does not die.
When we discuss the “here” of Estate Planning we are talking about Powers of Attorney and Patient Advocate Designations that allow a person to designate who will have control of their lives in the event they are unable to control their lives. Each of these documents serves a different role, so it is important to understand what each does, when they work, and who should be named to handle the decision making responsibility. As you continue reading, keep in mind the person who signs and has these documents is known as the Principal and the person named to act on the Principal’s behalf is the Designee.
The Durable Power of Attorney is the document that gives the Designee the authority to make legal and/or financial decisions on behalf of the Principal. While Powers of Attorney can cover a wide variety of circumstances and specific powers, a Durable Power of Attorney for Estate Planning purposes gives much broader authority to make decisions on behalf of the Principal. The word “Durable” in relation to a Power of Attorney means the document is intended to be legally effective even if the Principal becomes incapacitated. Including a Durable Power of Attorney in your Estate Plan provides a tool to loved ones, allowing them a broad spectrum of powers, including, but not limited to, the ability to continue to pay bills, run a business, and even file lawsuits in the event that the Principal become incapacitated.
In the absence of a Durable Power of Attorney, a person wanting to make legal decisions on your behalf must file a Conservatorship Petition in the Probate Court. In addition to dealing with Estate Administration, the Probate Court is responsible for reviewing these petitions, appointing, and supervising those people named to make decisions on behalf of others in the absences of a Power of Attorney. The Probate Court process can be cumbersome and will include multiple hearings, documents, and meetings with attorneys. While it is important that this process exists to assist those who fail to plan, having a Durable Power of Attorney avoids these delays and additional stresses in what is likely already a very stressful time.
The Patient Advocate Designation is similar to a Power of Attorney (and is sometimes called a Medical Power of Attorney or Appointment of Healthcare Surrogate) but this document allows a Designee to make medical decisions on behalf of the Principal in the event the Principal does not have the capacity to make them. A well drafted Patient Advocate Designation grants the authority for the Designee to make a wide variety of decisions, including treatment options in emergency situations and long-term medical decisions such as recovery/rehabilitation alternatives. In the most extreme circumstances, a Patient Advocate Designation also allows the Designee to make decisions regarding end of life care, the so called “pull the plug” decision. These are important and serious powers to grant to another person, which is why we also include a Living Will as part of our Estate Plans. The Living Will (sometimes called an Advanced Medical Directive) articulates a Principal’s desires regarding their care, allowing them to communicate those wishes to their Patient Advocate, even when the Principal is unable to speak.
As the Conservatorship is the Probate Court equivalent of a Power of Attorney, a Guardianship is the Probate Court equivalent of a Patient Advocate Designation. This Probate Court process can determine who has the power to make medical decisions in the event another person cannot make their own decisions, but it is still a much more time consuming and stressful situation, requiring multiple meetings and hearings before decisions can be made. A Patient Advocate Designation ensures that the person you want making decisions about your care can make them promptly without waiting for the Probate Court to weigh in on the matter and select a person the Principal might not otherwise selected.
The Durable Power of Attorney and Patient Advocate Designation are important aspects of the Estate Plan. Choosing a Designee, and a successor Designee if necessary, is an important decision and we strongly recommend that the people chosen to be named in these documents be the people who our clients feel are the most likely to make the decisions that the client would want made. While it is true that many clients worry if children (or parents) will be hurt or offended if they are omitted, but we feel it is better to name those people you feel are able to handle the responsibilities than to include someone who cannot or will not make the decisions that are best for you.
As with much of what we write about, there is a great deal more to this topic. While we strive to provide you with good information, it is important to remember to consult with an attorney experienced in Estate Planning before taking any action in order to avoid potentially expensive mistakes.
Matt and Al