Welcome to the dawn of 2021! Most of us will leave 2020 without any hesitation. 2020 wasn’t the best year for most of us. But you have a chance to start 2021 and you’re ready for anything. You can do the responsible thing and get your property plan in order.
The turbulent events of 2020 show how important it is to organize your planning. Millions have fallen seriously ill from the Corona virus. Many of them died. When they are sick, those who have made a property plan can focus on more important things, such as spending precious time with loved ones.
Although we hope that 2021 will be much better than 2020, it is important that we start right, by putting a real estate plan in place.
What is a real estate plan? At its simplest, it is a set of instructions on how you want to handle your affairs if something happens to you. It’s a message that shows your loved ones that you care about them. A basic estate plan includes a Medicare general power of attorney, a permanent power of attorney, a HIPAA authorization, a will, and usually also a trust.
First, what is a power of attorney? It is a document by which you designate someone as an “agent” to act on your behalf. If that agent is unwilling or unable to act, the document can designate one or more successor agents. In other words, you are giving another person (the agent) powers that you already have. With a financial power of attorney, otherwise known as a permanent general power of attorney, you appoint your agent to make financial decisions on your behalf. Power can be formulated to be “instant”. In other words, the agent will have the ability to make decisions about your financial assets on the spot and without regard to your ability to make those decisions on your own. In most states, you can make the force “pop”, that is, it will only become effective on you Not The ability to act for yourself because of helplessness. The power of attorney is “permanent” if it continues even though you have a disability. A non-permanent power of attorney will not allow your agent to act while you are incapacitated.
A public health care power of attorney appoints an agent to make medical decisions for you when you are unable to do so on your own. The HIPAA license designates an agent to access protected health information.
It is important that you keep your legal representations up to date so that you have the people you want as your attorneys. The agents you choose under your power of attorney are vital to your disability plan. Make sure to retain the right people in these roles.
Without a will, the assets in your name are shown as provided by the State Wills Act. This is usually not exactly what you want. A will allows you to choose who and how you want your assets to go. It also allows you to name whom you wish to handle your possessions after your death. If you have minor children, your will allows you to designate guardians to look after them.
Both wills and wills are subject to a public will investigation procedure. Depending on the situation, this can be a lengthy and expensive process. If you want to avoid a will and preserve your privacy, you can use a trust. Through the Trust, you can transfer assets to the Trust during your lifetime and you can manage them as a trustee. This allows you to avoid the probate process because the trust does not die. Trust has the added benefit of making disability easier. Due to fraud cases, organizations often get to know the subsequent trustee acting on your behalf more than the agent under your power of attorney.
Hopefully 2021 will be better than 2020. Even a basic real estate plan will allow you to face whatever 2021 has in store for you. Resolve now to get your estate planning done this year, sooner rather than later.
Stephen C. Hartnett, JD, LLM
American Academy of Estate Planning Lawyers, Inc.
9444 Balboa Street, Suite 300
San Diego, CA 92123
Phone: (858) 453-2128