I visited a couple that has lived in their home for 40 years. It’s obvious they are happy together. The wife called to ask me to come help her understand what she might do if her husband gets ill and can’t manage the finances. “I wake up in the middle of the night in a state of panic”, she shared.
We started talking through the basics. It’s easy to figure out where the gaps in plans are when you throw out a for instance. When I asked “Who would manage the bill payments and mind the Retirement Account if you had a car accident and needed a few weeks of rehab?” The husband didn’t have an answer. They have estate plans with powers of attorney set up, but they are over ten years old and his wife is telling him she doesn’t know where to begin if she had to pick up the reigns of the finances. He has a roster of their accounts and created a file for his burial, but no one has the practical knowledge to step in and manage while he recuperates.
We all need to create a practical back up plan. Just having a durable power of attorney (POA) for finances and a medical power of attorney for health care won’t cut it unless you have spent the time to educate the individuals you have named. Do they have a copy and do they know what to do to help you? If a Trust has been established and assets are named to the Trust that adds another level of complication — your Trustee, not your named POA is the only one with rights to control those documents.
For most adults, the two most important documents for everyone over 18 to have in place are financial and medical powers of attorney. Those powers impact you while you are living. Sadly, the stats from the Dept. of Health & Human services tell us that at minimum, 70 percent us over 65 will need someone to speak on our behalf while we are living.
For a cheap way to get this started, you can:
- Download a free copy of “Save or Shred” that includes a checklist of the important documents and details you need to gather, or
- Order a copy of MemoryBanc: Your Workbook for Organizing Life that will walk you through the process. This book was named book of the year by Today’s Caregiver and includes the information your loved ones would need to help you.
It won’t take long to get this together, but you need to start. Encouraged.
Having just learned from experience, having a financial POA won’t work if all of your property is in a trust. Only a trustee of the trust can sign or do business as the trust. A POA won’t override that, and you’ll need to have a lawyer do the paperwork to have your POA added as a trustee. My example–my parents have a trust, with both of them as trustees. My brother and I are listed as successor trustees, so we become co-trustees when both parents have died. My dad died, so my mom is left as trustee. All of their accounts/properties are under the trust name. My mom’s dementia is kicking in, and I’m her POA. But that’s a PERSONAL thing not a TRUST thing, so I still couldn’t sign on any of her accounts because I’m not listed as a trustee. Her lawyer(who has known her for 30 years) wrote up a Statement of Authority and now I’m allowed to sign for the trust accounts. The S of A has to be filed with the county, just like the trust paperwork, so it’s more of a hassle to get done than a POA.
Kay you are doing great work in helping so many people.
Thank you!