Lest I be accused of engaging in the unauthorized practice of law (which makes attorneys a bit testy), this article must necessarily be prefaced by the disclaimer that the author is not an attorney and should not be construed as legal advice. That said, it’s advice you can’t afford to ignore.
Although not an attorney, I have been appointed as legal guardian and conservator for numerous individuals over the years who had consulted an attorney, done estate planning, and still ended up in costly, intrusive court-ordered guardianships despite their efforts to prevent precisely that outcome. There are some common mistakes that landed these wards in probate court. We can all learn from their mistakes. So the attorneys reading this can all relax — my advice is that you need a power of attorney (POA) and you need a qualified estate planning attorney to draft it for you now — to save on exorbitant legal fees later. Don’t try to do it yourself.
First and foremost, and this might seem like I’m auditioning to play the next Captain Obvious, but it simply can’t be overstated: Do not nominate someone to act as your agent under a POA whom you can’t trust. While that might seem to fall into the “duh” category, you’d be amazed as how many people name a relative or friend they don’t really, truly trust because they think they have no other options. You do have other options. You can hire a professional. But what? That will cost money? Sure. A whole lot less money than it will cost to have your business made a matter of public record and the court being put in charge of your private affairs.
Now that you’ve appointed someone you trust, don’t wait to establish your agent under power of attorney on all of your accounts at your bank and brokerage firm. But you’re not incapacitated yet, you say. You don’t want to give someone power right now, because you’re still fully capable of managing your own affairs. Please go back and read the previous paragraph. We’ll wait …
… Ok, so you’ve appointed someone you trust. Right? Right.
You’ve heard that cliche, “life is what happens while you make other plans”. Nobody knows the moment they will lose the ability to manage their own affairs. You did the planning and put someone you trust in line to take over when you need them. Don’t wait. The time is now, not later, to go with them to the bank and set them up on all of the accounts you will need them to manage when you aren’t able to do so any longer. Many banks have their own internal policies that may or may not be consistent with state law. For example, while Arizona law has no expiration date on powers of attorney, the probate court is nevertheless full of conservatorship cases in which the ward executed valid estate planning documents, but their financial institution refused to honor the powers of attorney because they were drafted more than six months ago. Six months. Let that sink in for a moment. Most people do estate planning never imagining that they will need an agent to take over in less than six months. Do add your agent to your accounts immediately, or at any rate no longer than six months from the date the documents were drafted.
The other benefit of going to the bank immediately with your newly drafted POA is that you will discover all of the accounts for which your POA is not sufficient. Wait … what? You thought your POA covered everything? Nope. Financial institutions, especially large national banks and brokerage firms, often have quirky rules that say that an agent under POA can’t do this or that or the other thing. So you want to find out right now, while you still have the capacity, what else you need to do – or have your attorney do – in order to empower your agent when the need arises. Once you need the POA to kick in, it is likely that you will no longer have testamentary capacity to have your attorney draft additional documents and directives and guess what that means? You’re going to probate court. On your dime. The very thing you drafted that pretty little estate planning package printed on fancy bond paper to avoid.
(As an aside, if your POA is just an ancillary document in a trust package prepared by your attorney, please, PLEASE … Do fund the trust. If you don’t know what that means, ask your attorney. He or she likely gave you detailed instructions on how to do that when the trust was signed. If not, get a new attorney. If so, and you didn’t do it … why on earth did you pay your hard earned money to an attorney only to ignore the advice he or she gave you? More on this in a future post…)
So we’ve covered a couple of basics regarding the financial power of attorney. But your estate planning package also should contain a medical power of attorney, a mental health power of attorney, advance directives, and funeral directives. They don’t? Do hire a new attorney (or go back and do follow your attorney’s original advice and get the rest of the documents drafted and signed).
Don’t put your advance directives in the same document as the medical power of attorney. You might need to replace the agent at some point, or (in spite of your plans) the court may need to replace the agent with a guardian. You don’t want your doctors to be confused. Just because a court has to appoint a guardian because your agent predeceased you, became incapacitated, or turned out to be an untrustworthy snake doesn’t mean your wishes about medical treatment and end-of-life care has changed. By the time it’s apparent that your agent cannot act for you, you may no longer have testamentary capacity. You shouldn’t have to end up on life support that you never wanted just because your named medical agent didn’t work out for you. Do insist that your medical directives (“living will”) are in a completely separate document from the power of attorney. That way, if a future guardian has to revoke the POA, there is no confusion on the part of non-lawyers treating you that your living will is not also null and void.
Do draft a mental health power of attorney. Arizona law does not allow an agent under a regular medical POA to consent to your placement in certain mental health settings. You don’t think you’ll ever need mental health treatment? Of course you don’t. Almost nobody in mental health treatment thinks they need it. If you do not give your agent mental health power, the alternative is that when you need mental health treatment, it will be ordered by the court and become a matter of public record. You already named someone you can trust, so you can trust them to not commit you if you don’t actually need it. Besides, it’s very difficult to get placement in the kind of mental health treatment setting that would require specific mental health authority. Your agent will not be the only one making that decision. You will have to meet medical criteria for admission, which means a doctor and others will have to agree that you need to be there. Frankly, it’s sometimes very difficult to get inpatient mental health treatment for people who really do need it, so you run very little to no risk of being placed in this type of setting if it’s not necessary and in your best interest.
Do write out explicit funeral instructions. Don’t stop there. Do pre-needs planning. Pick out where you want your final arrangements to be made. Decide whether you want to be cremated or buried. Buy a pre-needs policy with a contract for services. Do ask the funeral home what they will need to have signed in order to carry out your wishes. Funeral homes, like almost everyone else these days, don’t want to get sued because one of your children insists you should not have been cremated while another one directed them to do so. I’ve had many challenges getting a person cremated even when they signed their own cremation directive with their attorney. Like the banks, funeral homes make up their own rules to protect themselves from perceived liability and their internal policies may or may not conform to the state laws your attorney relied on in drafting your legal documents. It’s best to find out while you’re alive what steps you need to take in order to ensure your wishes are carried out while you’re not alive.
Do talk to your medical agent about what treatments you want and don’t want for yourself when you are no longer able to direct said treatments. Your living will is a good guide, but there may be specifics and nuances that the legal documents don’t convey. If something is important to you, make sure your agent knows that. Example: I once met a man who told his son that, under no circumstances, was a TV to be droning on in the background if he was hospitalized and unable to communicate. His son always liked the TV on for “background noise” and (like me) he hated “background noise”. Those fine details are not usually covered in a living will … although they can be, which brings us to the next point:
Do be very explicit about the things that matter most to you. Your power of attorney document doesn’t need to be a one-page boilerplate form. It should be as unique as you are as a human being. If you have strong feelings about anything – from your property maintenance to your health care – do tell your attorney, do put it in writing, do make sure your agent understands your wishes, and do name an agent you can trust with your life. Trusting your agent with your life is, after all, what you’re appointing them to do in your power of attorney.
Oh, and in case we didn’t put a fine enough point on it: Do consult a qualified estate planning attorney to draft your various powers of attorney and other estate planning documents.