As the old saying goes, nothing is sure in life but death and taxes. Everyone dies, and life for the survivors is emotionally and financially easier if a person has planned for what happens at his or her death. Most people also will not know how their death will occur. It could be sudden, as in a car accident, or it could be due to a long term illness or dementia. Planning for these events allow you to control who will be the people to help you, how people (including medical professionals) will treat you, and what will happen with your assets.
The law permits only people who are competent to be able to execute documents, whether it is a contract, a deed, a power of attorney, or a will. An incompetent person cannot do that. So, it becomes very important that while you are still of sound mind that you plan for your death or incompetency. If an incompetent person has failed to plan, that means someone else must take responsibility for them and their assets. Generally, while still alive, that means seeking a guardianship or conservatorship, with the limits that the Probate Court will place upon them, and the accompanying court costs and attorneys fees. The person in control could be a person you do not want in control. After death, it means assets being distributed according to state law (intestacy), not how you may want your assets distributed. Again, with a person you may not want in control of your assets. If a person plans before they become incompetent, the costs, delays and undesirable aspects of guardianships, conservatorships, and intestacy can many times be avoided.
What are the basic planning documents? First, a will takes care of what you want done with your assets after you die. Second, a Power of Attorney allows someone else to take care of your things before you die. Third, a Health Care Directive (living will) allows someone else to make decisions for you before you die, and gives instructions for the process of dying.
It is my opinion that anyone who owns any real estate, or has more than $20,000 in net assets (a “Small Estate”) should have a will. Title to real estate owned by a deceased person will not meet marketability standards (it will have “bad title”) for 3 years unless an estate is probated. If you don’t have a will, the state of Maine has a plan for you, and that plan does not fit every situation. Furthermore, the laws give preference to certain individuals that you may or may not want managing your assets. A will allows you to control who gets what, and who manages the process of getting your assets.
A Power of Attorney (also called a General Durable Power of Attorney) allows someone else to make decisions for you. Whether it is dealing with banking, stocks, real estate, insurance, or any other matters, you can designate someone else to make those decisions. You must sign a Power of Attorney while you are competent, but it is designed for use while you are alive and incompetent.
A Health Care Directive (formerly know as a “Living Will”) allows you to name a person who can make medical decisions for you, as well as give instructions on what you want done during the process of dying. Medical providers will always look to the patient for decisions first, and only look to the medical POA when they believe the patient is incompetent.
Those 3 documents-a will, a power of attorney, and a health care directive-form the cornerstone of any estate plan.
This article is meant to be informative only, and is not intended to be legal advice for any person. It cannot be relied upon for any specific situation. You should consult with an attorney and describe the facts of your particular situation and obtain his or her advice before taking action in a specific case.
Ronald G. Aseltine, Esq., practices law at 42 Main Street, Livermore Falls, ME. He also has an office in Wilton.