This information is taken from Chapter 2 of Kayce’s book “Check with Me Before You Check Out,” a common sense estate planning guide for your family.
Estate Plans may vary based on the needs of the clients. However, a basic estate plan or will package as termed at the Law Offices of Kayce C. Staehle, PLLC, consists of a Financial Power of Attorney, Healthcare power of attorney, Will and a Living Will. Let’s examine that first piece in more depth, because it’s an integral piece that’s often overlooked.
A Financial Power of Attorney is a key estate planning tool. It is a crucial piece of the estate plan as what is termed a “life document.” Life documents are documents that may ONLY be used during one’s lifetime and may be used frequently based on need. A consistent characteristic found in life documents is the consideration of incapacity.
Financial Powers of Attorney come in several formats. One is the Durable Power of Attorney. This instrument gives the identified person ability to assist the Grantor in numerous financial conditions, as selected by the Grantor without regard to incapacity.
This type of financial power of attorney is good for immediate use in situations where one may travel frequently or routinely need help, such as an elderly parent living with an adult child. However, caution should be given as to when this type of broad use is offered.
Another form of the Financial Power of Attorney is a Springing Power of Attorney. This is created for use at a future time; specifically this is conditioned upon incapacity. The nice feature of this instrument it that it is only used when really needed and may be considered a way to limit abuse.
By far, a Financial Power of Attorney could be one of your most important estate documents. Not only may it be used multiple times, but the implications of not having such a statement may require court action if a person becomes incompetent. Specifically, a guardianship action may be required to appoint a person to address your financial transactions. This involves delays, court fees and a bond to be paid by the appointed guardian to protect the interest of the incompetent.
This is a document that’s often overlooked by young adults. As they become adults, they consider their new found “freedom” without considering who would make decisions for them if they were unable.