A little planning goes a long way in any crisis. The present coronavirus pandemic isn’t the only time when you may encounter an emergency in your life. Every day we deal with families who have unfortunately lost a loved one. It comes with the territory when you practice in the area of Trusts and wills.
There are some planning tools you can have ready for any future emergency.
Health Care Directives. This document allows you to name a designated agent to make medical decisions for you in the event you become incapacitated. You may think that your family members will be able to step in and make medical decisions for you, but that’s not always the case. And there could be times when you want to have a designated person (either family or friend) to have the ultimate say in your medical care. The health care directive allows you to do that.
Here is a link to an article published on the California Medical Association’s website that allows you to access the health care directive form in either English or Spanish. https://www.cmadocs.org/newsroom/news/view/ArticleId/28030/Updated-Advance-Health-Care-Directive-Kit-now-available
This suggested health care directive form published by the California Medical Association is a good form to use because it is widely recognized by health care providers throughout California.
Durable Power of Attorney for Assets. Now that you have your medical decisions covered, you need to think about who will manage your finances in the event you become incapacitated. The easiest tool to use for that purpose is a Durable Power of Attorney. Why durable? Most powers of attorney cease to operate when the person creating it (called the principal) becomes incapacitated. If the principal is incapacitated, then their agent cannot act either. Unless, that is, you have a durable power of attorney. The durable part means that it still operates even when the principal has become incapacitated.
Keep in mind that all powers of attorney, even durable ones, expire upon the principal’s death. So a power of attorney will not help you with post-death issues. But it does come in handy for temporary incapacity, such as when someone is in the hospital.
Revocable Trust. A Trust is even better than a Durable Power of Attorney because a Trust both allows for someone to manage your finances if you become incapacitated AND allows for management of your estate after your death. Unlike a power of attorney, a Trust lasts during incapacity and after the principal dies. It handles every situation.
The reason a Trust works better is that the named successor Trustee can step up and manage your affairs if you lose capacity. They also can continue managing the Trust after you pass away.
There’s just one catch. Your assets must be transferred into the Trust’s name. A Trust only operates over assets that are held, or titled, in the name of the Trust. So if you have a home, you need to record a new deed transferring title of your home into your Trust. It is not difficult to do, but it does take some homework. You have to take the right steps to ensure your Trust is ready to act when the time comes.
So those are the top three legal documents you should consider having in case of an emergency. It pays to be prepared for any future crisis that may come along.
For more information, contact us today.