While you are setting up your estate you will come to find that a lawyer’s dictionary might be helpful. Words are thrown at you every which way. Warranty deed? Beneficiary? Taxes?! A couple of terms that you should be familiar with are ‘durable power of attorney’ and ‘advance medical directive’ since they will directly affect what happens to your body and your finances.
The durable power of attorney allows you to name an individual as your agent to represent you as they care of your business, investments, and other general matters. Commonly you will hear ‘power of attorney’ being used without the word ‘durable’. While it is not used with the term by most, its potency is not affected. By adding the word ‘durable’ your power of attorney continues to be active after you become incapacitated.
Advance medical directives cover several different documents such as a health care directive, a living will, declarations to die a natural death, and other forms used to delegate medical decisions. In this document you may make decisions about your care when you are unable to care for yourself. Make sure that you choose an agent who has the same view on medical care as you do. You have some ability to limit how much involvement your agent has in making decisions.
Agents on the power of attorney may be the same as the health care directive but each individual has the choice to choose each agent based on their situation and desires. Each of these documents should include addresses and phone numbers from all agents and alternate agents (should the first named agent become unable or unwilling to serve); It is a good idea to visit with your agents before you appoint them. It will help ease your mind and make them more confident in the choices that they make. Agents can be changed by you at any time while you have capacity.
Once you decide who you want to appoint, there is specific information that the agent will need from you about your finances, investments, insurance, and other assets.
This organized information should include:
- Names and addresses of all family members and beneficiaries
- Your email addresses and passwords
- Computer passwords
- Internet account URL addresses
- Employment death benefits and address of personnel office
- Bank and financial institutions, account information, passwords, etc.
- Bank safe deposit box location and locations of keys
- Credit card information
- Income tax information (filed returns, current year information)
- Insurance information (life and property)
- Asset and liability information
My father-in-law frequently shared the five P’s with me, proper planning prevents poor performance. It is crucial that you plan in advance to have important information organized to assist your agent in the best way possible.