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If you had a stroke tomorrow, will the judge suddenly be in charge?  If you haven’t properly planned your family may find themselves appealing to a judge to make important medical and financial decisions when you can’t.

Picture Kevin – he is approaching retirement when he has his stroke.  Besides the medical decisions his family now faces, he has some important retirement decisions to make – except that he can’t, and his signature is required to set up early retirement, and designate his retirement beneficiaries.  Also, his wife is looking at a long term care facility, which she can’t afford, so she is looking at applying for Medi-Cal (Medicaid).  She is shocked to discover that she needs a conservatorship over Kevin to take care of most of these matters.

How can you avoid being in Kevin’s shoes?  With a well drafted Power of Attorney, the person you choose has the authority to fill out retirement forms, plan effectively for Medi-Cal with the help of an estate planning attorney, and in general, handle day to day financial decisions.  People don’t realize that the statutory form power of attorney is good for day to day financial decisions, but doesn’t cover things like creating trusts, and actions you may need to take to qualify for Medi-Cal.

Picking the Right Person

Because the Power of Attorney and Advance Health Care Directive agents are basically stepping into your shoes to make financial and medical decisions on your behalf, picking the right person is imperative.  If you don’t have a family member, relative or friend that you trust, talk to your attorney about local professional fiduciaries.

Statutory / Simple form vs Estate Planning Document

California has a simple Statutory Durable Power of Attorney.  The problem with that form is that it doesn’t contain the Estate Planning and Medi-Cal powers your family or agent will need to effectively plan for the future.

Immediate vs “Springing”

You’ll need to decide whether you want the powers to take effect immediately or upon your incapacity.  Because these are powerful documents, some client’s don’t feel comfortable with the powers taking effect until after they can no longer make decisions for themselves.  Remember however, that diminished capacity can be just as dangerous complete incapacity which is why immediately may be the best option.

Protect Yourself with an Estate Planning Durable Power of Attorney

Unless you plan properly, you leave yourself and your family exposed to the risk that they’ll need to file a conservatorship action, and ask a judge to make important medical and financial decisions on your behalf.  The Durable Power of Attorney and Advance Health Care documents are often included by attorneys in other estate planning packages they offer.  Though inexpensive by themselves properly drafted incapacity documents can be invaluable.

Image courtesy of Kittisak at FreeDigitalPhotos.net