Incapacity

It's not an if, it's a when.  We are all going to die someday.  However, when you do estate planning, you also plan for incapacity.  There is nothing that's easier than planning for incapacity if you are well.  There is nothing harder or more frustrating if a person has waited too long - because then you are stuck going to court and having to do a conservatorship. 

If I get a call from a family and they ask, what are we supposed to do?  Mom or Dad can't manage their affairs.  Well, the answer is simple.  Get a letter from their doctor that states that the individual is no longer able to manage his or her financial affairs.  Bingo, that's it, that's all you need.  With the power of attorney, you can manage assets, file tax returns, deal with Medicare, Social Security, modify trusts, transfer assets to trusts, even name beneficiaries to IRA's and life insurance policies.

The alternative - a conservatorship - is dreadful.  It is a sad situation on a number of levels, when you meet with someone who is already incapacitated, because now it is too late to do this relatively easy planning, and there is no other choice but to go to court and go through the humiliation and red tape that goes with a conservatorship, from the public declaration by a judge of a person's legal incompetence to the ongoing annual accountings.

Health care directives are basically pre-printed forms that authorize your family or friends to make medical decisions if you are unable to.  The basic areas of decision-making include organ donation, burial or cremation and life support decisions.

Self help works fine on the health care document, but is strongly discouraged for financial durable powers of attorney.  When dealing with large sums of money, a financial institution will generally want to see a lawyer's certificate attached to the document to show that the client has been properly counseled before dealing with an agent in lieu of a principal.