Can a Transaction Occur Without a Power of Attorney?
Everyone Should Have a Power of Attorney in Place

Can a Transaction Occur Without a Power of Attorney?

An elderly married couple wished to sell their home, but they had a big problem. The notary public refused to notarize the wife’s signature, because she clearly did not understand the document she was being asked to sign. Because there was no power of attorney in place that could have authorized her husband to represent her, the transaction came to a halt.

This situation, as described in Lake Country News’ article “When one spouse becomes incapacitated,” is not an uncommon occurrence. The couple needed to petition the court for an order authorizing the transaction. When community property is concerned and one spouse is competent while the second is not, the competent spouse may ask the court for permission to conduct the transaction.

The request in California requires the following:

The incapacitated spouse must have an examination by a physician and a capacity evaluation form must be filed with the court. This is the same as a conservator proceeding.

The court must appoint a “guardian ad litem” to represent the incapacitated spouse’s interests. The person might be an adult child, or an attorney. That person must then file a written report with their recommendation to the court.

Next, the transaction must involve the couple’s community property. The order may affect additional separate property interests in the same transaction. If there is no community property, it is permissible for the well spouse to change some of the well spouse’s private property into community property to meet the requirements for community property.

The transactions must also be for one of several allowed purposes, including the best interests of the spouses or their estates, or for the care or support of either spouse.

In the example that starts this article, the purpose was to authorize the sale of their home, so they could move out of state to live with their children. Another example could be to transfer property, so an incapacitated spouse may become eligible for government benefits.

Finally, the notice of hearing and a copy of the petition must be served on all the incapacitated spouse’s children and grandchildren. Any of these individuals are permitted to object and could set the proceedings back months or even years.

How much easier would it be to simply meet with an estate planning attorney long before there are any health or mental capacity issues and have a power of attorney document created for each of the spouses?

Speak with an experienced estate planning attorney to have your estate plan, which includes the power of attorney document, and have all these important documents created before you need them.

Learn when you need a power of attorney.

Reference: Lake Country News (July 27, 2019) “When one spouse becomes incapacitated”

How Should Couples Begin the Estate Planning Process?
Estate Planning is for Everyone

How Should Couples Begin the Estate Planning Process?

About 17% of adults don’t think they need a will, believing that estate planning is only for the very wealthy. However, no matter how few assets it seems someone owns, completing a few important documents can make a huge difference in the future.

valuewalk.com’s recent article, “Couples: Here’s How To Start The Estate Planning Process” notes that although estate planning can seem overwhelming, taking inventory of assets is a terrific place to start.

Make a list of all your belongings of $100 or more in value, both inside and outside of the home. After that, think about how these assets should be divided among family, friends, churches or charities.

Drafting a will may be the most critical step in the estate planning process. A will serves as the directions for how assets are to be distributed, which can avoid unpleasant disputes.

A will can simplify the distribution of assets at your death, and it also provides instructions to your family and heirs.

A will can also set out directions for childcare, pet care, or any additional instructions or specifications.

Without a will in place, your assets will be distributed according to state law, rather than according to your wishes. Creating a will keeps the state from making decisions about how your estate is divvied up—decisions you may not have intended.

Once you have your assets and beneficiaries set, see an experienced estate planning attorney and have your will drafted immediately. Hey, life is unpredictable.

Another important part of the process is to have a discussion with everyone involved to prevent any legal or familial disputes regarding the estate.

Failure to start the estate planning process can lead to family fighting, misappropriated assets, court litigation and unneeded expenses. Get going!

Learn how having at least a will in place is critical.

Reference: valuewalk.com (July 22, 2019) “Couples: Here’s How To Start The Estate Planning Process”

Why You Need a Power of Attorney in Your Estate Plan
A Good Estate Plan Includes a Power of Attorney

Why You Need a Power of Attorney in Your Estate Plan

A power of attorney is an important legal document in your estate plan that allows a person, known as the principal, to designate a person of their choice to become their agent, acting on their behalf. This is usually done when the principal is unable to manage their financial affairs due to disability, illness or incapacity. It must be done while the principal is still competent, notes Delco Times in the article “What’s the difference between guardianship and power of attorney?” There are also instances when power of attorney is used when the principal is unable to conduct their own affairs, because they are traveling or are deployed overseas. A good estate plan includes more than just a will. A power of attorney is an important part.

Related documents are the health care power of attorney and the durable power of attorney. A durable financial power of attorney is a document where the principal designates the powers that the agent may exercise over their finances. The powers granted by this document can be used by the agent, regardless of the principal’s capacity or disability.

The principal has the option to grant very broad authority to their agent. For instance, the principal could give their agent the authority to gift all their assets, while they are still living. That’s why it is very important for the specific provisions in the power of attorney to be carefully reviewed and tailored to the principal’s wishes. There are risks in naming an agent, since they are able to exercise complete control over the principal’s assets. The agent must be 100% trustworthy.

A health care power of attorney allows an agent to make decisions about the principal’s health. Note that this document is operative only when a copy is provided to the attending physician, and the physician determines that the principal is incompetent.

Both health care power of attorney and financial power of attorney may be revoked by the principal at any time and for any reason.

If the principal has not had these documents prepared in advance and then becomes incompetent by reason of injury, illness, or mental health issues, they may not have the legal right to sign the power of attorney. When this happens, it is necessary for a guardianship proceeding to occur, so that other people may be named to take charge of the person’s financial and health affairs. Advance planning is always preferred.

If an individual is born with a disability that impacts their capacity and upon attaining legal age, does not have the capacity to sign a power of attorney, then a guardianship proceeding will be necessary. The court must determine if the person is truly incapacitated and if there might be an alternative to appointing a guardian. Once the guardian is appointed, the principal no longer has the legal right to make decisions on their own behalf.

A guardianship is a much more restrictive tool than a power of attorney. For one thing, the power of attorney generally does not need the involvement of the court. There is always the possibility that a guardian is appointed who does not know the family or the individual. A durable power of attorney allows a person to appoint someone they know and trust to help them and their family, if and when they become incapacitated.

Speak with your estate planning attorney about how power of attorney works, and when guardianship issues might arise. Being prepared in advance by having the right documents in place, is always better than having the family going to court and hoping that the right decisions are made.

See how a durable power of attorney is a critical piece of a good estate plan.

Reference: Delco Times (May 8, 2019) “What’s the difference between guardianship and power of attorney?”