Choosing the people who will handle your affairs while you are seriously ill, injured, or missing is a deeply personal decision. Additionally, each document that you may use in order to give people power over your person and your estate covers its own issues and may have its own fiduciaries. Understanding, creating, and reviewing your POAs (powers of attorney) will make sure that you are protected during your life without the need for Conservatorship proceedings.
A conservatorship proceeding is a probate process in which the court oversees your fiduciary(ies) as they manage you or your estate. While physicians often help make the determination about whether a POA is in effect with letters documenting your incapacity, in a conservatorship, a judge has to decide. In court, conservatorship is often seen as a fairly extreme remedy that robs the conservatee of the power to make decisions. As a result, the court requires a large amount of information, much of which is public, about the conservatee’s health and financial fitness. Depending on the severity of the situation, these disclosures may be extremely embarrassing if the conservatee regains the capacity to care for himself or herself.
The conservatorship process may be completely avoided through proper estate planning including naming agents for your healthcare and financial needs. A trust will allow your successor trustee to care for trust assets during periods of incapacity. However, for any assets left out of the trust through inadvertence or for other reasons, the Financial Power of Attorney (FPOA) is necessary to gain access. The person you designate as your agent in an FPOA may be the same as your trustee in order to provide seamless financial management. Like your trustee, the FPOA agent may only be allowed to act within the powers you assign that person in the document. In certain instances, it may be wise to give your agent specific powers, such as trust funding powers for assets that were accidentally left out of trust.
Often when an agent is necessary, the principal is also undergoing a health trauma, which may be temporary or ongoing. In either case, it is often helpful to have an agent specifically designated to make healthcare decisions. Through an Advance Healthcare Directive (AHCD), the agent will be aware in advance of your health preferences. Additionally, in conservatorships the most embarrassing statements are usually about one’s health. Depending on your situation, you may want your healthcare agent to be the same as your FPOA agent and trustee. However, you may also want the added protection of requiring the AHCD agent to ask a different person for money to pay for your health care needs .
Finally, using POAs appropriately can preserve your ability to qualify for Medi-Cal or VA Aid & Attendance Non Service Connected Disability Pension benefits. By allowing an agent to sign certain types of trust documents, such as a QMap or QVap trust, or allowing gifting, you may increase the chances that your agents are able to take necessary action in order to provide for your ongoing care. However, you should never attempt to define these powers on your own! Too much power could provide temptation for abuse!
state Planning: The Price of Organization, Rewards, Gifts, and Wondrous Tax Things… FREE REPORT: This complimentary report, focused on Estate Planning, is comprised of many of Mr. Miller’s articles from his long running column for the largest regional newspaper in San Diego County. This report will guide you through the questions surrounding getting your estate planning in order.