Busy Wills Blog

Archive for April, 2011

Busy Wills, Inc. specializes in creating estate plans which enable families to continue to thrive through crises.  Please visit busywills.com for a convenient, affordable way to prepare a specifically tailored emergency plan for your loved ones. 

Very often, people do not grasp the importance of estate planning until they have children. It is absolutely vital to have a plan in place in case of death or incapacity to direct who your children will live with in your absence.  Without a plan, your children have a high chance of ending up in the foster care system, in the event you are unable to look after them. 

 What happens to your children if you have no emergency plan in place and you are the victim of a car accident or other unexpected crisis?

The first people to deal with your children will be emergency services, generally the police.  The police are not equipped to keep your children overnight at the police station.  Unless apparently suitable caregivers show up, with convincing evidence that these children should be released to their care, the police have little choice but to hand the children over to Children’s Services.  The longer it takes for your chosen guardians to prove who they are and that they are appropriate caregivers, the longer your children will remain within the County system.   Particularly, if you would like non-relatives to care for your children in the event of your incapacity or death, your nominated guardians will need legally appropriate documents.

In the absence of an estate plan, the children will be taking their chances with the foster care system.  This not a desirable outcome.  The statistics for children entering foster care are grave and alarming ( for example, http://www.familiesforchildren.org/statistics.htm )

An estate plan provides the individuals you choose with the correct tools to protect your children.  With no estate plan, the court will, after what will seem to your children like extensive delays, appoint the nearest willing and apparently suitable relative to care for your children.  The court necessarily has a broad definition of what “suitable” means, and has little time or resources for thorough investigation.  If you deem the most suitable people to look after your children to be friends or neighbors, without a properly executed will or nomination of guardian, you are out of luck.  If no such relative can be found, your children will remain in the foster care system.

Creating an estate plan is a process of preparing ahead of time for this type of event.  It will allow you to give considered thought to who would be the best person to care for your children if you are unable to do so.  It gives you the chance to have a detailed discussion with that potential caregiver to find out how willing he or she is to take on the role.  You will also provide that person with a copy of the appropriate document.  In your car, home and office, it’s advisable to keep their name and telephone number so that emergency services can contact the right person, who can swiftly rescue your children.  You need to think about where to keep the original documents so that they can be found by the responsible adults who will be on the scene.

Of course, if you have a co-parent, almost invariably your children will be placed in that person’s custody.  However, one of the very few distinct disadvantages of having parents who are together as a couple is the far higher incidence of both parents dying or being incapacitated by the same car crash.  Divorced or separate parents are rarely the victims of the same car crash.

Being a parent means developing a strategy to ease your children’s paths through unpleasant situations.  Just as parents battle to get their children into good schools and carefully select everything from pediatricians to playmates, so parents need to face up to the most unpleasant of eventualities to ensure their children the best chance of thriving through tragedy.

Please visit busywills.com for more information.

At Busy Wills, Inc., attorney Elizabeth Botsford LLM Tax (Hons) is always mindful that you are busy.  Access valuable advice, for an affordable fixed price.  Protect your loved ones with an estate plan designed for your unique circumstances.  Live every day as though it’s your last.  Your loved ones will be glad you did.

© 2011 Busy Wills, Inc. All Rights Reserved

Attorney Advertising: This article has been prepared for general informational purposes only and is not intended as legal advice.

Busy Wills, Inc. drafts powers of attorney catering to the specific issues faced by you and your loved ones.  Please visit busywills.com for more information.

Powers of attorney provide the authority to act on another’s behalf.  The person given the authority to legally bind another is called the agent.  The person giving the authority, who will be bound by the agent’s actions on his or her behalf, is called the principal.  Like marriage, powers of attorney should not be entered into lightly or as a misguided romantic gesture.  A power of attorney is an extremely powerful document which enables the agent to legally bind the principal without consulting the principal first.  The principal needs to have absolute trust in the agent – both in terms of honesty and judgment.  Before executing a power of attorney, clearly articulate what is the advantage to you of giving someone your power of attorney.  Provide the narrowest possible range of powers advisable in the circumstances.

Powers of attorney come in several flavors which are called various names.  Here is some commonly used terminology :

1. A non-durable general power of attorney provides authority for someone to sign legal documents on your behalf, such as property deeds or managing insurance or tax issues.  It is immediately effective on being executed.  However, this non-durable power of attorney does not remain effective if you become incapacitated and are unable to make decisions for yourself – which is obviously exactly when a power of attorney might become most useful.  Only a highly unusual situation would warrant the execution of a non-durable general power of attorney. 
2. A limited power of attorney provides the authority to sign on another’s behalf for a specific situation – for example if you are out of the country and your property is being refinanced, you may want to provide your significant other with a limited power of attorney so that the papers can be signed in your absence.
3. A durable power of attorney is effective immediately on execution and remains effective even in the event of your incapacity.  Again, this enables the agent to make decisions for you when you are unable to do so.  If someone is diagnosed as having Alzheimer’s but still has legal capacity, it may make sense to enter into a durable power of attorney so that the principal’s finances and living situation can be managed seamlessly as the disease advances.   It might be that handing over management immediately will make the job of dealing with an advancing disease easier for both principal and agent.  Even without an actual diagnosis, some seniors simply do not want to continue the bother of managing their own affairs, what they may see as the family money, and feel it is time for the next generation to step up to the responsibility.  This can work for principals who entirely trust one or more of their children to make decisions for them
4. A springing power of attorney “springs” into effect on the occurrence of one or more specified events.  For example, if you become incapacitated and are unable to make decisions for yourself, a springing power of attorney, which may have been signed some time ago and would not have provided any powers until now, would “spring” into effect, providing the agent with the authority to manage the principal’s affairs.  The power of attorney can be drafted to “spring” into effect on the occurrence of any number of events.  For example, many springing powers of attorney state that the power will become effective when the principal is found by two physicians to be incapacitated.  That would often be a more efficient requirement than, for example, requiring a court order.  If you are in a committed relationship, particularly one with intermingled properties, one example of when a springing power of attorney can be helpful is in the aftermath of a car crash which leaves you unable to manage your affairs either temporarily or in the long-term.  Even if you are married, it can help to have executed a power of attorney so that there is an explicit expression of your intention for your spouse to deal with any separate property in the event you are unable to do so.  A spouse has limited ability to deal with even jointly owned property, let alone separate property, in the event of the other spouse’s incapacity (for example, it is permitted to pay bills from a jointly owned bank account).    However, when one spouse is incapacitated, it may be necessary to downsize because of diminished earning capacity or it may be easier to transition to a property with fewer stairs if there is also physical incapacity.  In the absence of a durable power of attorney, one spouse may not sell jointly owned property without court proceedings.  Again, though, executing any power of attorney can have far reaching consequences and requires absolute trust between principal and agent.
5. Another category of powers of attorney are medical powers of attorney.  Above, we have considered mainly financial powers of attorney.  Medical powers of attorney are directed at the decisions doctors make in treating patients who are unable to express their own wishes.  Medical powers of attorney will be the subject of a future blog post.

Please visit busywills.com for more information.