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Estate Planning & Divorce – Protecting Your Assets & Heirs

No one has divorce in mind when they step up to the altar and say the words, “I do.” However, 40-50% of marriages still end in divorce. Your estate plan changes drastically after you divorce from potential custody implications to splitting up assets and the impact of complicated tax laws. This change in status necessitates an update in your documents.

A major relationship change, such as a divorce, may not only threaten your assets, but may impact your future healthcare decisions or the assets you pass on to your heirs. By customizing your estate plan and living trust, you can rest in the confidence that your wishes, during your life and after, will be honored.

Following the next steps can help protect you and your family after your divorce:

Retain a copy of your Divorce Agreement. Ensure your estate planning attorney has a copy of your Divorce Agreement. Your attorney should be aware of all obligations you and your ex-spouse have to one another and what happens in the event of death. Your estate plan should be updated for the correct distribution of assets as well as protecting the inheritance and plans you have for your children.

Consider a plan for remarrying. Your estate planning attorney can also help you in the event of remarriage. While a prenuptial agreement may also be something to consider for the future, your updated estate plan will take into account your new spouse, any children, etc.

Update your Power of Attorney & Executor/Trustee. In the event you are incapacitated or pass away, make sure you have designated the correct executor of your estate as well as power of attorney for your healthcare decisions.

Create a plan and trust for your children. If you and your ex have divorced, do your children have a plan in place should you pass away? It’s time to consider who serve as guardian to your child(ren), as well as managing their finances until they turn eighteen.

Double-check your beneficiaries. After a divorce, it is imperative you assign the correct beneficiary to your retirement accounts such as your life insurance plan, 401k, and IRA. You can avoid unnecessary litigation and complication by making sure you have the correct person in place before the need for them arises.

A savvy estate planning attorney will take into account your individual situation and ask questions to customize your trust to your wishes. Not all trusts are created equal, and a good trust protects you against creditors, predators and yes, divorce too. For more information, contact our team today or attend one of our FREE seminars for a FREE consultation with an attorney.

GRANTING DURABLE POWER OF ATTORNEY AND NOMINATING A CONSERVATOR

Please do not be confused by the term “power of attorney.” Many clients believe this term has something to do with the lawyer preparing their estate plan. Clients sometimes mistakenly fear that they are giving over some kind of power to their lawyer to make decisions for them. This is not true.

When you grant “durable power of attorney” to another person—any other person—you are designating that person as your agent, to act on your behalf. This may be your spouse, your child, a friend, or anyone, as long as he or she is an adult (eighteen or older) and not under a conservatorship or incarcerated. Now and then, someone may indeed choose an attorney for their agent, which adds confusion to the term.

“Durable” means “continuing even when you are incapacitated.” Indeed, these documents are generally written so that these powers are only granted while you are incapacitated and unable to act on your own. These are called “springing” powers of attorney, because they spring into action upon your incapacity.

If you are elderly or facing a long-term illness, you may consider gently easing someone you trust into the role of your “agent,” helping you through powers of attorney, over a period of time. This might be a sibling, a spouse, a child, or someone else you truly trust. This person should understand that if you have a stroke or other sudden decline, they will have to jump in with both feet.

If you think you may someday need to go further, and give full control to someone as conservator, you should nominate a person for that job too. This nomination is contained in the durable power of attorney for property (conservator of the estate nomination) and in the advance healthcare directive or durable power of attorney for healthcare (conservator of the person). These nominations may also be available in a separate document—apart from the durable powers of attorney for property or healthcare.

If it came to the need for a conservatorship—if, for example, you became a danger to yourself or others—a court would have to investigate and confirm your nomination. Your nominee would have to go through a criminal background check, a credit check, and more. But you would have had primary input. If you have not made a nomination, state laws indicate a priority of appointment typically based on your family tree and the laws of “intestate succession.”

Regardless of the situation, clear your decision with your designees and nominees while you still can. It’s a heavy responsibility to take on either power of attorney or to become a conservator, and you want to make sure everyone will agree to serve.

Do not surprise a loved one with this responsibility when you are hit by a car. For one thing, they may say no.

If you are the person caring for someone with a mental incapacity, you may at some point have to consider a conservatorship. Sometimes, you simply have no other choice.

I know a woman who is taking care of her husband with dementia. He had always been a loving and gentle husband and father. But the disease is destroying his judgment, and little by little he is becoming violent. Recently, when they were in the drive-through line at a burger place, he just randomly let loose and clocked her. Knocked her out cold.

Now, it is truly her responsibility to go to court and apply for a conservatorship to have him institutionalized against his will. It happens.

DURABLE POWER OF ATTORNEY FOR PROPERTY

In Mistake #9, we learned that living trusts are not generic, cut-and-paste documents. The same is true with power of attorney documents. For starters, you will be asked to grant separate powers for property and for healthcare decisions.

When you grant property power to your agent, you are authorizing this person to make decisions about your property and your finances while you are incapacitated—and to take specific responsibility for paying your bills, maintaining your online accounts, contributing to, managing, or withdrawing from your IRA, and the thousand other financial responsibilities we all face.

You may or may not, however, want this same person making healthcare decisions for you.

DIVIDED POWERS FOR PROPERTY

You should also understand that even powers of attorney for property may be best divided.

If you own a business, you may want a different person to make business decisions during your incapacity than the person making your personal financial decisions.

You may want a different person making your investment decisions than the person handling your day-to-day finances.

You may also want to grant powers of attorney which are not durable, but end when you lack capacity. This may prevent, for example, a business partner from taking some action while you are out with a stroke.

Nondurable powers may empower a spouse or a business partner to make crucial decisions every time you are on vacation in remote locations, and then disempower them again when you return.

Another important question involves gifting. Most power of attorney documents I have seen do not include gifting authority—in other words, the agent you name during your incapacity generally does not have the right to give away your property to anyone else.

However, the power for one spouse to make a gift of their assets to another may be crucial in public assistance benefit planning, as you will see under “Monetary Fallbacks for Disability,” below.

Work closely with your attorney to discuss these decisions and craft these documents. Consider your choices carefully—they may be the most important choices you ever make.

POWER OF ATTORNEY FOR HEALTHCARE

If you are incapacitated with an illness, even if you are just under sedation for an hour-long operation—who do you trust to have your best interests at heart and make the right calls with doctors? Approve treatments? Argue with hospitals to keep you longer?

If you lose mental capacity due to stroke, dementia, Alzheimer’s, Parkinson’s, or other common conditions, who do you trust to move you from nursing facilities to home and back again?

Every one of us should choose a trusted person, discuss the responsibilities with that person, and update your choice as often as necessary. The power to make medical decisions for us when we cannot do so is called a “durable power of attorney for healthcare,” and is granted through a pretty straightforward document.

The document says simply, “If I cannot make healthcare decisions for myself, then this person or these people can make them for me.” You can name more than one person to serve jointly, or you can name them to serve consecutively. If this person cannot serve, then the power falls to the next, and etc.

Once again, a “power of attorney for healthcare” has nothing to do with the attorney writing the document. You can grant the healthcare power of attorney to anyone.

If you have a primary residence in one state and a vacation home in another, we recommend to our clients that they create a durable power of attorney for healthcare for each state, because a lot of the related laws are state-specific.

HIPAA AUTHORIZATION

A second document works closely with the power of attorney for healthcare decisions.

The Health Insurance Portability and Accountability Act (HIPAA) created significant restrictions on who has access to your healthcare information. Although it boosted privacy, it also created barriers to swift decision-making and intervention by loved ones. If a doctor or hospital divulges your health information to someone without the proper authorization, they face huge fines—as much as $50,000 per violation, in some situations.

As a result, all health professionals and organizations take HIPAA rules very seriously.

The HIPAA authorization you sign gives authority to one or many people to have full access to your health information. As previously discussed in the Introduction, you may want to expand this authorization well beyond the person you have granted your power of attorney for healthcare. For example, you may want a home healthcare worker to be able to call up and check on your prescriptions, even if you don’t want this person to make major medical decisions for you.

Think through your HIPAA authorizations carefully with an expert lawyer. In some cases, for example, you may want to have separate HIPAA authorization documents for different people and circumstances.

Although HIPAA is a federal law, there is no federal HIPAA form. Each state has its own. In my home state of California, for example, a HIPAA authorization must be printed in fourteen-point type to be valid!

LIVING WILL AND ADVANCE HEALTHCARE DIRECTIVES

A “living will,” sometimes known as an “advance healthcare directive,” tells medical personnel, loved ones, and the person you have given power for healthcare decisions your preferences for medical care in dire circumstances, “in advance.” A living will generally comes into play only when you are in the late stages of a fatal illness, fall into a coma, or have suffered an extremely serious injury.

Please do not confuse “living will” with “living trust.” They are completely unrelated documents, with different purposes.

In most cases, the goal of a living will is to give permission to loved ones to let you pass away in order to avoid unnecessary suffering. Most living wills say, in essence, “If I’m a goner, let me go.”

When my grandmother had a heart attack, my grandfather called the paramedics. It was a massive heart attack. The paramedics rushed over, got out their paddles, and shocked her heart back to life. Then they put her on a ventilator and took her to the hospital. But she never recovered consciousness, and never showed signs of recovering the ability to breathe on her own. The doctors said there was no hope, and indeed, when I looked at her, I could see that her soul had probably already left her body.

My grandmother had created no living will and had never even discussed this possibility, so the decision to terminate life support was made even more difficult for my father and his two older brothers. After a week, my father and his brothers made the agonizing choice to terminate life support. Ten years later, my father still asks me, “Did I do the right thing?”

I tell him that I was very close to my grandmother. And then I say, “Of course, you did.” I say this because there really was no alternative. But the choice would have been much easier if she had made her own desires clear in a living will.

I will not go into all the specific details of a living will, such as how it relates to “Do Not Resuscitate (DNR)” and “Physician Orders for Life-Sustaining Treatment (POLST)” orders. Instead, I refer you to your attorney. Just make sure you get the appropriate legal and medical advice.

For more information or to receive a consultation with one of our attorneys, attend one of our FREE seminars.

AVOIDING A CONSERVATORSHIP

Since incapacity before death is an 80 percent probability, you should plan for it. And you should plan to avoid a conservatorship if at all possible.

A conservator, sometimes called a “guardian,” will have much more power than someone with “power of attorney.” Once a conservator or guardian has been appointed over you by a court, you lose your liberty, along with considerable rights over your life. Someone else will tell you where to live, who to visit, and when. You won’t vote anymore. If you are a gun owner, they’ll take away your guns, too.

Once a conservator has been named, he or she will have the power to ask the court to confine you to an institution against your will. They will have the power to make all medical and financial decisions for you, and you will lose the power to make these decisions for yourself and take full control of your affairs.

You may have no input on who is named conservator by a court. Why? Because you will have been found incompetent to make such decisions.

It’s likely that one of Jack’s relatives will be appointed conservator, but Jack could have prevented much of this family strife, hassle, and expense simply by hiring an attorney to create a proper estate plan which took into account the very high probably we all face of incapacity.

If he trusted Mary, he could have named her as trustee for his living trust in case of his incapacity (see below). As trustee, she would have had immediate access to his accounts and his investments. Whether or not her decision to fly him to Boston proved best in the long run or not, the decision would have been made without lawyers, legal expenses, or bitter court proceedings.

Which means there might have been enough money left over to do it right. Plus, everyone might still be getting along.

With a proper estate plan that takes into account disability, people don’t have to argue about who is in charge, and the person in charge has the power to take the necessary and immediate actions.

Let’s look at all the documents you need to put together with your attorney to plan ahead.

EVERYONE NEEDS THESE DOCUMENTS

Earlier in the book we outlined the basic documents that make up an estate plan. Please flip back to the Introduction for the detailed summaries.

You should consult with an expert attorney because you may need every one of these documents in place, not just at the time of your death, but during any disability.

As I said before, every adult over the age of eighteen should have at least the first three documents below signed and available at all times. Any adult with assets, and certainly any adult with children, should have all the documents available and updated throughout their lives. At a minimum, these documents include:

  •    Durable Power of Attorney for Property
  •    Advance Healthcare Directive (Power of Attorney for Healthcare)
  •    HIPAA Authorization
  •    Living Will
  •    Living Trust
  •    “Pour-Over” Will

As you have seen in the case of Jack and his family, the failure to create all of these documents added considerable confusion, strife, and expense to an already-difficult health situation. It also led to an unnecessary legal process and the loss of his rights through a conservatorship.

Let’s see how these documents function during a disability.

GRANTING DURABLE POWER OF ATTORNEY AND NOMINATING A CONSERVATOR

Please do not be confused by the term “power of attorney.” Many clients believe this term has something to do with the lawyer preparing their estate plan. Clients sometimes mistakenly fear that they are giving over some kind of power to their lawyer to make decisions for them. This is not true.

When you grant “durable power of attorney” to another person—any other person—you are designating that person as your agent, to act on your behalf. This may be your spouse, your child, a friend, or anyone, as long as he or she is an adult (eighteen or older) and not under a conservatorship or incarcerated. Now and then, someone may indeed choose an attorney for their agent, which adds confusion to the term.

“Durable” means “continuing even when you are incapacitated.” Indeed, these documents are generally written so that these powers are only granted while you are incapacitated and unable to act on your own. These are called “springing” powers of attorney, because they spring into action upon your incapacity.

If you are elderly or facing a long-term illness, you may consider gently easing someone you trust into the role of your “agent,” helping you through powers of attorney, over a period of time. This might be a sibling, a spouse, a child, or someone else you truly trust. This person should understand that if you have a stroke or other sudden decline, they will have to jump in with both feet.

If you think you may someday need to go further, and give full control to someone as conservator, you should nominate a person for that job too. This nomination is contained in the durable power of attorney for property (conservator of the estate nomination) and in the advance healthcare directive or durable power of attorney for healthcare (conservator of the person). These nominations may also be available in a separate document—apart from the durable powers of attorney for property or healthcare.

If it came to the need for a conservatorship—if, for example, you became a danger to yourself or others—a court would have to investigate and confirm your nomination. Your nominee would have to go through a criminal background check, a credit check, and more. But you would have had primary input. If you have not made a nomination, state laws indicate a priority of appointment typically based on your family tree and the laws of “intestate succession.”

Regardless of the situation, clear your decision with your designees and nominees while you still can. It’s a heavy responsibility to take on either power of attorney or to become a conservator, and you want to make sure everyone will agree to serve.

Do not surprise a loved one with this responsibility when you are hit by a car. For one thing, they may say no.

If you are the person caring for someone with a mental incapacity, you may at some point have to consider a conservatorship. Sometimes, you simply have no other choice.

I know a woman who is taking care of her husband with dementia. He had always been a loving and gentle husband and father. But the disease is destroying his judgment, and little by little he is becoming violent. Recently, when they were in the drive-through line at a burger place, he just randomly let loose and clocked her. Knocked her out cold.

Now, it is truly her responsibility to go to court and apply for a conservatorship to have him institutionalized against his will. It happens.

DURABLE POWER OF ATTORNEY FOR PROPERTY

In Mistake #9, we learned that living trusts are not generic, cut-and-paste documents. The same is true with power of attorney documents. For starters, you will be asked to grant separate powers for property and for healthcare decisions.

When you grant property power to your agent, you are authorizing this person to make decisions about your property and your finances while you are incapacitated—and to take specific responsibility for paying your bills, maintaining your online accounts, contributing to, managing, or withdrawing from your IRA, and the thousand other financial responsibilities we all face.

You may or may not, however, want this same person making healthcare decisions for you.

DIVIDED POWERS FOR PROPERTY

You should also understand that even powers of attorney for property may be best divided.

If you own a business, you may want a different person to make business decisions during your incapacity than the person making your personal financial decisions.

You may want a different person making your investment decisions than the person handling your day-to-day finances.

You may also want to grant powers of attorney which are not durable, but end when you lack capacity. This may prevent, for example, a business partner from taking some action while you are out with a stroke.

Nondurable powers may empower a spouse or a business partner to make crucial decisions every time you are on vacation in remote locations, and then disempower them again when you return.

Another important question involves gifting. Most power of attorney documents I have seen do not include gifting authority—in other words, the agent you name during your incapacity generally does not have the right to give away your property to anyone else.

However, the power for one spouse to make a gift of their assets to another may be crucial in public assistance benefit planning, as you will see under “Monetary Fallbacks for Disability,” below.

Work closely with your attorney to discuss these decisions and craft these documents. Consider your choices carefully—they may be the most important choices you ever make.

POWER OF ATTORNEY FOR HEALTHCARE

If you are incapacitated with an illness, even if you are just under sedation for an hour-long operation—who do you trust to have your best interests at heart and make the right calls with doctors? Approve treatments? Argue with hospitals to keep you longer?

If you lose mental capacity due to stroke, dementia, Alzheimer’s, Parkinson’s, or other common conditions, who do you trust to move you from nursing facilities to home and back again?

Every one of us should choose a trusted person, discuss the responsibilities with that person, and update your choice as often as necessary. The power to make medical decisions for us when we cannot do so is called a “durable power of attorney for healthcare,” and is granted through a pretty straightforward document.

The document says simply, “If I cannot make healthcare decisions for myself, then this person or these people can make them for me.” You can name more than one person to serve jointly, or you can name them to serve consecutively. If this person cannot serve, then the power falls to the next, and etc.

Once again, a “power of attorney for healthcare” has nothing to do with the attorney writing the document. You can grant the healthcare power of attorney to anyone.

If you have a primary residence in one state and a vacation home in another, we recommend to our clients that they create a durable power of attorney for healthcare for each state, because a lot of the related laws are state-specific.

HIPAA AUTHORIZATION

A second document works closely with the power of attorney for healthcare decisions.

The Health Insurance Portability and Accountability Act (HIPAA) created significant restrictions on who has access to your healthcare information. Although it boosted privacy, it also created barriers to swift decision-making and intervention by loved ones. If a doctor or hospital divulges your health information to someone without the proper authorization, they face huge fines—as much as $50,000 per violation, in some situations.

As a result, all health professionals and organizations take HIPAA rules very seriously.

The HIPAA authorization you sign gives authority to one or many people to have full access to your health information. As previously discussed in the Introduction, you may want to expand this authorization well beyond the person you have granted your power of attorney for healthcare. For example, you may want a home healthcare worker to be able to call up and check on your prescriptions, even if you don’t want this person to make major medical decisions for you.

Think through your HIPAA authorizations carefully with an expert lawyer. In some cases, for example, you may want to have separate HIPAA authorization documents for different people and circumstances.

Although HIPAA is a federal law, there is no federal HIPAA form. Each state has its own. In my home state of California, for example, a HIPAA authorization must be printed in fourteen-point type to be valid!

LIVING WILL AND ADVANCE HEALTHCARE DIRECTIVES

A “living will,” sometimes known as an “advance healthcare directive,” tells medical personnel, loved ones, and the person you have given power for healthcare decisions your preferences for medical care in dire circumstances, “in advance.” A living will generally comes into play only when you are in the late stages of a fatal illness, fall into a coma, or have suffered an extremely serious injury.

Please do not confuse “living will” with “living trust.” They are completely unrelated documents, with different purposes.

In most cases, the goal of a living will is to give permission to loved ones to let you pass away in order to avoid unnecessary suffering. Most living wills say, in essence, “If I’m a goner, let me go.”

When my grandmother had a heart attack, my grandfather called the paramedics. It was a massive heart attack. The paramedics rushed over, got out their paddles, and shocked her heart back to life. Then they put her on a ventilator and took her to the hospital. But she never recovered consciousness, and never showed signs of recovering the ability to breathe on her own. The doctors said there was no hope, and indeed, when I looked at her, I could see that her soul had probably already left her body.

My grandmother had created no living will and had never even discussed this possibility, so the decision to terminate life support was made even more difficult for my father and his two older brothers. After a week, my father and his brothers made the agonizing choice to terminate life support. Ten years later, my father still asks me, “Did I do the right thing?”

I tell him that I was very close to my grandmother. And then I say, “Of course, you did.” I say this because there really was no alternative. But the choice would have been much easier if she had made her own desires clear in a living will.

I will not go into all the specific details of a living will, such as how it relates to “Do Not Resuscitate (DNR)” and“Physician Orders for Life-Sustaining Treatment (POLST)” orders. Instead, I refer you to your attorney. Just make sure you get the appropriate legal and medical advice.

We are here to help you navigate all of these documents and create a plan that will help protect you in any situation. Attend one of our FREE seminars for a consultation with a licensed attorney.

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Estate Planning. It’s Not for Everybody. So Who’s It For?

CunninghamLegal – The Living Trust Lawyers

“Estate Planning” is a general phrase that most people associate with planning for the end of one’s life. While that basic definition is a good place to start, estate planning goes far beyond just planning for the distribution of assets upon death. It also includes planning for periods of incapacity, healthcare decision making, Medi-Cal planning, and more.

Despite its importance, not everyone has an estate plan. Since not everybody has an estate plan, it can be reasoned that estate planning is not for everybody. If it’s not for everybody, who is it for?

If you’re the type of person who prepares before leaving town, estate planning is for you.

Most people would not dream of taking a vacation of any duration without making arrangements for their responsibilities and what they hold dear. Bill paying, pet care, home security, giving someone the power to make decisions, etc. are all topics that cross our minds when going away for a week or more. Estate planning is a process through which a person can, in a similar but formalized manner, prepare for life’s unplanned events.

During a period of incapacity, an estate plan allows a person to select who will act on their behalf, how their assets will be controlled and who will participate in medical decision making. Upon passing away, an estate plan allows a person to direct important outcomes, such as: guardianship of minor children, who will care for pets, and distribution of assets. The same foresight that people apply prior to travel can be formalized in an estate plan to thoroughly prepare for whatever lies ahead.

If you’re the type of person who likes to have control over your assets, estate planning is for you.

It has been said that even those without an estate plan, actually do have an estate plan. The problem with the default plan is that it is provided by the government through statutes. A person without their own estate plan who becomes incapacitated is likely to be the subject of a court-ordered conservatorship. A person who passes away without their own estate plan will have their assets administered through the statutory “one-size-fits-all” distribution scheme under the oversight of the probate court.

Few people would consciously invite the government to make such important decisions on their behalf. Living trusts, pour-over wills, powers of attorney, and advanced healthcare directives allow a person to create a unique plan that prepares for their possible incapacity and eventual death based upon their particular circumstances without governmental interference.

If you’re the type of person who wants your financial legacy to be protected from taxes, estate planning is for you.

Tax consequences cause most people to get professional advice, prior to buying, selling, or gifting major assets. The same approach should be taken when considering the transfer of assets upon death.

Estate planning can prevent a person’s financial legacy from being reduced due to estate taxes, generation-skipping taxes and capital gains taxes. What may sound like a good idea (“I’m putting my children on the title to my house now, just in case something happens . . . ”) could cause a tax burden that an estate plan could have prevented.

Conclusion

Estate planning allows a person to create a unique plan to control their assets during their life, through periods of incapacity, and asset distribution after their death. Most people make a plan regarding their assets when just leaving town for a few days. Likewise, most people would rather not have the government control their assets and decision making upon incapacity or death and most people would not want to create a large tax bill simply due to lack of planning, or poor planning. Therefore, upon reflection, most people are likely to determine that estate planning is for them.

By: Doug Reeve. Doug can be contacted in our Camarillo office at (805) 484-2769. Doug’s profile is also found at: Doug Reeve

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Incapacity – Snow White and the Seven Steps

CunninghamLegal – The Living Trust Lawyers

Incapacity is generally defined as lacking the ability to make decisions for oneself. This can occur due to a mental impairment or a physical disability or illness, which prevents a person from having the ability to communicate their reasonable decisions to others. Like most people, Snow White did not know that she would become incapacitated. However, she did understand that proper estate planning doesn’t merely focus on transferring assets upon a person’s death. She knew that an estate plan should also prepare for the possibility that a person may become incapacitated and provide for control of assets and guidance for health care decisions during that time.

Snow White had been warned that the evil queen was out to get her. Despite the warning, she still took a bite of a poisonous (and possibly non-organic) apple. That one bite led to Snow White’s incapacity. She lay unconscious in the forest surrounded by non-CPR certified dwarves, while her real property and financial accounts seemingly had no guidance and medical professionals feared that there was no one who could speak on Snow White’s behalf.

Fortunately, Snow White had a thorough estate plan and she had taken the proper steps to ensure that during her period of incapacity, she didn’t lose control of her assets or medical decisions. The steps she followed were to:

1) Have a Revocable Living Trust: Snow White visited a qualified estate planning attorney who drafted a Revocable Living Trust as the cornerstone of her estate plan. The person she selected as her successor trustee will be guided by the provisions of the trust during Snow White’s period of incapacity.

2) Have a Durable Power of Attorney: A durable power of attorney allows for a person to act as the agent, or attorney-in-fact, on behalf of a person who is incapacitated. Snow White named the successor trustee of her trust to be her attorney-in-fact, thus this person has the power to manage assets that are inside or outside of the trust.

3) Decide When the Durable Power of Attorney Will Be Effective: The durable power of attorney can be effective immediately, upon the signing of an authorization by a person who still has capacity, or upon the occurrence of an event that causes a person’s incapacity. Snow White preferred that her durable power of attorney be effective immediately upon the signing of her estate plan, which means that her attorney-in-fact could act in her best interest anytime thereafter.

4) Create a List of Assets, Obligations and Accounts to Guide Your Successor Trustee and Your Attorney-in-Fact: It can be daunting to assume responsibility for another person’s assets and finances. It is recommended that you keep a current list of assets, obligations, and accounts to allow the people that you have nominated to seamlessly act on your behalf.

5) Have an Advance Health Care Directive: Also referred to as the “medical-power-of-attorney”, this document allows a person to be named as the health care agent and empowers them to make decisions on behalf of an incapacitated person.

6) Thoughtfully Select Who is Best Suited to Make Medical Decisions: It is important to select a health care agent who is comfortable speaking with medical professionals and advocating on behalf of the incapacitated person. Snow White selected the dwarf named Doc as her health care agent. His name indicates that he has a medical background and therefore would be comfortable discussing possible treatments and procedures with Snow White’s doctors.

7) Name People to Receive Medical Information (HIPAA Authorization): The Health Insurance Portability and Accountability Act requires that information relating to a person’s medical condition only be released to named “HIPAA agents.” Although Snow White wanted only one health care agent to make decisions for her, she authorized a handful of dwarves and family members to receive information related to her medical condition.

By following the steps listed above, Snow White’s assets were managed during her period of incapacity by people she had previously selected. Additionally, her health care agent was able to discuss and authorize her treatment. The experimental “kiss-by-a-prince” therapy proved successful and Snow White regained her capacity and her ability to control her assets and make her own health-care decisions. And by avoiding poisonous, non-organic apples, she was able to live happily ever after.

By: Doug Reeve. Doug can be contacted in our Camarillo office at (805) 484-2769.