Thursday, September 23, 2010

Should my powers of attorney be immediately effective?

Yes, your financial powers of attorney should be effective upon signing and if you become incapacitated. You want to have your named financial agent to be able to help you without a doctor having to declare you incapacitated. Once someone is declared incapacitated they lose the legal right to change their documents or handle their affairs. It may be that you are only sick and do not have the energy to argue with creditors. Even the elderly who have an onset of dementia have lucid times as well as times of diminished capacity. Therefore, name a trusted person as your financial agent, and a trusted alternate, and have them be able to help you immediately.

Monday, September 13, 2010

Do you take care of the Grandchildren or Children?

Many of my clients wonder if their trust should provide for their grandchildren directly or just their children. If the children are responsible then it is a good idea to leave assets to the children and let them take care of their children (your grandchildren). If the grandchildren are very young, then money will have to be left in trust. This could restrict money their parents might need, for various reasons out of their control, such as a bad economy or medical emergency. Also, with minor children, it is not clear if they will grow up to be responsible or if having a trust will distract them from school or employment. However, if a child is not responsible and will not take care of his children, then a trust for the grandchildren, where an uncle or aunt can oversee the trust, can be a great idea. This also applies to whether to leave money to nieces and nephews or brothers and sisters.

Friday, September 3, 2010

Estate Planning and Step-Children

If you have step-children, then you most certainly want your spouse to have a Will. If your spouse dies without a will, then one-half of the community property will go to the step-children, not the surviving spouse. If the assets are held "with right of survivorship" or a death designation, then the surviving spouse can receive the assets. However, to be sure there are no surprises, a Will is a must any time there are step-children so everyone is clear what assets are to go to the surviving spouse and what assets are to go to the step-children.