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When people hire us to perform estate planning, they almost always do so with a focus on what will happen to their assets upon their death. What most people don’t realize is that the planning that happens regarding decision making while we are alive is significantly more likely to prevent fighting, reduce stress and improve everyone’s quality of life.
As we age, there are a number of things that can impact our ability to make decisions. Without a proper plan, an inability to make decisions for ourselves can lead to the necessity for probate in the form of guardianship or conservatorship. We have written ad nauseum about the reasons that you want to avoid probate at death—but the exact same considerations make us want to avoid probate during our lifetime as well. Not having the right decision making documents can create numerous problems.
When planning is done correctly, a client will have a minimum of two documents (here at Philipps & Graham we incorporate a few more just to be thorough). The two primary documents are a health care advanced directive and a general durable power of attorney. These documents both rely upon a designated individual to make decisions on behalf of the person signing the documents. The person making decisions is known as the “Agent”.
If you are ever asked to be someone’s Agent in one of these documents, it is a big deal and it is important you understand your job responsibilities.
The primary duty of an Agent in a power of attorney is to follow the wishes of the principal who signed the document, as those wishes have been spelled out in writing. For the health care advanced directive, it includes making medical decisions when the principal is unable to make his/her own medical decisions.
For the general durable power, it can be a wider variety of responsibilities that can include:
Holding, managing, investing, and spending the assets of the individual in a way that focuses on their best interest.
Filing tax returns and managing things like homeowner’s insurance and other related services.
Avoiding conflicts of interest, not commingling assets belonging to the Agent with assets belonging to the principal, and at all times, acting in good faith.
Maintaining records and keeping track of transactions involving the individual’s personal finances.
If someone asks you to be an Agent for them in a health care advanced directive or general durable power of attorney—that means they really trust you. Having these documents is critically important to protecting your assets and independence as you age or face challenges that life throws at you. Picking the wrong person can be a catastrophe though because these individuals acting as your Agent have broad authority and discretion to act on your behalf.
So, take care to pick the right people to assist you and make sure you leave them a very well drafted written document to guide how they help you if/when that time comes.
If you are an Ohio resident and need assistance with your plan for the future, please contact us at 614-760-1801 to schedule a consultation.
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