Parents living longer than ever.[1] The first generation of baby boomers have turned 70. Cases of Alzheimer’s and dementia are on the rise.[2] Health care costs are increasing. We oftentimes get calls from adult children who want to hire us to “get power of attorney over their parent” to help them with bills and medical care. Unfortunately, that is not the way a power of attorney works. While the adult child can certainly schedule the appointment with us and even pay for the legal document, it is the parent’s document, and the parent is the client. Attorneys are confined to the parent’s wishes. If the elderly parent already lacks the capacity to enter into a contract or make legal decisions, or if the parent does not understand the effect of the power of attorney document, it is too late for the adult child to be named as their parent’s agent under a power of attorney. If the elderly parent lacks capacity and needs help handling his or her affairs, the adult child may need to become legal guardian. What the differences between Power of Attorney & Guardianship? With a power of attorney, the principal names an agent to act on the principal’s behalf in the event of incapacity. It enables the agent to handle the principal’s business and financial affairs. A health care power of attorney is a separate document that names an agent to act on behalf of the principal for medical decisions. The agent’s powers are very broad unless expressly limited by the documents. However, there is nothing preventing the principal himself from conducting business on his own. With guardianship, a court makes a finding that the principal lacks capacity and removes that individual’s authority to make decisions.[3] The court appoints a guardian to make those decisions from then on out. Once an institution, like a bank, learns of the guardianship, it would not be permitted to listen to the principal’s instructions – only the guardian’s.[4] The court’s order is permanent until the principal regains capacity and a subsequent hearing is held to restore his or her rights. Guardians have to file reports and/or yearly accountings with the court. As you can see, guardianship is not to be taken lightly. A court’s adjudication of incompetency essentially strips away a person’s rights, which is why we recommend getting power of attorney documents in place before capacity becomes an issue. It is also more work on the guardian’s part due to the court proceedings and reporting requirements. Readers should not only get their documents in place but talk to their parents or other elderly loved ones and encourage them to visit with an attorney before incapacity becomes an issue. [1] http://abcnews.go.com/Health/story?id=118056. [2] http://www.alz.org/facts/. [3] There are three types of guardians: guardian of the estate (authority over property), guardian of the person, or general guardian (both estate and person). [4] Unless the court orders a limited guardianship allowing the principal to retain certain legal rights and privileges to which the ward was entitled before the ward was adjudged incompetent.
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It is important for newlyweds to have wills drafted for several reasons. First, most of the property that you each own is going to be separately owned in the beginning. Under the laws of North Carolina, if you pass away without a will, your surviving spouse is not always entitled to 100% of your property. If you want to guarantee that your spouse is going to inherit everything, you’re going to need a will. Also, for singularly-owned property, your spouse will not be able to handle your affairs in the event of your unavailability or incapacity without a durable power of attorney, and an estate planning attorney can assist you with that as well.
Once married couples start consolidating bank accounts or buying real estate together, this is less of a concern. For jointly owned property, when one person passes, the other person automatically owns the property without there being any need for a will. Secondly, some important clauses included in a will can ease the burden on your spouse in the event you do pass away. For example, you can draft a will that waives the bond requirement. That is a huge burden lifted – your spouse will not have to pass a credit check and pay a bond premium to administer your estate. Your will can include provisions allowing your spouse to sell your property without court approval; again, your spouse will benefit from not having to pay an attorney to get a court order. Third, if you are blending families, the only way to leave property to someone not related by blood or a step-child is to gift it to them in a will. Another benefit to seeing an attorney to discuss your estate plan after you’ve recently been married is to ensure that your beneficiary designations are all up to date. You’ll want to change your beneficiary on life insurance policies and retirement plans, for example, to your new spouse. Finally, a discussion with an attorney about probate and the benefit to owning joint property cannot be understated if you’re bringing a lot of debt into the relationship. While your spouse is not responsible for your student loan debt, for example, your estate will be – there may need to be some planning involved to pass along property to your spouse instead of your creditors. You may also be able to plan your estate so that probate could be avoided entirely! If you’re newly married and want to ensure your spouse is protected in the future, the attorneys at Jesson & Rains can help you. If I had to pick one thing that is a “hot topic” right now in the estate planning field is “digital assets.” Digital assets are anything involving the internet or mobile devices, including family photos on an iPad, e-mail accounts, and social media accounts.
Did you know that some social media and e-mail providers value and protect privacy so much that they will not allow a family member or executor of an estate to access the deceased person’s social media account or email account? The law historically responds much slower than technology grows. Thirty years after the creation of the “world wide web,” states are starting to pass digital asset laws that treat digital assets like tangible personal property that can be passed on to others or, at the very least, settled and administered by an executor. North Carolina recently passed one such law. However, it remains to be seen how well social media and email providers respond to the law. In the meantime, here is what you can do to ensure that you have control over what happens with your social medial and email accounts. I have picked Facebook and Gmail because they are the largest providers in their respective platforms. However, almost all social media and email providers have something similar as listed below.
A few weeks ago, viewers across North Carolina were shocked when they saw a story on the news about a mother, Rae Stone, and her son, Forrest. Forrest had just turned 18 when he was involved in a snowboarding accident that left him in a coma. The Virginia hospital treating Forrest would not allow his mother to make medical decisions on his behalf or access his medical information due to HIPAA. According to the news story, the doctors at the hospital were the ones who were deemed to be the decision makers.
Clients in North Carolina want to know: Would this happen in North Carolina? The answer is maybe. In North Carolina, the following people, in this order, are authorized to consent to medical treatment on behalf of an incapacitated patient: (1) A health care agent appointed pursuant to a valid health care power of attorney[1] (unless the court has appointed a guardian and suspended the health care agent’s power); (2) A court-appointed guardian; (3) An attorney-in-fact, with powers to make health care decisions for the patient;[2] (4) The patient's spouse; (5) A majority of the patient's reasonably available parents and children who are at least 18 years of age; (6) A majority of the patient's reasonably available siblings who are at least 18 years of age; or (7) An individual who has an established relationship with the patient, who is acting in good faith on behalf of the patient, and who can reliably convey the patient's wishes. (8) The patient's attending physician.[3] Therefore, if a power of attorney or guardianship does not exist, in the event your unmarried child is incapacitated, you should be able to consent to their medical treatment in North Carolina. If you are married, you should be able to consent to your spouse’s treatment if they become incapacitated. Given the North Carolina statute, is there any reason why I should fill out a health care directive or appoint my loved one as my power of attorney? Yes.
[1] Power of attorney for the sole purpose of making medical decisions on your behalf, or a health care agent named in your advanced health care directive (which outlines your wishes in the event you become incapacitated).. [2] Power of attorney over health care decisions (as you appoint). [3] N.C.G. S. § 90-21.13. |
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