5 Common Misconceptions about a Power of Attorney

5 Common Misconceptions about a Power of Attorney

All, Probate & Estate, Wills

MISCONCEPTION #1. A power of attorney can be authorized at any time.

– I received a phone call asking me to draft a power of attorney. The caller said that she had just received certification from her father’s doctor stating that he is no longer competent. “Can you draft a power of attorney and living trust for my dad?” she asked. Unfortunately, I can’t do that. Once someone lacks legal capacity, they can no longer sign any legal document including a power of attorney or living trust, which of course is the purpose of the document. At this point, the only recourse is a guardianship proceeding through the courts, which can be extremely costly and time-consuming.

MISCONCEPTION #2. Power of Attorney documents are all the same. I’ll just download one from the web.

– Everyone’s circumstances are unique. Without guidance from an experienced estate attorney, a generic POA document could expose your estate to legal challenges and interjections. Unfortunately, when problems with a POA are discovered it’s usually too late.

MISCONCEPTION #3. A Power of Attorney grants the agent the right to make any decision that they choose.

– Within a POA the agent has an obligation to make decisions that are in the best interests of the principal. While the POA grants authority, the right to act is based on fiduciary circumstances. If the action is not in the best interests of the principal, the agent does not have the right to act. In fact, many people fear signing a POA because they are concerned that their agent will mismanage their estate. Although the fiduciary obligation offers protection, it is important to choose someone that you trust to be your agent.

MISCONCEPTION #4. There is one standard Power of Attorney; it covers everything.

– It is much more flexible than that. The principal determines what powers to grant their agent in the document, which is why it’s important that it be drafted by an experienced attorney.

  • A general power of attorney governs all powers covered by a power of attorney, such as buying or selling property or otherwise managing one’s assets.
  • A limited or special power of attorney can grant very precise authorizations. For example, a power of attorney can be drafted which only grants the power to conduct a real estate sale.

MISCONCEPTION #5. Only a Durable Power of Attorney survives death.

-All powers of attorney terminate upon the principal’s death. The difference between a regular power of attorney and a durable power of attorney revolves primarily around incapacity.

 

  • A standard POA terminates upon death or incapacity. Once either of those events happens, the POA is invalid.
  • A Durable POA survives mental incapacity, but not death. The agent can act on the principal’s behalf even if the principal is declared mentally incompetent.
Getting Re-married? Consider second spouse planning.

Getting Re-married? Consider second spouse planning.

Probate & Estate, Wills

No one wants to think about their untimely death. Especially after you’ve just been given a second chance at love. However, if you’ve just gotten remarried and you have children from your first marriage, how do you ensure that both your new spouse and your children receive an inheritance if you die? Do your children or your new spouse get the house? How will your new spouse get by financially if you choose to provide an immediate inheritance for your children?

You want to make sure that your children won’t be disinherited if you leave everything to your new spouse, who then can ultimately will the money elsewhere. Your current will could be fraught with risks that could cause your children to be disinherited.

Here are some possible solutions:

  • Pass your assets to a revocable trust agreement that’s funded during your life through your will or through beneficiary designations. The trust is revocable at any time, so you’re able to change your mind. Upon your death, the trust becomes irrevocable and would benefit your spouse and children.
  • Invest assets to make them income-producing and pay all the income to your new spouse for the rest of their lifetime, while still preserving the principal for your children. Upon your spouse’s death, the remaining principal of the trust goes directly to your children outright or in further trust.
  • You can also choose to name an independent trustee who will have the power to pay a portion of the principal to your new spouse if there’s a need. You can even have your second spouse’s interest in the trust end upon remarriage.

 

Through proper planning, you can maintain control over your assets to prevent disinheritance of your children, while at the same time, providing for your spouse. However, if you don’t make specific arrangements, here’s a broad look at what may happen to your assets, although this may vary with state law and other situations:

  • Your second spouse may be able to claim 1/3 to 1/2 of the assets covered by your will, even if your will specifically states something else. Click here to learn more. 
  • Joint bank or brokerage accounts held with a child will go to that child.
  • Your IRA and/or 401K will go to whomever you’ve named as beneficiary. Contrary to what you may have been told, wills do not supersede these beneficiary elections.

If you want a different arrangement, you and your spouse must have a written prenuptial agreement that meets your state’s inheritance laws. You’ll need to change beneficiary forms.

These financial issues merit serious consideration. Competing interests of your adult children and your second spouse may induce additional heartache once you’re gone. In the case of blended families, it’s always wise to have a professional evaluate your existing will to ensure your desires are carried out.

What happens to him if something happens to you?

What happens to him if something happens to you?

Probate & Estate, Wills

In 2011, entrepreneur and Columbus Ohio native, Nick Braun adopted a rescue lab mix and named him Beau. Beau quickly became a member of the family. So, it’s only natural he would want to take care of him just like any other family member. That included health insurance (Nick created petinsurancequotes.com) but also making provisions for Beau in the event something should happen to Nick.

For many people, it’s a multistep process to make sure the designated caregivers have the financial support and guidance they need to assume care of your beloved pet.

You can’t just say, ‘Hey Dad, can you take the dog if something happens?’, but that’s exactly what most pet owners do (if anything at all). Including your pet into your estate plan can help ensure they receive a continued high level of care should you die before they do. Having them listed in your estate plan could also keep them out of a shelter, which is where many pets end up after their owners die.

When beginning your estate plan, here are a few things to consider:

Name a caregiver.

When thinking about choosing a caregiver for pets, you should consider whether that person is willing, capable and responsible enough to oversee the pet for the long term. Special accommodations could be needed if a pet has a long lifespan or special needs.

Consider monetary expenses.

Make a list of all pet-care costs, taking into account the pet’s expected lifespan. Add up the annual expenses for veterinary care, any medications, monthly grooming, food, and toys as well as a contingency for unanticipated expenses.

Next, determine how those funds should be set aside. Some options include a trust, a bank account controlled by an executor (or by the guardian) or life insurance. Keep in mind that the beneficiary of a life insurance policy can’t be a pet, but it can be a trust that includes provisions for a pet’s care.

Outline a care plan.

Write down clear and detailed instructions on how you would like your pet to be cared for. For example, you can make a list that includes the food your pet eats, how often a day they’re fed, the contact information for your preferred kennel, and the information for any pet-insurance policy as well as his veterinarian contact info.

Formalize agreements.

Once the basic decisions about a pet’s care have been made, owners should formalize things to help ensure that their wishes are carried out. Some people create a pet trust for their animals. Others provide for pets in their wills. Both options require assistance from a lawyer. An owner who goes this route should make sure someone can step in immediately to care for the pet since executing a will usually takes some time. Once the administration of an estate is wrapped up, the will’s executor has no continuing obligation to ensure the pet’s well-being.

 

Whichever option you decide, estate planning attorney Chuck Bendig is here to help. The idea is to protect the ones you love, whether they’re human family, furry or feathered.

Family Fights Over Inheritance – When ‘Fair’ isn’t always equal

Family Fights Over Inheritance – When ‘Fair’ isn’t always equal

Probate & Estate, Wills

Thinking about your eventual demise is not exactly something that people like to spend a lot of time doing. Despite this, planning for the future and the distribution of your assets to loved ones is a necessary part of ensuring that your wishes are carried out in the way you’d like.

By creating a clear plan for your final wishes with an attorney, you can ensure that complications are mitigated before they arise.

You will want to make sure that the ones you love are able to look to your will as a roadmap for settling your estate as quickly as possible. Losing a loved one can be difficult for anyone to deal with, by having a will in place, they will have the ability to spend time grieving rather than deciphering how you would have liked your assets divided.

CONTENTIOUS FAMILY SITUATIONS
At times, family can become estranged from one another. Disagreements or tensions can arise that make family relationship complicated. Sometimes, when a person passes without a will in place, family members may fight over your possessions. This can range from money, to valuables but also family heirlooms.

Grief can sometimes cause people to behave irrationally. They may be looking to hold onto things you once held dear as a way to keep your memory alive. By having an attorney draft your will, you can have a clear path to guide loved ones after you pass away.

Here are some examples of situations that are likely to cause heightened feuds within a family when a loved one passes away:

Giving a beneficiary a portion of their inheritance before you die but not others in your family who stand to inherit assets. Be clear in your will if this was actually the case.

You may want to make sure that you identify only one person to hold the responsibility of trustee. By appointing more people to manage your will, could put them at risk of disagreeing or fighting over how the estate should be managed.

If you are married a second time, or later in life, you will want to outline clearly who stands to inherit what. ALWAYS update your estate plan or will after any changes in marital status.

You will want to make sure that you are clear which of your assets can be sold and which you expect beneficiaries to cherish. Family members who are destitute or are in need of money are more likely to sell things that you would like to keep in your family.

UPDATE IT OFTEN
If you have disinherited someone within your family such as a child, you will want to make sure that your will is as updated as soon as possible. It is possible for someone who has been left out of a will to challenge it in probate.

UNDUE INFLUENCE
If the will being created is for an elderly member of your family, you will want to make sure that they are not swayed or manipulated into leaving someone an inheritance who is taking advantage of them.

SOUND MIND
When a family member suffers from substance abuse or a mental health disorder, their judgment will surely be clouded after losing a loved one. They are also more likely to sever ties with family members and act irrationally when it comes to making decisions based on your will.

An attorney can serve a number of purposes when it comes to your will.  Some people may even appoint an attorney to help manage the estate or act as executor after passing away. This can prove to be beneficial in situations where family dynamics are complicated. Having a professional, who is impartial, can help ensure that your wishes are carried out in the way that you would have liked. An attorney may even be able to help families navigate challenging familial situations when dividing your assets and carrying out your final wishes. If you need any legal help regarding wills, contact Attorney Charles Bendig for any information.

 
The Will may be unfair; but is it illegal?

The Will may be unfair; but is it illegal?

Wills

After Joe Albanese’s mother died in April 2016, he was shocked to learn that she had left a $560,000 home, its contents, the money in her checking accounts, and 82% of her assets to his sister. Joe’s adult stepdaughter, the apple of his mother’s eye since she was a toddler, was omitted from the Will completely.

​”To this day, we still don’t know the motivation behind her choices. Joe feels helpless in this situation” says Joe’s wife Barbara.

But is he?

While the chances of success are slim, a Will can be challenged in court.

 
What you need to contest a Will

Anyone who wants to revise a will after the author’s death must attempt to establish one of the following four legal grounds:

  • Undue influence – If the deceased person was aggressively pressured by someone to change the will, you have a case.
  • Fraud – If the Will’s author was tricked into signing, the Will is invalid.
  • Improper execution – If the Will was not prepared or executed properly under the laws of the state in which it was created, it could be thrown out in court.
  • Lack of capacity. If the Will’s author was not mentally capable of understanding the issues at the time it was created, the Will could be invalid.
Consider the Financial and Emotional Cost

Maybe you’re more interested in proving wrongdoing than in padding your own bank account, but it’s not worth pursuing a case if you’ll lose money even if you win.

If all you’re going to get is the balance of a checking account worth $2,000, and it costs tens of thousands of dollars to bring the case, the cost-benefit analysis doesn’t really justify it.

However, if elder abuse is suspected, a contester could pursue criminal charges against the offender. That avenue may make more sense than pursuing a civil case in which the cost is prohibitive.

In addition to the financial cost, also consider the cost to personal relationships. While feeling slighted by your late loved one – and missing out on inheritance — may be painful, the emotional stress of court proceedings can be just as grueling.

Contesting will likely affect your relationship with your adversary. A person who competes with a parent or sibling in court may win the judgment, but their parent or sibling may never speak to them again.

The decision is yours. If you have questions or need legal guidance,  call 614-878-7777 or click here.

What are the responsibilities of an executor under Ohio law?

What are the responsibilities of an executor under Ohio law?

Probate & Estate, Wills

While designing an estate plan, many people set up trusts to manage their financial affairs. A trust may specify a “personal representative.”  In this post, we outline the responsibilities of the “personal representative.”

Ohio Estate Disputes

If you have been appointed as a dependent administrator or an independent executor, you will have certain fiduciary duties. There is a duty of competency, a duty of disclosure, a duty of loyalty, and a duty of impartiality. These duties are intended to defend the interests of the heirs of the Decedent’s estate, the estate creditors, and the taxing authorities.

The non-exhaustive list includes:

– The executor/administrator should keep the heirs of the estate informed of the administration and use their best efforts to promptly collect the assets and administer and settle the estate.

– The executor/administrator must always be in a position to account for all revenue received, money spent, assets sold/purchased, and all other matters that directly or indirectly affect the estate.

– The executor/administrator must refrain from commingling the Decedent’s property with his/her own or that of any of your businesses or the Decedent’s business interests. Commingling usually is done with cash, and it is imperative that the executor/administrator does not commingle the Decedent’s funds with funds that are not part of the estate, not even for a day.

– The executor/administrator must not leave funds uninvested.

– The personal representative must refrain from self-dealing with any portion of the Decedent’s estate.

Compliance can be accomplished by setting up suitable estate accounts and managing the estate accounting in the manner detailed by your estate attorney.

Also, to help guide you through the process, Executor.com has created a list of the top 4 online tools for executors.