Who Is in Charge when You No Longer Are?
L. William Schmidt, Jr.
Senior Trust Officer
Usually, the primary focus of estate planning is preparing for the disposition of your wealth during life and at death. Sometimes in this process, we overlook the extreme importance of making decisions about the person(s) who is entrusted with the responsibility of taking care of your financial matters and health care decisions while you are still living.
As you assess your estate plan, you should ensure that the following documents receive the same attention as your Last Will and Testament or Revocable Living Trust.
FINANCIAL POWERS OF ATTORNEY: It is important to designate an agent to make financial decisions in the event that you experience a lifetime disability resulting from an accident or illness. Otherwise, it may be necessary to obtain a court-appointed conservator – an expensive and cumbersome process. To avoid these difficulties, we recommend that you have a financial power of attorney designating someone in whom you have complete trust to act on your behalf.
If you have never prepared such a power, or if you have not recently checked to see whom you previously designated, this should be done. Children who were minors when you previously designated your brother-in-law may now be good prospects for serving as your agent.
HEALTH CARE POWERS OF ATTORNEY: Health care providers are forbidden to give information to anyone not having written authority – this often includes even close family members. The person having authority to make these decisions may be the same person named in your financial power of attorney, or it might be a different person.
Many clients are tempted to name coagents to make decisions. However, we usually discourage this practice in order to minimize the number of required signatures on decisions and to reduce the potential for deadlock where the agents disagree.
Upon admission, most hospitals are now required to ask if you have a health care power of attorney. Still, it is important to set up your health care powers of attorney prior to an illness, and you should periodically review the person(s) having this power since family dynamics can shift over time.
SPRINGING POWERS OF ATTORNEY: Powers of attorney can be either effective immediately or can be made to become effective only upon some future event, such as mental or physical incapacity. However, many attorneys do not approve the use of springing powers because of the cost and delay that may result from having to prove certain conditions exist to enable the agent’s power. Speak with your attorney or financial advisor to understand if these sorts of documents would make sense for your specific situation.
ADVANCE DIRECTIVE FOR MEDICAL/SURGICAL TREATMENT (LIVING WILLS): It is very important to both you and your loved ones that you give instructions regarding your wishes to prolong life. This eliminates much of the fear and guilt from making these decisions. Colorado enacted a new statute in 2010 that greatly expanded the directives you can make for “end of life decisions.” These include such important matters as life-sustaining procedures and hydration where you have a terminal illness or are in a persistent vegetative state. Be sure to revisit these directives periodically as your wishes and the medical support available may have changed.
DIRECTIVE RELATING TO CARDIOPULMONARY RESUSCITATION (CPR DIRECTIVE): In conjunction with your personal physician or other medical emergency medical service personnel, you can indicate your direction to have no measures taken to restore cardiac function. Although you may authorize the person named in your health care power of attorney to execute a CPR Directive, the physician or medical emergency person must make that notation on your medical records. Be sure you have this conversation with your doctor and your health care power of attorney so they are aware of your wishes.
You can see that these financial and medical decisions and their documentation deserve serious consideration. If you have any questions about these directives, your attorney, trust officer, or financial advisor can support you in making the personalized choices that will serve as guidelines to help your family at those critical moments when people end up asking, “What would mom or dad have wanted?”Investment and insurance products and services are not a deposit, are not FDIC insured, are not insured by any federal government agency, are not guaranteed by the banks, and may go down in value.