by Vance R. Parker JD, MBA | May 28, 2019
WTOB FM/AM Radio in Winston-Salem, NC interviews elder, special needs, and estate planning attorney Vance Parker as he explains how the new North Carolina Uniform Power of Attorney Act (enacted December 2018) may have made your existing financial power of attorney document deficient (or obsolete) for many later elder law, Medicaid planning, or asset protection needs.
Now-deficient powers of attorney, such as the once popular North Carolina Statutory Short Form Power of Attorney that many people still use today, can cause great problems when a person is later diagnosed with a dementia or becomes mentally impaired so that use of the financial power of attorney is needed to make critical financial, legal, Medicaid planning, or asset protection decisions. Such decisions may later be required in order to protect the senior’s home and other assets from Medicaid estate recovery, or from medical creditors. When the senior or disabled person’s financial power of attorney is deficient, key decisions that the agent must make to financially or legally protect the senior may now need to be first approved by the county Clerk of Superior Court, which can be an expensive, time consuming, and unpredictable process.
Adding an inexpensive financial power of attorney document containing detailed elder law powers (an Elder Law Power of Attorney) to one’s estate documents in the first place, while a person is still healthy to sign such documents, can prevent all of the problems caused by the new NC Power of Attorney Act. With an Elder Law Power of Attorney, the senior or disabled person’s agent will have all of the tools (if needed later) to legally protect the senior’s assets, so that critical Medicaid planning or asset protection decisions can be made quickly to save the senior’s home and assets for the senior, spouse, and family, without having to go to the county Clerk of Superior Court for permission first.
Vance talks with WTOB Radio every Tuesday at 4:38 pm, educating the public about elder and special needs law, and estate planning topics.
by Vance R. Parker JD, MBA | Apr 6, 2016
CATEGORIES: Elder Law, Elder Care Attorney, Estate Planning, Winston Salem, North Carolina, NC.
It’s common for aging parents to need some help with their business and legal affairs. Adult children frequently reach this conclusion at the beginning of a new year, after they have spent time with their parents over the holidays.
PROBLEMS WITH JOINT BANK ACCOUNTS
Many adult children choose to assist their parents by opening joint bank accounts with them. However, this is not the best option, because it can result in unwanted legal problems that can later become intractable. Joint accounts are normally set up with “survivorship” rights, so that if the parent dies, the remaining child on the account is legally entitled to the remaining assets. If that child has siblings, this child’s inheritance of the account assets outside the will may be in direct conflict with how the parent’s inheritance is divided in the parent’s will document.
Even if the parent does not have a will, N.C. laws of intestate succession, which govern inheritance for people without a will, may directly conflict with the adult child’s receipt of the remaining joint account proceeds following the parent’s death. Either problem may be difficult to fix, and can create unpleasant disagreements that lead formerly congenial family members to litigate against each other.
THE DURABLE POWER OF ATTORNEY
The best solution is to use a durable power of attorney (also called a financial power of attorney or a general power of attorney; durable POA in short) which offers the most economical and legally straightforward method to assist aging parents with their business and legal affairs.
HOW IT WORKS
The person who signs the durable POA document, called the principal, grants significant powers to an agent or agents, allowing them to manage the principal’s business and legal affairs. In order for this document to be legally valid, the principal must be mentally competent, or have “capacity” (the mental ability to comprehend both the nature and consequences of one’s acts) when he or she signs the document. Before the document may be used by the selected agent(s), it must be properly recorded in the appropriate county Register of Deeds office.
LIVE AT EXECUTION
It is a frequent misconception that durable POA documents are designed only to allow the agent to assist an aging parent following his or her incapacity (mental incompetence.) Most become “live” when the principal signs and executes the document. Thus, these documents allow the agent(s) to start helping the principal right away, without waiting for the principal’s incapacity. If used correctly, this type of durable POA provides the most flexibility to both parent and child.
BE CAREFUL IF YOU DO IT YOURSELF
Banks and other financial institutions are very familiar with durable POA documents and accept those that are properly and professionally prepared.
Beware of versions of durable POA documents available on the Internet. Legal fees to an estate planning attorney or elder law attorney for properly prepared, executed, and filed durable POA documents are normally very modest. Unless you are a legal professional, you can’t judge the quality of a form that you download from the Internet.
When a bank receives a POA document, it is carefully reviewed by the bank’s legal professionals, who will only accept a document that is proper in every way. If the bank rejects your Internet durable POA when your family needs it, and your parent is no longer competent, the family may then be forced to resort to a much more expensive and complicated guardianship proceeding before a family member is able to legally take care of the impaired parent’s business and legal affairs.
Estate planning attorneys and elder law attorneys normally try to screen out improper family members from serving as agents or “fiduciaries” on behalf of their clients. (For example, I have had to remove a family member addicted to hard street drugs from serving as a fiduciary for a client.) A durable POA becomes highly dangerous in the wrong hands–it can give away the principal’s keys to his entire financial portfolio. It is essential to keep the durable POA in the hands of only honest and proper agents.
AN ADDITIONAL ALTERNATIVE
Another alternative is to create revocable living trusts, with children serving as co-trustees with the parents. This type of estate planning is more expensive and complicated and should only be conducted with the assistance of an experienced estate planning or elder law attorney.
by Vance R. Parker JD, MBA | Jul 26, 2014
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Categories: Estate planning, elder law, Winston Salem, North Carolina, NC.
Estate Planning is not just for wealthy people with lots of assets. Individualized, professional estate planning may provide the following 10 benefits to anyone:
- Assures that your hard-won savings and assets will be passed down correctly to the loved ones that you designate, while shielding as many assets as possible from taxes, court costs, and unnecessary legal fees (Will, Trust, Living Trust)
- Provides for the care and well being of any loved ones left behind (Will, Trust)
- Allows you to choose a guardian to care for your children in your absence, and to choose a responsible adult to take care of their legal and business affairs (Will, Trust)
- Provides for family members with special needs without disrupting their government benefits (Will, Trust, Special Needs Trust)
- Provides for the transfer of your business at your retirement, disability, or death (Will, Trust, Business Succession Plan)
- Allows you to choose a trusted adult to make your medical decisions for you in case you become seriously ill (Durable Power of Attorney for Healthcare)
- Allows you to choose a trusted adult to take care of your legal and business affairs in case you become seriously ill (Durable Power of Attorney)
- Provides that physicians will share important information about your medical conditions with the individuals whom you have selected to make your health care, business, and legal decisions for you (HIPAA Document)
- Allows you to choose how you will be treated by healthcare facilities at the end of life, and what actions may or may not be taken to extend your life (Living Will)
- Allows you to designate how you want your body to be treated after you are gone, and what funeral or memorial arrangements you may or may not want (Will, Letter of Personal Instruction)
No adult should leave these essential rights and benefits to chance. Life is uncertain — the best time for estate planning is now.
Please contact us with any questions and to learn how we can help with your estate planning in Winston-Salem, North Carolina.
by Vance R. Parker JD, MBA | Jul 2, 2014
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Why every adult needs a living will and a health care power of attorney
Terri Schiavo collapsed in her St. Petersburg, Florida home after a massive heart attack on February 25, 1990. Because of a lack of oxygen, she suffered extensive brain damage and after two and one half months in a coma physicians ruled that she was nonresponsive and in a vegetative state.
Unfortunately, Ms. Schiavo had not previously conducted any formal estate planning and had neither a Health Care Power of Attorney nor a Living Will. Because her actual wishes were unclear, Ms. Schiavo was kept alive in a persistent vegetative state (PVS), while never improving, for 15 additional years despite formidable legal attempts by her husband to allow her to die a natural death.
Nightmare Government Involvement
For any citizen who cringes at the thought of government intervention into private life, this case remains an absolute nightmare. The courts eventually involved included all levels of the Florida courts up to the Florida Supreme Court and the Federal Appeals Courts, and they entertained challenges from a host of entities claiming to represent Terri’s interests, including the Florida legislature, Florida Governor Jeb Bush, various disability rights groups, the U.S. Congress, and President George Bush.
What exactly went wrong here?
Terri’s Husband, Michael Schiavo, who claimed that he knew that Terri would not want to live for an extended period in a persistent vegetative state, tried to serve as Terri’s sole legal representative determining Terri’s wishes. But because Terri had not executed a Health Care Power of Attorney formally giving Michael sole authority to make Terri’s health care decisions if she became incompetent, the courts ruled at various times that other parties, including Terri’s parents, could also represent Terri’s wishes. Indeed Terri’s parents maintained that their Catholic Church beliefs were also Terri’s beliefs, and that Terri would not want to violate the Church’s teachings against euthanasia (intentionally ending a life in order to relieve pain and suffering.)
Terri Schiavo still could have made her own wishes formally known in a way protected by the Florida courts if she would have executed a proper Living Will. Indeed, in 1990, the Florida Supreme Court had ruled in Guardianship of Estelle Browning that because elderly Estelle Browning had expressed in a Living Will her wish not to be kept alive by artificial means including a feeding tube, that Browning had “the constitutional right to choose or refuse medical treatment, and that right extends to all relevant decisions concerning one’s health.”
Good Lawyering Cannot Undo Bad Planning
Michael Schiavo hired the same noted Florida attorney who had argued the 1990 Guardianship of Estelle Browning case before the Florida Supreme Court, George Felos. Felos argued to a January, 2000 Pinellas (Florida) County Court that Terri Schiavo would not want to be kept alive artificially when her chance of recovery was miniscule. Felos won the initial case, but, even with the prior Browning decision, because Terri Schiavo had not executed a formal Living Will document expressing her actual wishes, Michael Schiavo’s attorneys could not successfully stave off the multitude of court challenges seeking to keep Terri Schiavo on life support for almost five more years.
Preventing Problems
The goal of all legal planning should be to prevent problems. Preventing problems is always less expensive than fighting a battle in court, and is much more predictable and much less harrowing for the client.
If, because of poor legal planning, one of the parents in a family is kept alive beyond her actual wishes, what would the cost of the additional medical expenses and additional legal bills do to a typical family? These costs could be devastating, and could quickly wipe out an estate as well as wipe out the plans that the parent intended.
North Carolina Recognizes the Living Will and the Health Care Power of Attorney
North Carolina law provides two methods for an adult to make his or her health care wishes known in advance–the Living Will and the Health Care Power of Attorney.
An adult may use a Living Will to communicate to her doctors that she does not want to be kept alive by extraordinary medical treatment or by artificial nutrition or hydration if she is terminally ill or in a persistent vegetative state. An adult may use a Health Care Power of Attorney to appoint someone to make his medical decisions if he is unable to make them himself. Because each of these documents has a different purpose, the best estate planning practices include both the Living Will and the Health Care Power of Attorney to be used in tandem. All North Carolina adults should utilize the Living Will and the Health Care Power of Attorney as part of a comprehensive estate planning process.
Please contact us with any questions and to learn how we can help with your estate planning in Winston-Salem, North Carolina.
