In the event of your incapacity, it’s crucial that you begin estate planning to set processes and prepare documents such as a last will and testament or revocable living trust to safeguard your assets. Congress determined that due to the importance and benefits estate planning has for Americans and their families, it was necessary to bring awareness to the cause. Thus, since 2008, the third week of October has been recognized as National Estate Planning Awareness Week. While the onset of COVID-19 did encourage a majority of us to begin thinking about the future, many American families are still severely lacking an effective estate plan with just one-third of adults in the U.S. having documented wills or trusts. If you assume that estate planning isn’t for you because you haven’t acquired mass wealth or several large assets, you’d be mistaken.
Estate planning is simply a way to protect your assets and your loved ones by creating legally valid documents that address a variety of concerns. These concerns often include ensuring that your money and property are protected, plans are in place in the event you become ill, and your assets are managed according to your wishes.
To begin the estate planning process, several considerations need to be made. Some of the things that will require your attention are whether or not you have a will or trust, your plans for powers of attorney, insurance coverage, and your existing accounts. Below, we will discuss these considerations more in-depth:
National Estate Planning Awareness Week is a great opportunity to get your own estate plan in place, but be sure to also reach out to your loved ones to ensure their future estate plans as well. Estate planning is often a difficult topic to broach because it brings the unpleasant topics of aging and death to the forefront of our minds. Here are a few tips to help you start the conversation:
Our estate planning and trust company in Reno, NV has been serving families and businesses throughout northern Nevada for over 25 years. As experienced estate attorneys, we are dedicated to providing you with the most current estate planning information and strategies to ensure your legacy for future generations. We’re able to prepare last will and testaments, revocable trusts, healthcare directives, and act as power of attorney in the case of your incapacitation. Contact us today to learn more about estate planning or sign up for one of our estate planning workshops.
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.
Many people know what a power of attorney is and why one might be needed. Or at least they think they do. Because of this, some may think that downloading a simple fill in the blank form found on the Internet will suffice. As with many “do-it-yourself” legal forms, the dangers of using one without first seeking legal advice can be many.
A property power of attorney, or POA, is a very serious and powerful legal document. Giving someone a POA may authorize the individual to handle your legal affairs. Most POAs that are found on the Internet are boilerplate documents that give the agent (person to whom you are giving authority) broad control over your affairs. This means the agent may be authorized to buy, sell, trade, convey or gift away your assets. He or she may be able to sign checks, withdraw money, transfer money or make important legal decisions on your behalf. Worse yet, some may not understand that a property POA will NOT include the power to make medical decisions on your behalf.
While the basic purpose of a POA may be easy enough to understand, many may not realize that there are different types of POAs used for different purposes. Furthermore, the language used in a POA will determine how much power or authority you grant the agent and which will determine how long the power will be granted. Talk to a qualified estate planning attorney about what your goals are and how to best accomplish them through a power of attorney.
A power of attorney, or POA, can be a helpful estate planning tool if used properly. Understanding what the purpose of a POA is, as well as the limitations, will be important for you and your designated agent. Following are some POA basics that can help with this discussion with your agent.
POAs are governed by state laws as are many other estate planning issues. Do not confuse a property POA with a living will, healthcare power of attorney or advanced directive. Although these estate planning tools are similar in nature to a property POA, they are created for the express purpose of giving your agent or healthcare provider the authority to make healthcare decisions for you in the event you cannot do so.
A POA can be designed to terminate upon your incapacity. If you want your agent to have authority that survives your incapacity, you must create a durable POA. Most states have very specific guidelines for what creates a durable POA. A springing POA authorizes your agent to act in your behalf only upon your incapacity. Specific language will need to be carefully included. You can grant broad powers to your agent under your POA. A qualified estate planning attorney can assist you in considering all the variations available to you before executing a POA.
Have you considered who would manage your financial afffairs if you became incapacitated? Married couples are sometimes under the impression that their spouse will automatically be given access to all the assets. This may not be the case. Assets that are titled jointly may be easily accessed but that is not always the case. Take for instance real property that is jointly titled. If the well spouse desired to refinance, obtain a secured loan or sell real property that is jointly owned a legal representative would have to be appointed to sign in behalf of the incapacitated spouse. A power of attorney may not adequately authorize an agent to handle these transactions. Then there is the issue of a retirement account or pension benefits solely in the name of an incapacitated spouse. In these cases, the well spouse, child or parent woul likely need to seek a court’s permission to access your assets taking a significant amount of time and money.
Often, when someone becomes incapacitated, assets that are needed by loved ones to maintain the household or pay bills are inaccessible when most needed. Even worse, a dispute can arise as to who should manage the assets which can prolong the process of obtaining a court order.
There are, however, a variety of estate planning tools that can be used to avoid the need for court intervention. Executing a comprehensive durable power of attorney or creating a revocable trust may also be viable options. With just a small amount of pre-planning on your part you can avoid a lengthy and costly court process in the event of your incapacity.
A Power of Attorney (POA) is a document that allows you to give authority to someone you trust to act on your behalf. This document is frequently seen in real estate dealings and brokerage accounts, but they also play a big part in your estate plan.
If you were to become disabled, you’d want to have someone who could speak on your behalf with regard to medical treatments and someone who could take over your financial affairs. A Healthcare POA can handle the medical issues and a Property POA can see to it that your finances are in order.
A Power of Attorney only works for you if it's “durable." A durable POA means that these documents are not automatically revoked in the event you become mentally disabled.
To make a POA durable, you have to properly state that intention in the document itself. The statutes in Nevada recommend the language that should go into the document.
To learn more about a Powers of Attorney or you need help setting one up, get in touch with the experts at Anderson, Dorn & Rader.