Power of Attorney: Planning for Incapacity

Older man in a wheelchair


A durable power of attorney for financial matters is an effective way to arrange the handling of your business and personal affairs if you become unable to do so.

Our ability to handle financial affairs can be diminished by degenerative diseases such as Alzheimer’s, dementia, or serious accidents. It can happen to the young or the elderly. We never know if or when tragedy might strike.

A durable power of attorney is a simple, inexpensive, and reliable way to arrange …

Duties of and Selection Criteria for the Attorney-in-Fact

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Duties of the Power of Attorney

A power of attorney gives a broad range of business and financial powers as specified in the document. Some typical powers in a very broad power of attorney might include powers to:

  • Do many personal business transactions or other acts that you could otherwise do
  • Sue in your name and collect money owed you from any source
  • Make gifts of real or personal property
  • Buy or sell property (of any type) owned in your

How to Hire and Work with an Attorney

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If you want to draft a will, create a trust, or prepare a power of attorney, you will need to work with an attorney. An attorney is the only professional licensed to write legal documents. Look for one who specializes in estate planning or elder law. Complex estates such as those with investments, real estate, and/or business assets may require consultation with family members and financial management, tax, and legal experts.

Finding an Attorney

  • Ask people you know if they

How Property is Titled

There are several ways you may own real and personal property. The way in which you own property will determine what part of it—if any—you may give away. Moreover, state law defines the types of ownership. If you own property (i.e., real estate) in another state, the laws of that state will apply. For personal property, the laws of the state in which you claim residency will apply.

Joint ownership is a popular way to leave property to loved ones; …

Advantages and Disadvantages of a Living Trust

Advantages:

  • Avoids probate but not necessarily estate taxes
  • Administers property in different states with one document
  • Manages business and personal affairs during your life
  • Manages assets if you become incapacitated
  • Depending on state law, may protect separate assets in case of divorce
  • Can pay medical and other bills and provide for scholarships
  • Distributes assets faster to beneficiaries
  • Provides privacy

Disadvantages:

  • Expensive to draft
  • Involves costs to update
  • Expenses can outweigh benefits
  • Not court-supervised
  • To protect assets, the trust must be

Elements of a Valid Will

Image of a gavel, signifying order, and a scale, signifying justice


Factors that must be present in a valid will vary from state to state, so it is wise to check your own state’s requirements. Certain elements are often necessary:

  • Legal age: You must meet your state’s age requirements to make a will. Some states have exceptions for married minors and parents.
  • Sound mind: You must know that you are making a will, how much property you have, and the names of the descendents or relatives who should share in your

A Trust: Who Needs One

Woman trying to make a decision, contemplating

Reasons for Having a Trust

A trust is a property arrangement whereby a trustee (such as a bank trust department or a person) takes care of, holds title to, and, in most cases, manages property for the benefit of someone else. Trusts are not for everyone but can fit the needs of certain people, including those whose estates approach or exceed the federal tax limit and those with young children or disabled family members who are unable to manage their …

Prepare Your Estate Plan Case Study 6

Contents


Case Study 6 – The dangers of making someone

A Will: Who Needs One

contract

A will is an estate-planning tool that serves as your set of instructions regarding who gets your property and resources when you die. At a minimum, everyone needs a simple will. It is the document that most people use for transferring their property, and it is often the choice of young families and of others whose situations involve neither complex tax planning nor resource management for incapacitated family members. After death, the will is settled through the probate process.

To …

Prepare Your Estate Plan Case Study 3

Contents


Case Study 3 – The disadvantages of writing your own will

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Eddie, age 70, decides to write his own …