Can a Power of Attorney Change a Revocable Trust
Fact Canvas - Durable Powers of Attorney and Revocable Living Trusts
Family Caregiver Brotherhood
Various legal mechanisms tin can assistance in the management of avails and health care when a person becomes incapacitated. Beneath nosotros discuss three of them: Durable Power of Attorney, Durable Power of Attorney for Health Care, and Revocable Living Trusts. Because laws vary from land to state, you lot should consult with an attorney who is knowledgeable in manor and assets direction for help in legal planning.
For additional information, besides run into the FCA Fact Sheets on End-of-Life Decision Making, Legal Planning for Incapacity and Conservatorships.
Durable Power of Attorney
Q: What is a Durable Ability of Attorney for Belongings?
A Durable Power of Chaser for Property (DPA) is a document that allows yous (the principa50) to give potency to some other person (your agent or attorney-in-fact) to make financial/legal decisions and financial transactions on your behalf. It is chosen "durable" when, by its terms, it remains effective even if the principle becomes mentally incompetent.
Q: Who tin can serve as chaser-in-fact?
It need not be an attorney: any trusted adult, such as a spouse, partner, relative or friend, can serve equally attorney-in-fact. Also, there are several nonprofit agencies that can fill this role. It is ever a good idea to proper noun at least i alternating chaser-in-fact to serve in the event that your starting time choice becomes disabled or dies. Your attorney-in-fact will have broad authority, and it is critical that the person or agency yous choose be trustworthy and sensitive to your wishes.
Q: What powers can I requite to my attorney-in-fact?
The powers you give your attorney-in-fact tin can be as limited or as broad as you similar, and can include the ability to buy property, to invest, to contract, to engage in revenue enhancement planning, to make gifts, and, very importantly, to plan for regime benefits, such every bit Supplemental Security Income and Medicaid (Medi-Cal in California).
Q: What is a "springing" Durable Ability of Attorney?
Ordinarily, a DPA is effective as of the solar day information technology is signed and executed. This means that even if you lot are competent to make your own decisions, your chaser-in-fact volition also have the legal say-so to human action on your behalf and engage in fiscal transactions.
A "springing" DPA, on the other hand, becomes effective at a later date, usually when the principal becomes mentally incompetent ? it "springs" into effect at the indicate you lot lose chapters, as certified past a physician or other designated private.
Notation: Some banks are reluctant to accept a "springing" DPA because of the possible ambiguities involved in deciding when a person is "mentally incompetent." You should consult with your bank virtually its requirements for accepting a DPA.
Q: What are the advantages of a Durable Power of Attorney?
A DPA is a relatively piece of cake, inexpensive mechanism for allowing another person to handle your legal and financial diplomacy. Dissimilar a joint tenancy bank business relationship, which people often use as a management device in the consequence of incapacity, a DPA does non requite your attorney-in-fact legal access for his or her own utilize. Your attorney-in-fact must employ your assets for your benefit.
Also unlike joint bank accounts, a DPA allows you to transfer decision-making power without disrupting your estate programme. When yous create a joint tenancy bank business relationship, yous not only give your "joint tenant" admission to your funds, just on your death, all of the funds in that account volition automatically go to the joint tenant past right of survivorship. Assets in a joint tenancy account are not subject field to your Will. A Durable Power of Attorney, on the other hand, in no way affects the disposition of your assets upon your death and, in fact, ceases to be effective when the primary dies.
A properly drafted DPA can give y'all the flexibility to program for authorities benefits such as Medicaid. For example, the chaser-in-fact tin can be given authority to transfer the primary residence to your spouse if yous need to be in a nursing home or crave government help.
Q: What are the disadvantages of a Durable Ability of Attorney?
The principal disadvantage of a DPA is that it is subject to corruption because in that location is no ongoing court super-vision of the attorney-in-fact. This differs from a conservatorship or guardianship, under which a conservator is required to submit an ongoing bookkeeping to the court. If the attorney-in-fact abuses his or her authority and acts improperly, a courtroom may step in and take action. However, in many cases, the damage is already done, and it is difficult to undo it. Thus, you should take nifty intendance in selecting your attorney-in-fact.
Q: Practice I demand a lawyer to have a Durable Ability of Attorney drafted?
There are advantages to having a lawyer draft a DPA. First, a qualified chaser volition be familiar with the country-specific requirements for DPA forms. Second, an attorney can draft the DPA to run across your individual needs. Although pre-printed forms are available, they are worded broadly and may non succeed in delegating the range of potency y'all intend. Third, since a DPA is subject field to abuse, information technology is a good idea to meet with an attorney to brand sure both the principal and chaser-in-fact understand the document and the chaser is bodacious of the principal's competency.
Note: Some banks and brokerage companies will require you to use their DPA forms in order to bear out financial transactions with them. You may want to complete the DPA forms provided past these institutions in conjunction with a form drafted by your attorney.
Q: How do I execute a Durable Power of Attorney?
An developed must exist competent in order to execute a valid DPA. If in that location is a question regarding competency, it is a skilful idea to get a doctor's letter or announcement regarding the principal?south capacity to understand and sign a DPA at the time the document is executed. Y'all must sign your DPA in the presence of either two qualified witnesses or a notary public (some states may require both).
For existent estate transactions, you volition take to file your DPA with a county land records office. To be sure yous encounter your state?s legal requirements for a DPA, you should consult with a qualified attorney.
Durable Power of Attorney for Health Intendance
Q: What is a Durable Power of Attorney for Health Care (DPAHC)?
A DPAHC is an accelerate directive that allows yous to appoint a health intendance amanuensis (also known as an attorney-in-fact, a proxy, or a surrogate) to make wellness care decisions for you lot in the event that you lot tin no longer speak for yourself. Every country recognizes a DPAHC, merely laws governing directives vary from land to state. Some states consolidate the DPAHC with other accelerate directives. For example, California?s Accelerate Wellness Care Directive consolidates the DPAHC, the Natural Decease Act, and the Directive to Physicians into i form.
For additional information on accelerate directives, see the FCA Fact Sheet: Terminate-of-Life Conclusion Making.
Q: What if I am competent to make my own wellness care decisions?
Unless yous stipulate otherwise, your health care agent makes decisions for yous simply if you are no longer able to make health intendance decisions for yourself.
Q: If I have filled out a Living Will, do I also demand a DPAHC?
It is a good idea to consummate a DPAHC in addition to a Living Volition, or to combine them in i document. A Living Will unremarkably allows you to land your desires regarding life-sustaining treatment in the effect that yous become terminally sick or permanently unconscious. Virtually states include these types of instructions in their DPAHC forms. Past selecting a wellness intendance amanuensis through a DPAHC, you ensure that someone yous trust will oversee decisions and implement your wishes regarding any treatment, not but life-sustaining handling.
Q: What powers tin I give my health care agent?
A DPAHC allows you lot to requite your health care agent as wide or as limited powers equally you like. While state laws may vary, the powers you can give to your amanuensis usually include:
- The right to select or belch intendance providers and institutions;
- The correct to refuse or consent to treatment;
- The correct to admission medical records;
- The correct to withdraw or withhold life-sustaining treatment;
- The power to make anatomical gifts.
Note: A wellness care agent does not accept the authority to make legal and financial decisions for you. Legal and financial decisions are made through a separate Durable Power of Attorney for Property equally discussed at the beginning of this fact sail.
Q: Who should I choose as a wellness care agent?
You should cull a person whom you trust, such as a spouse, partner, family member or close friend. The person you choose should know your personal values and beliefs. If possible, y'all will want to choose someone who lives in your area in case he or she is called upon to direct your handling for an extended period of time. You volition want to talk over your health intendance wishes with your agent and be sure he or she is willing to human activity on your behalf. Many states volition not allow your health care provider or anyone working in a health facility to be a health care agent.
Q: Can I choose an alternate wellness intendance agent?
Yes. Yous should choose at least 1 alternate person to act equally your health intendance agent in case your commencement choice is unable or unwilling to make health care decisions for you.
Q: How do I execute a DPAHC?
You must exist at least 18 years of age and mentally competent to execute a valid DPAHC. Y'all must sign your DPAHC form. Most states will besides require qualified adult witnesses and/or a notary public to sign the DPAHC, acknowledging that you lot are competent and interim nether your own volition. No attorney is required. If you lot are in a nursing home, other witnessing requirements may apply.
Q: Where can I find DPHC forms and instructions?
A local hospital, Long-Term Care Ombudsman program, senior legal service or senior information and referral program, a local or state medical society, or your dr. will usually have forms appropriate for your state. Some medical centers offer classes in preparing advance directives.
Revocable Living Trust
Q: What is a Revocable Living Trust?
A Living Trust is an arrangement in which a person transfers ownership of their assets from themselves to another entity, the trust. The person creating the trust is the settlor. The person who manages the trust is called the trustee. The person for whose benefit the trust is being managed is called the casher. The same person can exist settlor, trustee and beneficiary.
Thus, you lot can gear up a trust with your own assets and retain complete management and command of the avails by acting as your own trustee, or you lot can designate someone else as trustee to manage the assets for you.
It is called a "Living Trust" because it is created during the settlor'south lifetime. This is unlike from a "Testamentary Trust" which is created upon the decease of the settlor.
Q: How does a Living Trust function as a management device if I am incapacitated?
In the effect that you are incapacitated, the trust tin provide for an alternating trustee, whom y'all have selected, who volition manage the trust funds for you lot. The trust document should spell out how the determination of incapacity is made.
Q: How does a Living Trust serve as a substitute for a Will?
The trust certificate provides for the distribution of the settlor's avails upon the settlor's death. On the death of the settlor, the trustee distributes the trust assets direct to the beneficiaries designated in the trust instrument. There is no automatic court supervision or probate of this distribution process as there is under a Volition. This is generally faster and less plush than the distribution of avails pursuant to a Will.
Note: In order for a Living Trust to office as a Will substitute and avert probate, the settlor's avails must be transferred into the Living Trust during the settlor'southward lifetime.
Q: Does a Living Trust relieve taxes?
You tin can employ the same tax planning strategies in a Will every bit in a Living Trust. The employ of a Living Trust does non in and of itself save taxes, but a Living Trust may exist one vehicle for taxation planning. You should consult an attorney to find out means in which y'all might limit taxes on your avails.
Q: Can a Living Trust be used to obtain Medicaid benefits?
People who are facing the need for long-term custodial care often explore Medicaid as a source of coverage. Putting your own assets into a Revocable Living Trust does non shield or protect those assets for Medicaid purposes.
Q: Who tin can serve as a trustee of a Living Trust?
A trustee can be an individual, such as a family member or friend, or it tin can be a banking concern or other financial institution. If you cull an individual to serve as your trustee, you want to make sure that he or she is both trustworthy and able to manage your assets. Some people adopt a neutral third political party, such as a bank or trust company. These institutions practise charge fees, usually based on a percentage of the trust manor, and you may want to interview several trust companies earlier you choose one.
Q: Is a Living Trust right for everyone?
For many people, a Living Trust is an ideal arrangement both for direction of assets and as a Will substitute. However, it is not correct for everyone. Nether a Living Trust, the trustee who manages the assets has an obligation to use trust avails only for the beneficiary'southward do good, but there is no ongoing courtroom supervision of the trustee. Thus, there is less protection in case of mismanagement of assets than there is in a conservatorship (see the FCA Fact Sheet: Conservatorships).
Also, a Living Trust is more costly to take drafted than a Volition. These are costs that you will pay up front, as opposed to probate costs, which are paid after a person'due south death by his or her heirs. In the long run, the price of a Volition and the cost of a Living Trust may be well-nigh the aforementioned. Furthermore, in order for a Living Trust to function finer, it must exist fully funded. This entails, in some cases, considerable effort on behalf of the settlor to transfer assets into the trust.
Q: If I have a Living Trust, do I need a Will?
Although a Living Trust functions as a Will substitute, it is necessary even with a Living Trust to accept a "cascade-over" Will. A pour-over Will makes sure that any assets that were not transferred into the trust during the settlor'due south lifetime are poured over into the trust on the settlor's expiry. If all of the settlor's assets have been transferred into the trust during the settlor's lifetime, the pour-over Volition volition never be used or admitted into probate.
Q: If I have a Living Trust, practice I still need a Durable Power of Attorney for Holding?
It is ordinarily advisable to have a DPA for Property in improver to the Living Trust. This is because some decisions that must exist made on your behalf practice not fall inside the powers of a trustee.
Q: If I have a Living Trust, practice I still need a Durable Power of Attorney for Health Care?
Yep. A trustee under a Living Trust does not have the authority to make medical decisions on behalf of the settlor. A trustee can use trust assets to pay for medical intendance, but they cannot make medical decisions. If you would like your trustee to make medical decisions for you, you will demand to engage him or her equally your wellness care agent through a separate Durable Power of Attorney for Health Intendance (see previous department of fact sheet).
Q: How do I constitute a Revocable Living Trust?
If y'all choose to constitute a Living Trust, information technology is a good idea to do so through a qualified attorney who is knowledgeable in estate planning and assets management. Trust documents can exist very complicated.
Credits
This fact canvas was written by Harriet P. Prensky in 1997 and updated in Oct 2001. Ms. Prensky is a certified elder law attorney and partner in the law firm of Prensky & Tobin in Mill Valley, California. She focuses on legal issues of the elderly and disabled, estate planning and probate, and is a Fellow on the National Academy of Elder Police force Attorneys.
AARP (2001). Wills and Living Trusts.
www.aarp.org/legalsolutions
Elder Law Answers (2001). Estate Planning.
world wide web.elderlawanswers.com/test2_new.asp?menuitem=Manor+Planning
MetLife (1999). Benefits of Establishing a Trust Fund.
www.metlife.com/Lifeadvice/Money/Docs/trust1.html
NOLO: Law for All. (2001). Durable Powers of Attorney for Finances FAQ.
www.nolo.com/lawcenter/ency/index.cfm
NOLO: Constabulary for All. (2001). Healthcare Directives FAQ.
world wide web.nolo.com/encyclopedia/manufactures/ep/ep100b-104.html
Recommended Readings
American Bar Clan Guide to Wills and Estates. Order on the web at world wide web.abanet.org/shop/order.html or past phone at (800) 285-2221.
Brand Your Own Living Trust., Denis Clifford, 1996, Nolo Press, 950 Parker St., Berkeley, CA 94710. (800) 992-6656.
The V-Minute Lawyer's Guide to Manor Planning., Michael Allan Cane, 1995, Dell Publising, 1540 Broadway, New York, NY 10036.
Resources
Family Caregiver Alliance/.
National Eye on Caregiving
180 Montgomery Street, Suite 1100
San Francisco, CA 94104
(415) 434-3388
(800) 445-8106
Fax: (415) 434-3508
Website: world wide web.caregiver.org
E-mail: [e-mail protected]
Family Caregiver Brotherhood (FCA) seeks to meliorate the quality of life for caregivers through education, services, research and advocacy.
Through its National Eye on Caregiving, FCA offers information on current social, public policy and caregiving issues and provides assist in the evolution of public and private programs for caregivers.
For residents of the greater San Francisco Bay Area, FCA provides direct family back up services for caregivers of those with Alzheimer's illness, stroke, head injury, Parkinson's and other debilitating brain disorders that strike adults.
Compassion & Choices
PO Box 101810
Denver, CO 80250
(800) 247-7421
Website: www.compassionindying.org
Advance Directive forms for all states can exist downloaded from the Compassion in Dying website.
National Academy of Elderberry Police force Attorneys
1604 North Country Lodge Road
Tuscon, AZ 85716
Phone: (520) 881-4005
Fax: (520) 325-7925
Website: www.naela.org (includes a directory of elderberry police attorneys)
American Bar Association (ABA)
Website: www.abanet.org
Lawyer Referral Services: http://www.abanet.org/legalservices/lris/directory.html
Five Wishes
Aging with Dignity
PO Box 1661
Tallahassee, FL 32302
(888) v-WISHES
Website: www.agingwithdignity.org/5wishes.html
Five Wishes is a certificate that helps you express how you want to be treated in the event you become seriously ill and unable to speak for yourself.
Reviewed past Charlie P. Sabatino, Assistant Director, Commission on Legal Problems of the Elderly, American Bar Clan. Revised October 2001. Prepared by Family unit Caregiver Brotherhood and funded by a grant from the Archstone Foundation. ?All rights reserved.
©2001 Family Caregiver Alliance/National Middle on Caregiving. All rights reserved.
Source: https://www.agis.com/Document/750/fact-sheet---durable-powers-of-attorney-and-revocable-living-trusts.html
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