Phone: (832) 408-0505

Gratia Schoemakers

Financial POA

How to Choose a Guardian for Yourself

By

Every day we make hundreds of decisions from what to eat for breakfast to where we go on vacation.  With each passing day, there are more choices to be made.  But, what will happen if you can’t make decisions for yourself?  Before that time comes, there is one important decision you need to make.  Who do you want to serve as your guardian?

Choosing a Guardian

For those of you who have had your estate planning recently done or reviewed, you probably discussed and executed a Financial Power of Attorney.  For those of you on the fence about having your estate planning completed, this is another valuable reason why it is so crucial.  With this document, you are authorizing someone to handle your financial affairs (sign checks in your name, open up a bank account, enter into contracts on your behalf, etc.).  This can be very beneficial because if you are no longer able to do these things for yourself, someone else can immediately step in and do them for you.  However, you may run into situations in which third parties are going to want the person to have more authority than just a signed Financial Power of Attorney.  In these cases, they are going to require you have a Guardian appointed.

A Guardian is essentially a court-appointed and court-“controlled” agent.  They have the court’s authority to handle your financial affairs on your behalf if you cannot.  In many jurisdictions, the court will give priority to an individual who has been named as agent under a Financial Power of Attorney, making it incredibly important that you have one prepared.  If you do not have one, each state will have a law that lists the order in which people are appointed.  In some cases, you could end up having someone handling your affairs that you would have never wanted, like an estranged parent or sibling.  A financial power of attorney lets you share your wishes with the court.

To ensure that you are taken care of when you can no longer take care of yourself, it is important that you choose the right person.  When analyzing the pool of candidates, consider the following questions:

  • Does he or she have the time to act as your guardian?  Often times, those individuals who are the most organized and knowledgeable to help out are also the most heavily scheduled individuals and may not be able to step in.
  • Does he or she live close by?  Even in our digital world, some issues may take multiple steps or in-person interactions to resolve.  If the individual you are looking to appoint lives far away, he or she may not be able to fully carry out their duties.
  • Does he or she have the skill set needed?  When acting as a Guardian, it is crucial that the individual is organized, thorough, and can communicate clearly.  A person who is scattered or flies off the handle easily is not going to be a good advocate for you.

While we all want to retain as much autonomy as possible, there may come a time when we need someone to act for us.  Selecting the right individual will ensure that you are taken care according to your wishes.  If you have any questions or would like to discuss who you should appoint for this role, call or contact us.  We’re here to help.

How to Pick a Trustee, Executor, and Agent Under a Power of Attorney

By

While the term fiduciary is a legal term with a rich history, it very generally means someone who is legally obligated to act in another person’s best interests.  Trustees, executors, and agents are all examples of fiduciaries.  When you pick trustees, executors, and agents in your estate plan, you’re picking one or more people to make decisions in your and your beneficiaries’ best interests and in accordance with the instructions you leave.  Luckily, understanding the basics of what each of these terms means and what to consider when making your choices can make your estate plan work far better.

duck and hatchlings

Trustee

A revocable living trust is often the center of a well-designed estate plan because it is simply the best strategy for achieving most individuals’ goals.  In many revocable living trusts, you will serve as the initial trustee and will continue to manage the trust assets as you had in the past.  Your successor trustee will be responsible for making sure your wealth is passed on and managed in accordance with your wishes after your death or during your incapacity.  Like each of the following individuals involved in your estate planning, it’s best to have a trusted person or financial institution carry out this vitally important role.

It’s important to make the language in your trust as clear as possible so that your trustee knows exactly how to handle various situations that can arise is asset distribution.  Lastly, your trustee will only control the assets contained within the trust — not the rest of your estate, the reason why completely funding your living trust is crucial.

Powers of Attorney

Your power of attorney is the document in your estate plan that appoints individuals to make decisions on your behalf if you become unable to do so yourself.  There are a few different types of powers of attorney, each with their own specific provisions.  There is quite a wide range of situations covered by various powers of attorney, and we can help you decide which types you’ll need based on your current situation and future goals.  Here are two common types to cover in your estate plan:

Financial Powers of Attorney

Financial powers of attorney grant individuals the ability to take financial actions on your behalf such as purchasing life insurance or withdrawing money from your accounts to cover your expenses.  A person who acts under the authority given in a power of attorney is generally called an agent.  Regarding financial decisions, an institution like a trust company, can also be named.  Keep in mind that trust companies will charge a fee for this service.

Health Care Powers of Attorney

Health care powers of attorney cover a wide range of specific actions that can be taken regarding an individual’s medical needs such as making decisions about the types of care you receive or who will be providing the care.

Executor

Your executor is the person who will see your assets through probate, if necessary, and carry out your wishes based on your last will and testament.  Depending on your preferences, this may be the same person or institution as your trustee.  You might also see this position designated as personal representative, but it means the same thing.

Some individuals chose to go with a paid executor.  This is usually someone who doesn’t stand to gain anything from your will, and is often the best choice if your estate is large and will be divided among many beneficiaries.  Of course, family or friends can also serve, but it’s important to consider the amount of work involved before placing this burden on your family or friends.

Being an executor can be hard work and may have court-ordered deadlines, so it’s crucial to pick someone you know will be up for the job.  They will probably need to hire a CPA to help sort out your taxes and a lawyer to assist in the process.  Of course, if there’s a dispute, attorneys, appraisers, mediators, or other professionals will undoubtedly need to be involved.  Choosing a spouse or someone else intimately involved in your life can be convenient because they may already be familiar with your assets and have an easier time making sure your wishes are carried out.  However, because of the time involved and the nature of some assets, they may not be up to the task at the time.

Get in touch with us today

Let us help you make the process of picking your trustee, powers of attorney, and executor as smooth and headache-free as possible.  Once you have these choices in place, you’ll be able to rest easy knowing that your estate plan is in good hands no matter what life brings.  Call or contact us to make an appointment today.

Legal Considerations When Getting Your New College Student Ready to Go

By

If you are preparing to send your son or daughter off to college to pursue higher education, you may be wondering how their first semester of school will go.  During this exciting new chapter in your family’s life, the last thing you may be thinking about is estate planning for your college-aged child.  While your child may not have any assets (yet), once he or she turns 18, your child is considered an adult in the eyes of the law.  Before your kids go away, have a frank conversation with them about how much information — including grades, finances, health records — you will be able to access.graduation

Basic, Yet Crucial, Estate Planning Documents

Before your child is college bound, you should consider completing the following basic estate planning documents:

Healthcare Directive with HIPAA Authorization — While most parents assume when their child is away to college and is in need of medical attention (including mental health care) they will be immediately contacted and will have full rights to make decisions, this is simply not the case.  Once your child becomes 18 years of age, he or she is protected by HIPAA laws.  This means health care professionals cannot provide medical information without your child’s signed consent, even though your child may still be on your health insurance.  If there is no signed HIPAA release at the time, then you may need a court order to be able to access your child’s health information.  A Healthcare Directive appoints you as an agent that is able to make medical decisions on behalf of your child in the event he or she becomes ill or incapacitated.

Of note, each university or college may have its own form of medical release documents as well.  While these is no substitute for a Healthcare Directive, signing the school’s documents in advance will likely speed up the process in assisting your child in his or her healthcare needs.

Power of Attorney – similar to a healthcare directive, a durable power of attorney appoints an agent to make financial decisions on behalf of the individual.  This can allow you to have access to your child’s finances including bank accounts, scholarship funds, rental agreements, and insurance matters to name a few.

Prepare Ahead of Time

Many parents are actively involved in their college-aged children’s care and responsibility.  Nonetheless, turning 18 changes the legal landscape when it comes to your rights to address your child’s needs.  Preparing a legal plan for your college student ahead of time will greatly reduce any legal hurdles you may face as a family while he or she is attending college.  Before sending your child off to college, give us a call so we can help you craft a plan that protects your most valuable asset – your children.

Call or contact us today, we are here to help.

Not Just Death and Taxes: 5 Essential Legal Documents You Need for Incapacity Planning

By

Comprehensive estate planning is more than your legacy after death, avoiding probate, and saving on taxes.  Good estate planning includes a plan in place to manage your affairs if you become incapacitated during your life and can no longer make decisions for yourself.

What happens without an incapacity plan?

Without a comprehensive incapacity plan in place, your family will have to go to court to get a judge to appoint a guardian or conservator to take control of your assets and health care decisions.  This guardian or conservator will make all personal and medical decisions on your behalf as part of a court-supervised guardianship or conservatorship.  Until you regain capacity or die, you and your loved ones will be faced with an expensive and time-consuming guardianship or conservatorship proceeding.  There are two dimensions to decision making that need to be considered: financial decisions and healthcare decisions.

Finances during incapacity

If you are incapacitated, you are legally unable to make financial, investment, or tax decisions for yourself.  Of course, bills still need to be paid, tax returns still need to be filed, and investments still need to be managed.

Healthcare during incapacity

If you become legally incapacitated, you won’t be able to make healthcare decisions for yourself.  Because of patient privacy laws, your loved ones may even be denied access to medical information during a crisis and end up in court fighting over what medical treatment you should, or should not, receive (like Terri Schiavo’s husband and parents did, for 15 years).

You must have these five essential legal documents in place before becoming incapacitated so that your family is empowered to make decisions for you:

  1. Financial power of attorney: This legal document gives your agent the authority to pay bills, make financial decisions, manage investments, file tax returns, mortgage and sell real estate, and address other financial matters that are described in the document.

    Financial Powers of Attorney come in two forms: “durable” and “springing.”  A durable power of attorney goes into effect as soon as it is signed, while a springing power of attorney only goes into effect after you have been declared mentally incapacitated.  There are advantages and disadvantages to each type, and we can help you decide which is best for your situation.

  2. Revocable living trust: This legal document has three parties to it: the person who creates the trust (you might see this written as “trustmaker,” “grantor,” or “settlor” — they all mean the same thing); the person who legally owns and manages the assets transferred into the trust (the “trustee”); and the person who benefits from the assets transferred into the trust (the “beneficiary”).  In the typical situation, you will be the trustmaker, the trustee, and the beneficiary of your own revocable living trust.  But if you ever become incapacitated, your designated successor trustee will step in to manage the trust assets for your benefit.  Since the trust controls how your property is used, you can specify how your assets are to be used if you become incapacitated (for example, you can authorize the trustee to continue to make gifts or pay tuition for your grandchildren).
  3. Medical power of attorney: This legal document, also called a medical or health care proxy, gives your agent the authority to make healthcare decisions if you become incapacitated.
  4. Living will: This legal document shares your wishes regarding end of life care if you become incapacitated.  Although a living will isn’t necessarily enforceable in all states, it can provide meaningful information about your desires even if it isn’t strictly enforceable.
  5. HIPAA authorization: This legal document gives your doctor authority to disclose medical information to an agent selected by you.  This is important because health privacy laws may make it very difficult for your agents or family to learn about your condition without this release.

Is your incapacity plan up to date?

Once you get all of these legal documents for your incapacity plan in place, you cannot simply stick them in a drawer and forget about them.  Instead, your incapacity plan must be reviewed and updated periodically and when certain life events occur such as moving to a new state or going through a divorce.  If you keep your incapacity plan up to date and make the documents available to your loved ones and trusted helpers, it should work the way you expect it to if needed.