Why to Have Your Powers of Attorney Drafted by a Qualified Attorney

Powers of attorney are very important. Legal powers of attorney identify who will act for you legally. Health care powers of attorney identify who will make health care decisions for you when you can’t make them for yourself. These are difficult and IMPORTANT life moments.

Because such powers of attorney matter most when you can’t act for yourself, it is important that your documents are legally accurate. Many well meaning agencies hand out forms and information about powers of attorney and forms abound on the internet. The sad fact is that forms are often incomplete, inaccurate and lack the counsel that comes when you consult with a qualified attorney who has prepared the documents for many clients and worked with many clients in times of incapacity.

Properly considered and drafted powers of attorney are not that expensive relative to the issues that arise when your agent does not have the powers needed or in some cases has too much power. Why would you spend significant sums on long term care and medical care but not be certain that your powers of attorney properly protect you when you can’t protect yourself?

This blog is being written as a reaction to one too many situations in the past six month where an elder client was left without the care they needed due to a form power of attorney or where an elder client was taken advantage of by an agent with too much power because “forms” were used instead of legal support.

© 2014 Parsonage Vandenack Williams LLC

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How Can I Leave My Estate to My Spouse Free of Estate Taxes?

A Video FAQ with Ronald K. Parsonage.

The federal government permits an unlimited marital deduction so you can transfer all of your assets, if you wish, to your spouse. Sometimes in planning it is better to use a marital deduction trust in part and use the equivalent exemption in part so that you can transfer it not only to the spouse tax free, but on to the children tax free.

© 2014 Parsonage Vandenack Williams LLC

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Should I Have a Power of Attorney for Health Care?

A Video FAQ with Mary E. Vandenack.

In general, what a power of attorney for healthcare does is to create an agent that will be between you and the health care system at such a time that you become incapable of making your health care decisions. There are certain things you can specify in a document that don’t require an agent, but in most cases you will be well-served to have someone between you and the health care system if you are unable to make decisions for yourself.

In executing a durable power of attorney for healthcare and naming an agent, you should give careful consideration to what you would want to happen in an emergency, in the event that happens, and make sure you inform your agent of those desires.

© 2014 Parsonage Vandenack Williams LLC

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Who Should Be My Power of Attorney?

A Video FAQ with Mary E. Vandenack.

There are 2 different types of power of attorneys to consider when making that decision. The first type is a legal power of attorney. When you execute a legal power of attorney you are giving someone the ability to act for you on financial matters, to sign checks for you, or to enter into contracts for you. That power of attorney or agent needs to be somebody you have a lot of trust in in that regard.

The other type of power of attorney is a power of attorney for health care. That is a death-bed type of decision or one in which you are very ill or incapable of acting for yourself. You’re going to want to choose someone who is knowledgeable about what you want in those types of circumstances and that you feel will be an active advocate for you with the health care system.

© 2014 Parsonage Vandenack Williams LLC

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What Is the Difference Between General and Limited Power of Attorney?

A Video FAQ with Joshua A. Diveley.

The purpose of a power of attorney in general is to provide an agent authority to act on your behalf, so the difference between the general and the limited is that the general provides all the statutory authority allowed by law. For example, in Nebraska the general power of attorney will provide all kinds of authority for matters related to real estate, financial accounts and tangible personal property.

A limited power of attorney will be just that. It will be limited on what authority you do have to act as agent. For example, if you are out of town for a weekend and you are selling your house and you need to have somebody to represent you at closing, you can set up a limited power of attorney to just represent you on that one transaction rather than having general authority over all your bank accounts and that sort of thing.

© 2014 Parsonage Vandenack Williams LLC

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Should I Use a Trust to Protect My Assets?

A Video FAQ with Mary E. Vandenack.

There are a variety of things to consider before deciding to use a trust to protect your assets. Most states have certain laws allowing you to protect your home or a certain amount of your retirement account or IRA. You might be able to come up with asset protection before using a trust.

There are different types of trusts to consider using if you do get to the point where a trust makes sense. A trust that someone else creates for you is one of the best vehicles. There is also what we call a domestic asset protection trust where you create a trust for yourself in one of the states that allow for that type of trust. It’s a fairly complicated and expensive technique so you do want to be sure to exhaust all of your other alternatives before you choose that path.

© 2014 Parsonage Vandenack Williams LLC

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What Should I Be Careful of When Preparing an Asset Protection Plan?

A Video FAQ with Mary E. Vandenack.

An asset protection plan really needs to be customized to your individualized needs. What you want to do is look at your particular risks and exposures and why you are engaging in an asset protection plan. You also want to consider what state you are currently living in and what protections are provided by those laws. In that regard, you want to consider whether you are likely to relocate into another state that has different laws. If that’s the case, then you are going to want to consider those things that will apply no matter where you are located. One of the biggest mistakes people make in asset protection is they wait until it’s too late, they’ve got a creditor on their heels and start planning then.

© 2014 Parsonage Vandenack Williams LLC

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Who Should Have an Asset Protection Plan?

Almost anyone would be well-served by having an asset protection plan. Anyone can take a left turn and hit an investment  banker who is 51 and making a million dollars a year and suddenly have a judgement against them that can’t be covered. So everybody should consider it. Most typically those who we do see covered are those in high liability professions. One example would be the medical profession, particularly for those physicians or other medical practitioners in states that don’t have liability protections for that type of profession.

© 2014 Parsonage Vandenack Williams LLC

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Tax Savings Opportunities for 2013 Using IRAs

IRAs can provide extra tax savings in 2013, even though the end of the year has passed. There are several key tools that you can use now to lower your tax bill.

Extra contributions are one way to save on taxes. If you make a contribution by April 15, 2014, you can apply it to your 2013 taxes. You may also be able to avoid extra taxes on an early distribution through a properly structured extra contribution. Taxpayers with self-employment income may also be able to shelter income by setting up a SEP before their returns are due.

You may be able to use other tools if you expect to have lower income in 2014. If you made a Roth contribution in 2013, you may be able to convert it to a traditional contribution. You may also be able to back out of a traditional-to-Roth conversion made in 2013. Both of these techniques can result in significant tax savings for your 2013 return.

© 2014 Parsonage Vandenack Williams LLC

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Exercising Care in Asset Protection Trust

A recent Washington bankruptcy case is a reminder of the need to structure asset protection trusts with care. In the case,  the court allowed creditors to reach the assets of an Alaska asset protection trust set up by a real estate developer. The court based its decision on a number of factors. Few trust assets were located in Alaska and several badges of fraud were present. The court applied Washington law despite the fact that the trust recited that Alaska law applied.

In structuring an asset protection trust, settlors should have or create a relationship with the state where the trust is being established. An asset protection trust will provide its best protection if created and funded when creditors are not pounding down the door.

© 2013 Parsonage Vandenack Williams LLC

For more information, contact info@pvwlaw.com