The 18th birthday of a disabled child can evoke feelings of apprehension for parents. While some parents may view their children as ready to embrace independence and take charge of their lives, parents of disabled children typically harbor concerns about how their child will navigate life without their oversight. With their child now legally considered an adult, parents may lose the ability to make decisions on their behalf or receive information about their medical or financial needs. This can leave many parents feeling unsure of how to continue caring for their child. However, by preparing thoroughly and seeking professional legal advice, parents can take measures to ensure that their child's needs continue to be met and their best interests remain safeguarded with asset protection you can perform in Reno, NV.
To ensure the ongoing ability to provide care for your disabled child after they reach 18, it is advisable to explore the option of having them execute a financial and/or medical power of attorney. A financial power of attorney will authorize someone chosen by your child to make financial decisions on their behalf in case they become incapacitated or are unable to communicate their wishes. In the absence of this document, you may need to pursue legal avenues to acquire the necessary authority for managing your child's financial affairs. It's important to know that if your child chooses you to make decisions for them, they can still make their own choices if they have the capacity too.
Additionally, your child has the option to execute a medical power of attorney. This will allow them to designate a trusted agent who can make medical decisions on their behalf in situations where they are unable to do so or unable to communicate their preferences to healthcare providers. The agent appointed is chosen to make decisions according to your child's wishes. As long as your child possesses the capacity to make and articulate their own medical decisions, they maintain the right to do so, and the appointed agent would only step in if your child becomes incapable of making or expressing their preferences.
Executing a financial or medical power of attorney requires that your child has the mental capacity to understand and sign the documents, with specific capacity requirements varying by state. Even if your child cannot physically sign the documents, they may still be able to execute them. It's crucial to prepare these documents ahead of time, particularly if your child has a degenerative condition. Not planning ahead can lead to serious problems because the documents are meant to assist your child when they can't make decisions on their own. Until that happens, your child can still make their own choices.
In the event that your child is not able to execute a financial or medical power of attorney due to lack of mental capacity, making decisions on their behalf may require court intervention. This process can be lengthy, costly, and public, causing additional stress and difficulties for both you and your child.
If your child is incapable of executing the required legal documents, you might need to undergo a legal procedure in court to establish guardianship and conservatorship. During this process, you would ask the court to grant you the authority to make decisions on your child’s behalf. The exact titles of the roles you may be seeking appointment for vary by state, but generally a guardian (sometimes known as a guardian of the person or conservator of the person) is authorized to make general life decisions for your child, such as where they live and what medical treatment they receive. A conservator is authorized to make financial decisions on behalf of your child.
If appointed as a guardian or conservator, you would have authority to make all decisions, including power of attorney for medical records, and your child would no longer be able to make any decisions for themselves. In some states, you may have the option to seek a limited or partial guardianship or conservatorship, where you can only make decisions specified by a court order. In all other matters, your child retains the right to make their own decisions. The court's overall objective is to promote independence while ensuring that your child receives the necessary support and care.
Get in touch with us today if you are wanting to be prepared for your child with disabilities to approach the age of 18. It's important to plan ahead so that your child gets the same care they had going up well into their adult life. This includes addressing the power of attorney for medical records. Our team is available to provide support and guidance as you navigate through the essential steps.
Every child is a precious gift, and as parents or grandparents, we strive to plan for their future, anticipating their needs and aspirations. However, families with special needs children or grandchildren face additional responsibilities in ensuring their loved one's future is secure, fulfilling, and supported. To ensure a flourishing future for your special needs child or grandchild, estate planning measures focused on their unique circumstances are essential. We recommend the following steps:
When it comes to estate planning, creating a Special or Supplemental Needs Trust (SNT) for your special needs child or grandchild should be a top priority. An SNT is a specialized trust designed to set aside funds and assets for the benefit of a beneficiary who may qualify for public assistance due to their disabilities. It can be established as a standalone trust or added to your existing trust.
It's important to note that government programs providing aid to disabled individuals have strict criteria regarding the amount of money and property a person can own while receiving benefits. Structuring any inheritance your special needs beneficiary may receive in a way that doesn't disqualify them from obtaining government benefits is crucial. Even if they are not currently receiving government benefits, considering the possibility of future needs is essential. To ensure all opportunities are available, it is vital that the trust is meticulously drafted by a lawyer well-versed in the eligibility requirements for government benefits.
An SNT not only provides financial security but also allows you to appoint a care manager or advisory committee. The care manager serves as an advocate for your special needs beneficiary, overseeing their well-being periodically or daily, depending on their level of care requirements. An advisory committee, comprising family members, friends, and professionals, can provide guidance to the trustee on the beneficiary's needs and the best use of the funds.
Additionally, the SNT can include a statement of intent, outlining the trust's purpose and how the funds should be utilized. This section acts as a safety net in case changes in the law make the beneficiary ineligible for government benefits. It allows for modifications to ensure your original intentions are met, even in the face of unforeseen circumstances.
In addition to establishing an SNT, putting your instructions in writing is crucial to ensure your wishes are carried out as intended. Consider creating a letter or memorandum of intent that provides guidance to your trustee on managing the trust after your passing. Although not legally binding, this document offers valuable insights into your true intentions. You can include details on how the funds should be used in accordance with government rules, specific goals you would like the beneficiary to achieve, and the standard of living you envision for them.
Supporting a special needs child or grandchild can be financially demanding, and it's important to consider how to sustain their care once you pass away. Life insurance can be a valuable tool in ensuring there will be sufficient funds for the trustee to use for their benefit. By designating the SNT as the beneficiary, you can provide a lump sum payment that is not subject to the same tax liabilities as retirement accounts.
The SECURE Act has brought changes to how beneficiaries can receive distributions from inherited IRAs, potentially impacting the financial support available to your special needs beneficiary. However, the Act also recognizes "eligible designated beneficiaries," including individuals with disabilities, who can still receive distributions over their life expectancies. Congress has established rules that allow the life expectancy of disabled beneficiaries to be used for certain types of trusts. If you have a substantial retirement account, it is crucial to discuss your distribution options to maximize benefits for all your beneficiaries.
We understand that securing a bright future for your special needs child or grandchild is of utmost importance to you. Our priority is to work with you in developing a comprehensive plan that will guarantee continued care and well-being for your loved ones. Please do not hesitate to reach out to us to schedule an appointment so that we can begin this process together.
Estate planning is an important process that involves making arrangements for the distribution of your assets and property after your passing. While having an estate plan in place is crucial for everyone, people with disabilities need to get in touch with a Reno estate attorney even more.
Disability panels are groups of people who are appointed to oversee the management of an estate plan for an individual with a disability. This group, which may consist of close relatives, dependable friends, financial advisers, and attorneys, works to see that the disabled person's needs and wishes are fulfilled in the event of their incapacitation or passing. This is crucial because people with disabilities could have distinct needs that call for extra care and attention.
Disability panels offer a level of transparency and accountability not often found in conventional estate planning arrangements, which is one of its key advantages. By appointing a panel to manage your estate plan, you can be confident that your wishes are being carried out according to your intentions.
Knowing that there is a plan in place for managing a potential disability, everyone involved can feel more secure and prepared. Also, a disability panel can ensure that, in the event of a handicap, the person's desires are respected and carried out.
It's also worth noting that disability panels can be a valuable tool for estate planning. By including a disability panel in an estate plan, individuals can ensure that their wishes for care and decision-making are respected even if they become disabled. In addition to ensuring that the estate is managed in accordance with their wishes, this can help avoid family disagreements.
Disability panels can help prevent disputes among family members or other parties who may have conflicting interests in your estate. When there is a panel in place to manage your estate, there is less opportunity for disagreements or misunderstandings to arise. This can help ensure that your assets are distributed according to your wishes and can help prevent the unnecessary strain on relationships that can often result from disputes over an estate.
In addition to providing oversight of your estate plan, disability panels can also assist with other aspects of your care. For those with impairments, who might need extra care and attention to preserve their quality of life, this might be particularly crucial.
When choosing members for a disability panel, it is important to consider factors such as trust, competency, and reliability. You want to choose people who will be dedicated to carrying out your intentions and who are capable of administering your estate plan in a competent and ethical manner. This may include family members, close friends, or trusted advisors who have experience with estate planning or disability issues. The correct people must be chosen to serve on the disability panel in order for it to be effective. These people ought to be dependable, aware of the person's requirements and preferences, and capable of cooperating in decision-making. Clear rules and processes for the panel's operation and decision-making should be in place as well.
Disability panels can play a crucial role in estate planning for individuals with disabilities. By designating a panel to manage your estate plan, you can be certain that your wishes are being carried out exactly as you planned and that your assets are being dispersed in a fair and equitable manner. This can provide you and your loved ones peace of mind and help avoid disagreements or misunderstandings that frequently occur in conventional estate planning arrangements. If you or a loved one have a disability, it may be worth considering the benefits of disability panels in managing your estate plan.
For over a quarter of a century, the National Safety Council has designated June as a
month of paramount importance - a time to honor and prioritize safety at a national
level. This annual celebration, known as National Safety Month, serves as a powerful
reminder of the critical role that safety plays in our lives.
The aim of this month-long campaign is to increase public awareness about the most
significant safety and health risks faced by people in the United States. While many
people are aware of common safety hazards, such as physical injuries, they may not
realize that incapacity or death can result in substantial financial and emotional
consequences for themselves and their families. A revocable living trust is a legal tool
that can help protect you and your loved ones from the costs, uncertainty, and chaos
that may arise in the event of your incapacity or death.
Protection by a Revocable Living Trust for Yourself
Just like anyone else, you face the risk of experiencing a catastrophic accident or illness
that could leave you incapable of taking care of yourself or your loved ones. This
incapacity might be temporary, or it could last until your eventual death. The total cost of
incapacity can be difficult to calculate and can include lost wages, as well as the
expenses of required medical care. These expenses may include requiring assistance
with daily activities such as bathing, eating or dressing. However, it can quickly become
very costly - the average cost of assisted living in the United States in 2020 was
approximately $4,300 per month.
A revocable living trust is an essential legal tool that helps protect you and your loved
ones by providing instructions for how you will be financially supported during your
incapacity. With a revocable living trust, you can choose who will manage your finances
when you are no longer able to handle them yourself. There’s no better time than now
to establish a revocable living trust because it is revocable, which means that you can
change it at any time and alter it as your life circumstances change, as long as you have
the mental capacity.
Protection by a Revocable Living Trust for Your Loved Ones
Your loved ones’ financial and emotional well-being is also protected by a revocable
living trust. It ensures that your wishes are clearly outlined for what should happen in
the event of your incapacity or death. This prevents your loved ones from having to speculate
on your desires or worse, having to follow state law to determine who should handle your finances and end-of-life affairs.
Probate fees, which vary significantly by state, can also be very expensive. For
example, in California, attorney and executor fees for probating an $800,000 home
could be as high as $38,000, as set by law. A revocable living trust can help avoid
probate and those high accompanying fees.
Revocable living trusts also offer privacy protection. Without the instructions provided in
these trusts, family members often have to resort to public court proceedings. This
means that the court and other curious individuals may pry into your private affairs.
Furthermore, these types of trusts can provide basic martial deduction planning to
maximize the use of you and your spouse’s estate tax exemptions. This helps to reduce
your loved ones’ estate tax burden, after your death. Finally, by using this legal tool, you
can protect the money you leave to your loved ones from their creditors.
Properly Funding Your Revocable Living Trust
To ensure that a revocable living trust serves its intended purpose, it must be properly
funded. This means that any property you own must be transferred to the trust, or for
certain assets, the trust must be named as the beneficiary. Failure to properly fund your
trust may result in the need for probate. To avoid this, it is essential to review any
correspondence you have received from your attorney regarding which accounts and
properties should be owned by the trust or designated as beneficiaries. It is especially a
good time to do this in the month of June, which is National Safety Month!
Given the importance of the instructions contained in a revocable living trust, it is
advisable to review them annually to ensure that they still align with your final wishes. If
changes are necessary, it is recommended that you seek assistance from a
professional to update your trust accordingly. This will ensure that your trust continues
to serve you and your loved ones during times of incapacity and after your passing.
Unexpected personal tragedies are not particularly common, but they do occur and they can dramatically change the course of a child’s life. Parents in the United States have a statutory right and responsibility to name a guardian for their child or children. If a guardian isn’t legally appointed by the parent, it becomes the responsibility of a judge to determine guardianship following the parents’ passing or incapacitation. In such instances, custody of the child may go to anyone chosen by the judge, regardless of what the parents would have wanted.
The guardianship of a child who is originally from another country can be even more complicated to manage. A child custody attorney can help citizens and non-citizens determine proper guardianship for children in the event of their incapacitation. Learn more about guardianship in Nevada below.
A general rule of thumb regarding guardianship in Nevada, or any state in the U.S., is that all parents have a fundamental and constitutional right to the care, custody, and control of their child. This essentially means that a parent has the right to make all decisions for their child without interference so long as they do not put the child in danger. This right was eventually extended to non-citizen parents that reside in the U.S. legally, allowing both citizen and non-citizen parents to name whomever they want as a guardian to their children—so long as they meet the state requirements.
It’s important to note that it is not only a parent’s right to choose a guardian but also their responsibility. This is the only way to keep the courts from determining guardianship of the child.
Children who legally reside in the U.S. as citizens but are native to another country may face further obstacles. Because it’s easier for a judge to oversee the safety and care of a child within their jurisdiction, it can be difficult to move a child to another country. To combat this, parents should be clear about who the child will live with and where (whether in the U.S. or not).
Parents of children with attachments to other countries should always apply for dual citizenship for the home country and the United States. This will prove to the court that the parents intended for their child to have connections to their home country and provide a basis for relatives living outside of the U.S. to request guardianship assistance from their own state department. Proving dual citizenship will help the process of expatriation and ensure the child is able to travel back to their home country.
It’s also possible that a non-citizen may be appointed as the guardian of a child. However, if the parents request for the child to remain in the U.S., there is no guarantee that the guardian will be allowed to stay in the U.S due to the guardianship alone. The person who is appointed as the child’s guardian will need to become a U.S. citizen through their own legal proceedings for this to be accepted.
It is possible for the law to interfere with a parent’s choice of guardianship under specific circumstances. A court may invoke the policies of “Best Interests” and protections made by the Hague Convention to retain custody of a child who would otherwise be sent to a country where they would be endangered or persecuted. While this is not very common when handling guardianship in Nevada, it is an issue that could possibly arise.
During interim periods between emigration, which can take months, a child may be stuck living in the U.S. before they can be united with their new full-time guardian. In these cases, a temporary guardian will also need to be nominated for the time being.
The child custody attorneys, Anderson, Dorn & Rader, are here to ensure the decisions you make regarding your child’s care are kept and seen through. If you need help legally determining guardianship in Nevada for your child, connect with us today.
A lot of people think that estate planning begins and ends with the financial part of the equation, but this is really not the case. It is also important to address eventualities that you may face toward the end of your life, such as incapacity or incompetency. They are not especially pleasant to consider, but a difficult situation can be much worse if you enter into it when you are completely unprepared.
The population is aging rapidly because of the fact that the baby boomer generation is attaining senior citizen status. Of course, if you plan ahead effectively for retirement, your “golden years” can be full of travel, leisure activities, and quality time with your family.
This is something to look forward to, but once you reach the age of full Social Security eligibility, your life expectancy will be 85 if you are a man, and 87 if you are a woman. The United States Census Bureau has found that the segment of the population that is between 85 and 94 years of age is growing faster than any other.
When you put these numbers into perspective, you can see that there is a very good chance that you will experience life as an octogenarian.
Alzheimer’s disease is a condition that we have all heard about, but when you look into it a bit, its widespread nature is quite surprising. According to the Alzheimer’s Association, one in 10 people that are 65 and older have contracted this disease. It strikes someone every 65 seconds, and by 2050, it is projected that 13.8 million American seniors will be suffering from Alzheimer’s.
This disease causes dementia and incapacity for seniors and come in many different forms. Clearly, the potential for latter life incapacity is something that everyone should take quite seriously.
There are a number of different steps that you can take to prepare yourself for possible incapacity, starting with the creation of a living trust. Many people think that a last will is the right choice as an asset transfer vehicle if you are not extremely wealthy. In fact, a living trust is a better choice for a number of different reasons.
We will cover all of them in a different blog post, but one of the advantages that you can gain if you use a living trust is the ability to prepare for incapacitation. While you are alive, you can act as the trustee of your living trust. In the trust declaration, you can name a disability trustee that would be empowered to administer the trust if you are still living, but incapacitated.
Your incapacity plan could include a durable power of attorney for property, which would give the agent the ability to manage your financial affairs. A durable power of attorney is another document that can be used to address incompetency later in life. This document gives an agent or attorney-in-fact the ability to make legally binding decisions on your behalf. You could execute one of these documents if you don’t have a living trust, and it would be useful even if you do, because you could have property in your personal possession that was never conveyed into the trust. A durable power of attorney for health care decisions should be part of incapacity planning.
In order for the health care agent to be able to make sound decisions, he or she must have access to your medical records. They are kept private unless you sign a HIPAA release form, so this is another piece to the puzzle.
How would you feel about being kept alive indefinitely through the utilization of artificial life-sustaining measures if there was no hope of recovery? You can answer this question through the inclusion of a living will.
If you would like to learn more about all aspects of estate planning, attend one of our upcoming Webinars. There is no admission charge, and you can check out our Webinars schedule page to get all the details.
An important estate planning question that must be asked is, "Who makes decisions about your medical care if something happens to you?" This results from illness, injury, incapacity (such as dementia or Alzheimer's), or some other reason. If something happens, having the right legal documents in place might be a lifesaver. Simply writing down your wishes ahead of time may not be enough because you cannot anticipate every situation. You must select someone you trust to manage your care, instead of relying on a doctor, estranged relative, or even a judge, none of whom are likely to be aware of your preferences. In order to accomplish this, you need a Nevada health care power of attorney and an estate planning attorney can help.
In order to prepare comprehensive Nevada health care directives, you need three different health care documents: the Durable Power of Attorney for Health Care, a Living Will, and a HIPAA Authorization Form. The Durable Power of Attorney for Health Care allows you to select someone you trust to manage your health care when you are unable to do so. That person is your “agent.” The second document, the Living Will, allows you to specify in writing the type of medical treatment you agree to receive in certain situations. This includes end-of-life wishes for health care treatment (often referred to as your "pull-the-plug" directive). Finally, your HIPAA Authorization Form makes sure those people you want to be involved in this process will not be limited in discussing your private medical care with your physicians, nurses, or other health care providers.
The person you select to make your health care decisions is called your agent. It is common for people to name a spouse, partner, child, relative, or close friend as an agent. However, in Nevada your agent may not be:
These restrictions do not apply to your spouse, legal guardian, or next of kin, however. So if your spouse happens to be employed at a health care facility, the restriction would not apply. If you have questions about restrictions on a health care power of attorney, talk to one of our estate planning attorneys.
In order to create a legally valid power of attorney or living will, you must be considered “legally competent.” In this context, competency refers to mental capacity, age, and maturity. In order to enter a legally binding agreement, you must be at least 18 years of age. This requirement is based on the presumption that individuals who are still immature are too inexperienced to understand or properly execute a contract or legal document. Furthermore, if you have been diagnosed with Alzheimer's disease, dementia, or have any cognitive impairments, you may not create these legal documents without the written certification by your physician that you are of sound mind at the time of signing them.
In Nevada, you can authorize your health care agent to take over your medical care immediately upon execution of the document. Accordingly, there will be no need for a physician to determine whether you are incapacitated or not. Instead, you agent will have the ability to step in and make decisions on your behalf at anytime. As long as you are competent, you will still be able to dictate your own medical care. Regardless of when the document goes into effect, your health care agent is always required to act in your best interests and follow your health care wishes as you have expressed them.
If you have questions regarding powers of attorney or any other estate planning matters, please contact the experienced attorneys at Anderson, Dorn & Rader, Ltd. for a consultation. You can contact us either online or by calling us at (775) 823-9455. We are here to help!
We understand that making the decision to obtain a court-ordered guardianship for can be difficult. If a loved one is no longer capable of caring for themselves and properly managing their affairs, and they did not establish a living trust for themselves, then a guardianship may be the only alternative. When families reach this point, and they are facing the decision to get the court involved, most families wonder how much a guardianship will cost in Nevada? While the overall cost can be estimated, it depends on numerous factors that must be taken into consideration.
A guardian is entitled to “reasonable” compensation for his or her services. These fees must be related to the guardian’s duties and must be reviewed and approved by the Court overseeing the guardianship. There are numerous factors that are considered by the Court in determining what the reasonable fee should be. Some of those factors include:
A public guardian is a county position and entitled to fees as any other guardian would be. However, if the ward's estate is insufficient to pay fees then the public guardian generally will not collect a a fee.
Private professional guardians will nearly always charge a fee, as it is their profession to serve in this capacity. So, unless the ward has sufficient assets to pay the fees, a private professional guardian will not be an option. The fees of a private guardianship in Nevada are often higher at the beginning of a guardianship because of the work involved to initially establish a guardianship.
There are benefits associated with consulting an attorney before and during the guardianship process. An estate planning attorney can bring invaluable expertise in incapacity planning and in navigating through the court process. It would not be uncommon for fees to establish a permanent guardianship to start at $3,000. However, this is only an estimate and should be discussed with your attorney because rates and time involved can vary. In most cases, attorney fees are paid from the assets of the ward and must be approved by the court.
There may be urgent situations where a guardian must be appointed immediately. In these situations, the law provides emergency procedures for the appointment of a temporary guardian. The fees for a temporary guardianship also vary, especially if a temporary guardianship is likely to result in a permanent guardianship.
If you have questions regarding incapacity planning or guardianships, please contact Anderson, Dorn & Rader, Ltd. either online or by calling us at (775) 823-9455.
You may have heard of HIPAA, or been asked to sign a form the last time you visited your doctor. Nearly every health care provider now requires its patients to sign acknowledgement forms indicating they are aware of the HIPAA regulations. How many of us know what HIPAA is for and what these health care regulations require? It is helpful, while you are creating or modifying your estate planning, to understand how HIPAA authorizations play a role in your estate and incapacity planning.
What is HIPAA?
HIPAA is the acronym that stands for Health Insurance Portability and Accountability Act, which was passed in 1996. In 2003, the U.S. Department of Health and Human Services passed regulations that apply to HIPAA. These laws impose serious penalties upon health care providers who, among other things, release any Protected Health Information without authorization. This includes releasing unauthorized medical information that is normally contained in a patient’s medical records. Because of these very strict laws, health care providers have become very hesitant to release medical records or any other medical information to anyone other than the patient.
What medical information is protected by HIPAA?
According to the statute and applicable regulations, “protected health information” includes any information created or received by a covered entity, which relates to the mental or physical health condition of an individual, or that could be used to identify that individual. The legal definition of “health information” is:
Health information means any information, whether oral or recorded in any form or medium, that –
(A) is created or received by a health care provider, health plan, public health authority, employer, life insurer, school or university, or health care clearinghouse; and
(B) relates to the past, present, or future physical or mental health or condition of any individual, the provision of health care to an individual, or the past, present, or future payment for the provision of health care to an individual.
“Covered entities” include health care providers, as well as pharmacies, insurance companies and nursing homes.
The need for HIPAA authorizations in incapacity planning
In light of the HIPAA regulations, health care providers will not release medical information without the required authorization. As such, every comprehensive estate and/or incapacity plan needs to include a properly executed HIPAA authorization. Otherwise, your spouse or children, will be unable to obtain any information regarding your condition, in the event you become incapacitated. The HIPAA authorization allows any person you name in the release to receive protected medical information from your health care providers. It is critical that the person you identify as your agent for a Health Care Power of Attorney be authorized to receive your medical information. If you do not include a HIPAA authorization that will cover your agent(s) for a Health Care Power of Attorney, a Durable Property Power of Attorney, as well as your trustee(s) in your revocable living trust.
Another consideration is the need for your attorney to have access your medical records, for instance, if a determination as to your incapacity is required at some point. The reality is, there may be many individuals, designated in your various estate planning documents, who will need access to your medical information in order to fulfill their fiduciary duties. The HIPAA authorization will give them that access. The alternative would be going to court.
If you have questions regarding HIPAA authorizations, or any other incapacity planning needs, please contact Anderson, Dorn & Rader, Ltd., either online or by calling us at (775) 823-9455.
Under Nevada law, you have the right to make decisions regarding the use of life-sustaining treatment, as long as you are competent to do so.
Learn more about advanced directives in Nevada in this presentation.
An agent is someone who is designated to manage the affairs of someone else. In a power of attorney, their authority usually extends to the management of finances or health care decisions. The person who creates the power of attorney and designates the agent is known as the “principal.”
Once an agent accepts the authority given to him or her under the power of attorney, a legally binding relationship is created between the agent and the principal. With that relationship and authority comes certain legal duties that must be adhered to. The role of an agent is entirely voluntary, but once an agent agrees to take on that role, the agent has agreed to the responsibilities that come with it.
What is an agent’s responsibility to the principal?
Being an agent under the authority of a power of attorney is a serious function and cannot be taken lightly. An agent is expected to act in good faith and with competence, care and diligence. An agent must avoid any conflicts that would prevent him or her from acting in the principal’s best interests.
An agent’s actions are governed by the authority granted in the power of attorney document, and based on the preferences of the principal. It is improper to override the desires of the principal in favor of the agent’s own preferences.
An agent is required to keep his or her own money and property separate and distinct from the property of the principal. Whenever an agent conducts financial transactions on behalf of the principal, the agent must use only the principal’s funds for the principal’s benefit. The agent is also expected to keep good records of all transactions, including receipts. An agent is required by law to provide an accounting to the principal whenever requested.
Differences between a general and limited power of attorney
Depending on the type of power of attorney, an agent’s authority may be limited. A general power of attorney provides very broad authority. For example, an agent may be given general authority to handle all financial matters or all health care decisions. A general power of attorney is commonly used to give an agent full authority to handle important decisions regarding the finances, real property, personal property and accounts of the principal. It can be valid immediately upon the execution of the document or the principal may specify that it is valid only in the event that the principal becomes incapacitated.
Whereas, a limited power of attorney normally provides more precise instructions for the agent or contains limitations on the scope of authority. If it is limited to a single transaction such as the sale of a piece of real property, once those duties have been completed or the goals accomplished, the powers are automatically revoked. A limited power of attorney may be put in place for a particular bank account and no other asset, so as long as the account is in place and the power of attorney has not been revoked, the agent may have access to that account.
Can an agent resign or be replaced?
Sometimes the power of attorney will describe how the agent can resign. If not, the agent may resign by simply giving notice to the principal. If the principal is incapacitated, the agent must give notice to the guardian or conservator (if one has been appointed). If there is a co-agent or successor agent, then notice would be given to that person, as well. A principal may remove an agent by giving notice to the agent in the same manner.
In the event none of those situations apply, an agent can resign by giving notice to the principal’s caregiver, to another person with sufficient interest in the welfare of the principal, or to a governmental agency with the authority to protect the principal. It is necessary for the principal, when an agent has resigned or has been removed, to notify any person or institution that has dealt with the agent. If a power of attorney has been recorded, it is necessary to record the revocation of the power, as well.
Powers of attorney can be highly technical documents and should be prepared by a qualified law firm to be certain of its legality. Many times a limited power of attorney is available from the institution requiring it such as as banks or title companies.
Both a guardianship and a power of attorney are methods of placing the control of someone’s affairs into the hands of someone else. There are differences between the two and certain advantages and disadvantages that you should discuss with your Nevada Estate Planning attorney before making a choice as to which is most appropriate for you.
A guardianship is a legal proceeding during which the court appoints someone to become the guardian for someone else who has become incapacitated in some way. The guardian serves as the decision maker for the ward. The guardian can be placed in control over the ward’s property, finances or care of the ward himself.
The guardian’s job is always to protect the ward and his assets. The guardian is required to obtain a court order before making certain decisions which is preceded by filing a petition with the court. Some of those important decisions include withholding life-saving medical care or terminating parental rights. The guardian is also required to make an annual report to the court regarding the status of the ward and his or her personal and financial affairs.
A power of attorney is an estate planning document which authorizes an “agent” to act on behalf of the “principal.” A financial or property power of attorney can be used to pay bills, manage bank accounts, or complete other types of financial transactions. A health care power of attorney can be used to make medical decisions. The power of attorney is intended to specify the specific tasks the agent is authorized to perform. The authority you convey can either start immediately ("immediate") or only after a certain event occurs ("springing"). A power of attorney does not require you to give up the right to manage your own affairs, but simply allows someone else to act on your behalf if that becomes necessary.
One difference is that a power of attorney is a private method, whereas a guardianship is a public proceeding carried out and monitored by the court. A power of attorney is less expensive than a guardianship, primarily because of the court involvement required with a guardianship. Another difference is that, with a guardianship, you may not have any control over who is chosen to act on your behalf. However, with a power of attorney, you are entirely free to identify the person who will serve as your agent.
With regard to the scope of authority, a power of attorney is generally more limited in scope. Furthermore, some institutions may be hesitant, or even refuse to honor the terms of power of attorney. That is primarily because of the risk of fraudulent use by agents. On the other hand, a guardian is given broad legal authority, backed by the courts, which is recognized by financial institutions, as well as health care providers.
A power of attorney(POA) is a legal document that gives someone you have chosen the authority to act on your behalf. In Reno, Nevada, the person who creates the power of attorney is called the “principal.” The person you choose to act on your behalf is called the “agent,” or the "attorney-in-fact." Two types of powers of attorney in Reno are most commonly used. One to handle medical needs and the other to manage financial needs. For example, you could create a power of attorney to give someone the authority to pay bills or manage your bank accounts. The authority can become effective immediately, or only when a specific event occurs, such as incapacity.
In order to be sure that this legal document is valid and to ensure that your agent possesses the power he or she needs to perform tasks on your behalf, certain requirements must be met. In Nevada, the requirements are governed by state statute. Generally, the law in Nevada requires as follows:
A power of attorney must be signed by the principal or, in the principal’s conscious presence, by another individual directed by the principal to sign the principal’s name on the power of attorney. A signature on a power of attorney is presumed to be genuine if the principal acknowledges the signature before a notary public or other individual authorized by law to take acknowledgments.
There are some specific requirements based on different circumstances.
For example, if the principal is residing in a hospital, nursing or a similar healthcare facility, at the time he or she executes the power of attorney, a certification of competency is required from a physician, psychologist or psychiatrist. That certification must be attached to the power of attorney.
Also, if the principal either resides in, or is about to reside in such a facility, no one associated with that facility (i.e., owner, operator, employee) can be named as an agent. The only exception is if one of those people is a spouse, legal guardian or next of kin of the principal.
In Nevada, a power of attorney for health care must be signed by the principal and either acknowledged before a notary public or witnessed by two adult witnesses who personally know the principal. The witnesses cannot be a healthcare provider, an employee of the healthcare provider, or an operator or employee of the healthcare facility. The agent named in the power of attorney cannot be a witness either. At least one of the witnesses must be unrelated to the principal by blood, marriage or adoption and not entitled to any part of the principal’s estate upon his or her death.
Although there are various do-it-yourself power of attorney forms available on the internet, one-size doesn’t fit all when it comes to estate planning instruments. It is best to consult with an attorney to make sure that your specific needs will be met by the document. If you need assistance with drafting a power of attorney in Reno, contact the Anderson, Dorn & Rader office and we will be happy to help.
There are different types of powers of attorney. They each have their own purpose and transfer varying levels of authority to the agent. A “durable” power of attorney stays in effect even after you have become incapacitated. Any other type of power of attorney will terminate automatically if you lose your mental capacity. Common examples of durable powers of attorney are ones that relate to financial or medical affairs.
According to the statutory law in Nevada, an “agent” (sometimes referred to as an "attorney-in-fact") is the “person granted authority to act for a principal under a power of attorney.” Depending on the type of power of attorney you are executing, there are some limitations on who can act as your agent.
For example, if the principal either resides or is about to reside in a hospital, assisted living facility or facility for skilled nursing, there are several categories of individuals that can NOT be designated as an agent. Those include the principal’s health care provider, an employee of the health care provider, the operator or employee of the health care facility. The only exception is if any of those individuals are the spouse, legal guardian or next of kin of the principal.
There are other specific situations that must be considered, especially when the principal is residing in a healthcare facility of some kind. You should consult a Reno Nevada estate planning attorney for assistance in choosing your agent for a power of attorney.
Since your agent will be given the legal authority to act on your behalf, it is crucial that you choose someone trustworthy and whom you believe will act only in your best interests. Consider whether you trust that person with your important financial or legal affairs.
Is that person responsible when it comes to their own finances? Consider how they manage their own affairs. You may choose a lawyer or accountant, but remember they will normally charge a fee, whereas family members usually perform the service for free. No matter who you choose, discuss that decision with them and make sure they agree to serve as your agent before you officially appoint them.
Remember, if a conflict of interest ever arises or you become worried about the agent’s trustworthiness, you can always terminate the agent’s authority by revoking the power of attorney and creating a new one.
You are allowed to appoint co-agents who will serve together as equals, as well as successive agents, in case the first agent is unable to continue the task. Keep in mind, however, if you appoint co-agents, confusion or conflict may arise if there are disagreements about the best approach for your financial assets. This situation would no doubt cause delays and disrupt the handling of your finances. With a health care power of attorney, it is never advisable and in some states it is prohibited to name co-agents. The reasons are obvious. For example, your health care provider may be able to reach only one of the agents in the event of an emergency, you may be suffering internal bleeding or another medical event that requires immediate attention, or the agents might not agree about what is best. Forcing the health care provider to find two people may exacerbate an already urgent situation. It is wise to discuss the potential advantages and disadvantages of this choice with a Nevada Estate Planning Attorney as part of your overall estate planning.
There are different types of wills that are used in the field of estate planning. One of them is the last will or last will and testament, which is used to transfer assets following your death. You can also nominate a guardian for dependents in your last will. Another type of will that should be a part of every comprehensive estate plan is a living will. Some people confuse living wills with living trusts, so we would like to provide some clarity here.
Individuals generally equate a will with the transfer of property. This can lead to the misconception that a living will facilitates property transfers while you are still alive.
This is not the case. A living trust is a vehicle of asset transfer. However, a living will has nothing to do with financial matters.
With a living will you state your wishes with regard to the implementation of life-sustaining measures like the utilization of feeding tubes, respirators, and ventilators.
It seems that modern medicine can keep people alive almost indefinitely using these measures, even if there is no hope of recovery. Some individuals would want this to continue, and others would prefer to allow nature to run its course. How you feel about it is a personal preference, and you can state that preference by executing a living will.
If you don't have a living will and you do fall into an incapacitated state your closest relatives would be forced to make decisions in your behalf. This is a very difficult position to be placed in. You essentially have a matter of life or death in your hands, and you may not know how the person in question would have acted if he or she could communicate.
Disagreements among family members often arise, because this is an issue about which people can be very passionate. This is a difficult time for all concerned, and family members should be pulling together. You can prevent this type of situation if you take the time to execute a living will.
A living will is an advance directive for health care. Since we are covering an important advance directive in this post we would like to mention another one that is highly recommended, the health care power of attorney.
Medical decisions may present themselves that are not specifically covered in the living will. They may be quite sensitive. You can appoint someone of your choosing to make these decisions for you if it becomes necessary by executing a durable power of attorney for health care.
When you do this the agent you name will have the legal authority to act on your behalf when it comes to health care decisions.
The process of estate planning involves some very measured and informed decision-making. If you make certain assumptions as a layperson you may be making errors of commission and omission.
Because of the fact that there are websites on the Internet selling do-it-yourself generic, fill-in-the-blanks last wills, more and more people are getting the idea that they can go it alone. Unfortunately, this is increasing the numbers of people who are not properly prepared.
With a will, you need to consider the fact that your estate must be probated before the heirs receive their inheritances. The probate laws in the state of Nevada require rigid formalities that may cause delay and expense if they are not followed precisely.
When you work with a qualified estate planning attorney who is licensed in Nevada you can be certain that your will is properly constructed.
If you use a boilerplate document that you picked up on the Internet or at the book store you have no way of knowing if the will is truly up to par.
And then there is the simple fact that a last will may not be your best choice.
Last Will Alternatives
The probate process that we mentioned above is time-consuming, and, when all the costs, fees and expenses are considered, quite expensive.
There are effective ways to arrange for asset transfers to your heirs directly, outside of probate. One of them would be through the creation of a revocable living trust.
With these trusts you can retain control of the assets while you are alive and well. If you were to become incapacitated, your successor trustee would be empowered to handle your financial affairs, usually avoiding the need for a guardianship.
Upon your passing the trustee administers the estate outside the probate court and then distributes assets to the beneficiaries in accordance with your wishes.
Specialized Concerns
There is no one-size-fits-all estate plan because different families have different concerns. For instance, if you have estate tax exposure you must take steps to position your assets in a tax efficient manner to avoid a 40% hit.
If asset protection is a concern you would implement certain strategies that would not be important if you were not concerned about shielding assets from creditors and litigants.
Special needs planning is a factor for some people. You have to be careful about the way you set aside money for a person with a disability who is relying on government benefits like Medicaid and Supplemental Security Income.
People who are owners of small businesses are going to have estate planning concerns that differ from those who work for someone other than themselves.
These are just a few examples of the unique circumstances that require varied approaches.
Decision Makers
It is also important to include an incapacity component within your estate plan. The courts could, at considerable expense to your estate, appoint a guardian to manage your affairs if you don't take the appropriate action. This guardian may not be someone that you would have chosen.
You can select potential future decision-makers using an appropriate revocable living trust combined with a durable power of attorney.
All these solutions are best handled with a qualified estate planning law firm.
People that have assets that exceed the exclusion amount ($5.25 million in 2013) most certainly need to discuss tax efficiency strategies with a licensed estate planning attorney who places an emphasis on wealth preservation.
However, there are those who the only reason someone would meet with an estate planning lawyer is to avoid taxes. They may reason that because their estate is less than the exclusion amount, there is no need for estate planning. In fact, there are myriad concerns that can be addressed with a properly constructed estate plan that have nothing to do with tax exposure.
One of these concerns could be long-term access to financial resources. You may be concerned about leaving lump sum inheritances to certain people on your inheritance list. After all, you won't be around to help if someone in the family was to burn through his or her inheritance too quickly.
A way to respond to this would be to convey assets into a spendthrift trust. You appoint a trustee, and this could be a family member, the trust department of a bank, or a trust company. This trustee will administer the funds according to your stated wishes and distribute assets to the beneficiary in a measured fashion. The beneficiary will not be able to control the principal, which also means their creditors would not have access, either.
This is only one possible scenario. There are many others, including planning for blended families and providing for a family member with special needs without jeopardizing disability benefits.
Arranging for the transfer of your financial assets to your loved ones is a profound act. It is something that is best undertaken with the benefit of professional guidance.
The estate planning process involves a number of different facets, including matters that the typical layperson may not consider. When you know the facts you understand why certain courses of action are recommended by estate planning and elder law attorneys.
On the other hand, when you harbor misplaced notions you may fail to act or take incorrect courses of action. With this in mind we would like to highlight two misplaced notions that can lead to negative consequences.
Incapacity Is Unlikely
You may feel as though it is unlikely that you will ever become unable to make your own decisions. If you feel this way you should ask yourself if you expect to live until you are at least 65.
If you say yes to the above, and you are correct and you do reach the age of 65, it is likely that you will live to the age of 80 at minimum.
Alzheimer's disease is very common among the elderly. 13% of those who are 65 years of age and older have Alzheimer's, and if you confine the sample to those 85 and up you are looking at a figure of 45%.
Given the likelihood of Alzheimer's disease or other forms of dementia, having durable powers of attorney naming agents to act on your behalf the event of your incapacity is important. Having a living trust is an even better plan.
I Don't Need a Trust
There are those who don't even consider the possibility of creating a living trust because they feel as though trusts are for very wealthy people. Of course, wealthy individuals and families should have a living trust at a minimum, but even those with modest means can benefit.
Living trusts are used to facilitate asset transfers outside of probate. Probate is the process of estate administration, and because it is done through the courts, it is time-consuming and often costly. If you create a living trust your heirs will receive their inheritances in a timely manner because these transfers are not subject to the probate process.
