5 Legal Documents You Need for Your Elderly Loved Ones
There are 5 legal documents every elder should have in place.
- Medical Directive:
Also known as an Advanced Directive. This document sets out the level and extend of care your loved one wants to receive when they become ill or incapacitated. Some individuals do not want heroic measures to remain alive. Your medical directive will state whether you want artificial support for breathing and eating, such as a ventilator and feeding tube. Most people do not want these invasive measures taken and believe the benefit of having such measures to remain alive is outweighed by diminished quality of life. The Medical Directive ensures the wishes of the elder is respected at the end of life and provides clarity and guidance to family members.
- Power of Attorney for Healthcare:
A power of attorney for healthcare allows you to make healthcare decisions for your loved one. By appointing someone in advance with the power to make healthcare decisions for your loved one, fast and effective decisions can be made in the event of illness or incapacity. Otherwise, you would need to start a formal process with the probate court to get appointed as a conservator, a slow and costly process requiring medical testimony.
- Power of Attorney for Finances:
A power of attorney for finances allows you to manage your loved one’s financial affairs, pay bills, sell property, contract for services, rent property, pick living arrangement, and so on.
Types of Power of Attorney
There are four types of power or attorney for health care and finances and it is important to understand the differences as to when the power kicks in.
i. Limited. A limited power of attorney gives someone else the power to act in your stead for a very limited purpose. For example, a limited power of attorney could give someone the right to sign a deed to property for you on a day when you are out of town. It usually ends at a time specified in the document.
ii. General. A general power of attorney is comprehensive and gives your attorney-in-fact all the powers and rights that you have yourself. For example, a general power of attorney may give your attorney-in-fact the right to sign documents for you, pay your bills, and conduct financial transactions on your behalf. You could use a general power of attorney if you were not incapacitated, but still needed someone to help you with financial matters. A general power of attorney ends on your death or incapacitation unless you rescind it before then.
iii. Durable. A durable power of attorney can be general or limited in scope, but it remains in effect after you become incapacitated. Without a durable power of attorney, if you become incapacitated, no one can represent you unless a court appoints a conservator or guardian. A durable power of attorney will remain in effect until your death unless you rescind it while you are not incapacitated.
iv. Springing. Like a durable power of attorney, a springing power of attorney can allow your attorney-in-fact to act for you if you become incapacitated, but it does not become effective until you are incapacitated. If you are using a springing power of attorney, it is very important that the standard for determining incapacity and triggering the power of attorney be clearly laid out in the document itself.
Regardless of what type of power of attorney you use, it is important to think carefully about who will have power of attorney. Your attorney-in-fact will have a lot of control over your healthcare and finances, and it is crucial that you trust him or her completely. If you do not have someone you trust to act as your attorney-in-fact, consider using a licensed fiduciary company.
Download: California Form Power Of Attorney For Finances
- Revocable Trust:
It allows your loved ones to retain control over their estate while making transfers of assets to beneficiaries. They designate what property (home, investments, jewelry, and so on) goes into the trust and to whom it will be granted. During their lifetimes, they act as executors of their own living trust. A revocable living trust has an important advantage: it allows their estate to avoid probate at the time of their deaths.A revocable living trust is one of the single most important documents for older adults — or anyone with assets — to have in their estate plan. It functions as a will, allows their estate to avoid probate, makes a potential guardianship process unnecessary, and gives them control of their assets for as long as they’d like or are able to manage them. They don’t need to be rich or have vast assets — a life insurance policy, checking account, house, or any asset of value merits establishing a revocable living trust.
There are other important advantages to this type of trust. For one thing, unlike a will that becomes a matter of public record, a trust is private. You may have an issue in your family that you don’t want to disclose to the public at large.
Also, without a trust, an estate will go through probate, a costly and lengthy process in which the court administers the distribution of the estate. And if the estate holds property in multiple states, it will have to go through probate in each state.
A will is a legal document that lets your loved one tell the world who should receive which of his or her assets after death. It is not just for the elderly. Everyone, especially those with dependent children should have a will because it allows them to name guardians for any dependent children. Without a will, the courts decide what happens to the assets and who is responsible for the kids.
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