Guest Column: Legal documents protect financial, medical interests

Baby boomers can look forward to a longer lifespan than their parents and grandparents.

The bad news is that many people are struggling with how to cope financially, emotionally and physically with busy lives that often include caring for aging parents.

Baby boomers are, for the most part, unprepared for their own futures. While they have much to do and think about, first and foremost, they must put their own legal affairs in order.

Making key decisions

Many boomers are so busy taking care of children and aged parents that they forget that they soon may face their own health problems.

Who will manage assets and make health care decisions for those who are incapacitated by an illness or accident? What if you and your spouse are both in a serious accident?

Without the appropriate legal documents in place, loved ones may have

a nightmare on their hands when it

comes to making health and financial decisions.

To ensure that one’s wishes for end-of-life health care and other medical decisions are carried out, directions need to be put in writing.

There are different ways this can be accomplished:

• A durable power of attorney is a document that allows individuals to designate a spouse, family member or friend to have legal authority to make decisions about health care and treatment in the event that the individuals are unable to act for themselves.

• A living will is a statement about preferences concerning “end-of-life” treatment in the event of a terminal illness.

Durable powers of attorney for health care and living wills must be witnessed and notarized.

Beyond health care, a durable power of attorney grants a legal right and power by the individual (the principal) to another party (the agent) who acts on behalf of the principal in financial and business matters. The agent can do whatever the principal may do, such as withdraw funds from bank accounts, trade stock, pay bills and cash checks.

This power, however, does not mean that the agent can take the principal’s money and run – funds must be used for the principal’s benefit.

Due to the complexity of probate laws and the individual needs of each person, durable powers of attorney for finances or health care should be drafted by attorneys who are experienced in elder law or estate planning.

Using forms downloaded from the Internet or borrowed from a friend can lead to disastrous consequences, including granting powers unintentionally or failing to provide powers that an agent will need in order to fully follow your wishes.

Leaving assets behind

Everyone needs a plan to transfer their property after death to loved ones with minimal loss to estate taxes, and that’s where estate planning comes into the picture.

Each person’s estate is unique, but any plan should provide for the distribution of assets upon death in a way that minimizes or eliminates taxes.

Some people only need a basic will, while others may need a living trust, especially where there are significant assets, real estate owned in multiple states, multiple marriages and children with former spouses.

It’s also important to plan for the future needs of disabled children or family members.

A special needs trust will allow a disabled person to receive assets from an estate without disqualifying them from receiving public benefits.

Missouri law also allows for the transfer of assets upon death to named beneficiaries by nonprobate transfers.

For example, personal property can be transferred to a designated beneficiary upon an individual’s death via “pay on death” designations on financial accounts, “transfer on death” designations on registered vehicle titles, and “beneficiary designations” on life insurance proceeds.

Most important, real estate can be transferred on death by simply recording, before death, a “beneficiary deed” naming the intended beneficiary of the property.

Any of the foregoing no-probate transfer designations remain revocable or changeable by you before your death as long as you are legally competent.

Remember, even a minimum amount of estate planning can result in huge financial and emotional savings for you and especially for your loved ones.

Dianne M. Hansen is an elder law attorney with Zerrer Elder Law Office LLC in Springfield, and is a member of the National Academy of Elder Law Attorneys. She may be reached at dhansen@ozarkselderlaw.com.[[In-content Ad]]