It is never too early to secure your family’s interests with an estate plan. Estate planning, however, does become more urgent at certain points in your life. For example, many clients seek estate planning counsel when they get married, have children, start a business, or inch toward retirement. In all these major life transitions, having an estate plan has given our clients peace of mind knowing that their wishes will be honored and that their family will be taken care of in case of tragedy.
As adults age – and at any age – revisiting the estate plan is an important part of this transition. In addition to naming where property will go and which family member cares for minor children, the estate plan should also name a major role: the Power of Attorney. This designation is important for adults of any age and assure that someone you trust is ready to assist you with medical and financial decisions in case you are ever unable to.
Naming Your Power of Attorney
A Power of Attorney is someone who you designate to make decisions on your behalf, should you become unable to. These decisions typically include financial (Power of Attorney for Property) and medical (Power of Attorney for Health Care) ones, and the duties can be split between people in your life that you trust. Sometimes, people choose a spouse or partner, while others choose a child, and others still choose a friend or other non-family member.
The duties of the Power of Attorney for Property and Power of Attorney for Health Care can be split, if you choose. The reasons for choosing two different Power of Attorneys vary from person to person, and if you are feeling confused, you, should seek counsel so that you are well informed of the scope and implications of each.
While it is easy to think that you won’t need a Power of Attorney until you are well into your senior years, this isn’t always a responsible decision. Your designated Power of Attorney, for example, would take over for medical and financial decisions if you were in a car accident and incapacitated for weeks or months as you recover, or if you have another medical emergency that leaves you unable to make your own decisions.
If you are an older adult, determining your Power of Attorney is even more critical. Your Power of Attorney can work with you to know your wishes prior to any major medical crisis, or before any dementia diagnosis makes you unable to make sound decisions.
While establishing your Power of Attorney documents, you will also complete a brief section to designate a Guardian. Again, these guardian duties can be split between medical decisions (guardian of person) and property decisions (guardian of estate). Your Guardian can be anyone who you choose as long as they are at least 18 years old, a resident of Illinois, have no criminal background, and aren’t under a guardianship of their own.
Consequences of Not Having a Power of Attorney
If you do not designate a Power of Attorney, and you need the services of a Guardian, the court will intervene. This court appointed guardian ad litem serves as the eyes and ears of the court, to sift through those petitioning to be your Guardian (such as your family members or friend). This guardian ad litem will work hard to determine what person should become the decision maker, but this comes at a cost. Your estate will pay anywhere from $1,500 to $3,000 for the court to initially name a Guardian and that cost to your estate can continue to accrue when bond surety is assessed. If there are no candidates to become your Guardian, a government agency will step in to make decisions on behalf of your estate.
All this to say, that a court appointed Guardianship can become costly to your estate and stressful to your family. If you have not named a Power of Attorney, it is crucial that you do this task soon.
If your will does not include a Power of Attorney agent, don’t wait any longer to name one. Give us a call for a free consultation to review your current estate plan and make the changes needed to give you the peace of mind you deserve
When considering where your hard-earned money will go after you die, it’s normal to take…