You've planned, budgeted, saved. You're insured, and you may be out of debt. But what would become of all this diligence if you suddenly became unable to continue to manage your affairs personally due to physical and/or mental infirmity? In an abundance of caution, these four documents should be cornerstones in every prudent adult's legal and financial foundation:
1. Last Will and Testament. It is startling that as many as half of all adults do not have this most fundamental document in place when they die. Perhaps they don't realize that if they die without a Will (intestate), the laws of the state - not they or their heirs - will determine who gets their property and is named guardian of their minor children. For instance, many Georgians might be surprised to learn that under current Georgia law, the estate of an intestate person is divided between the spouse and each child, with the spouse potentially receiving as little as one-fourth!
In the alternative, by establishing a "Will," you retain control by conveying your will, attitude and beliefs toward your family and assets. In it you can:
- Designate the person whom you want to be the executor of your estate and give him the power to act without posting bond and filing reports with the probate court, if desired;
- Specify the persons or charities you want to receive your real and personal property; and
- Name your children's guardian and provide financially for their future. For example, parents oftentimes establish a Trust in their Wills to provide for minor children, grandchildren or those with special medical needs.
When drafting a Will, it is typically prudent to consult an attorney to ensure that it addresses your specific personal circumstances and any necessary legal issues. For example, a properly drafted Will can minimize or possibly even eliminate estate taxes, or can maintain Medicaid qualification for a spouse who is in a health care facility. Also, an attorney can ensure that the resulting document fully complies with prevailing state laws and takes advantage of special considerations that may be contemplated by the law. For example, in Georgia be aware that absent a provision to the contrary, even an existing Will is revoked by events such as marriage or the birth of a child. Like a number of other states, Georgia law recognizes "self-proving" Wills. Making yours self-proving will save time and money when the Will is probated.
After it is drafted, your Will must be properly signed and witnessed or it won't be valid. The original signed Will should then be kept in a safe place where it will be found when it is needed. Finally, it should be reviewed annually to ensure that it continues to represent your wishes and comply with the law, which is subject to change in each legislative session.
2. Durable Financial Power of Attorney (DFPOA). While a Will determines what will happen to your estate after your death, this document controls how your business and finances are to be handled while alive but incapacitated. In it you name someone whom you trust to act as your "agent" in making your financial and property decisions in the event that you become unable to do so. The term "Durable" pertains to specific essential language which enables your agent to act on your behalf if, and especially when, you become temporarily or permanently incompetent.
Does an attorney need to draft this document? Well, maybe not . . . unless you have a bank account, own property, own investment assets, own a business, or wish to make gifts to family or charities. Although forms and computer programs provide the basics, they are basic; generic one-size-fits-all approaches cannot be sufficiently refined to thoroughly address each individual's circumstances. Thus, it may well be beneficial to consult an attorney who is knowledgeable in this area to ensure that your circumstances are thoroughly and specifically addressed.
For example, particular language is necessary for your agent to accept your income, continue your business, or make gifts of money or property to friends or family. Also, many financial institutions do not accept the basic document. Instead, they require that specific language be included to empower your agent with respect to their accounts. In addition, real estate and investment assets should always be specifically described in the document. And it is recommended that you name at least one back-up agent, in case the first-named agent is or becomes unable to serve for any reason.
Having a DFPOA crafted especially for your circumstances will make it easier and less costly for your agent to act on your behalf. It also provides two significant benefits:
- It enables decision making to be kept within the family unit; and
- It can eliminate the need for Guardianship of the Property.
Avoiding Guardianship is recommended for several reasons. First, guardianship proceedings can be emotionally difficult for the family and the prospective "ward" to endure. At the hearing, evidence is provided to the probate court judge to demonstrate that the ward is no longer competent to make his own decisions. If satisfied, the judge then removes the ward's legal rights to make his own financial or business decisions or engage in any financial transactions.
Second, the appointed guardian must be bonded and must file annual financial and inventory reports with the court. This can be expensive and very time consuming.
Third, guardianships are cumbersome because court permission is required before the guardian can undertake action with regard to the ward's property. For example, the guardian must always seek permission from the court to spend any principal of the ward's estate, to sell stock, to make gifts, to enter into a contract on behalf of the ward, to continue the ward's business, or to sell or lease the ward's property. While this oversight may decrease the likelihood of malfeasance, it also dramatically decreases familial control at considerable emotional and financial expense.
Whether common prudence, sound legal advice or specific issues such as Guardianship influence the decision to pursue a DFPOA it would, of course, be wise to discuss your wishes and desires with your named agents. And as with your Will, once drafted it is critical that the document be properly signed and witnessed as required by state law. It should then be retained in a readily accessible location in the event that it is ever needed.
3. Durable Medical Power of Attorney (DMPOA). This document, sometimes called a Durable Power of Attorney for Health Care, is conceptually similar to the DFPOA in purpose, but its focus is health care decision making.
In your DMPOA you appoint and empower someone whom you trust to act as your agent in the making of your medical and health care decisions in the event that you become unable to do so. These include such decisions as the hiring and firing of physicians, admitting you to health care facilities, and consenting to surgery, antibiotics, experimental treatment and "Living Wills" type decisions (see following).
Since a statutory DMPOA short form is readily available in Georgia, an attorney is not necessarily required in order to draft this document. However, a number of hospital situations have occurred both within and outside of Georgia in which the short form was not accepted. This was a result of the failure of the "short form" to specifically enumerate the powers and authorities given to the agent.
As such, with affairs this critical - quite literally the possibility of life and death - you would be well advised to consider engaging an attorney who is knowledgeable in this area. Adequate legal counsel and proper drafting will ensure that your document enables your stated wishes to be carried out without obstacle. Counsel is particularly recommended if you have a unique medical condition and wish to indicate specific types of treatment that you do or do not desire.
As with the DFPOA and guardianship of the property, the DMPOA also has implications for guardianship. With this document in place, Guardianship of the Person can be avoided - which is strongly recommended for many of the same reasons that Guardianship of the Property is discouraged. As with Guardianship of the Property, the court must be petitioned to grant approval for each personal and medical decision made on behalf of the ward. While this is time-consuming, potentially expensive and emotionally exhausting, the greater concern is how it subjects wrenching personal family decisions to the jurisdiction of a probate court judge who knows little or nothing about the ward and his values or wishes. In the alternative, a well drafted DMPOA enables medical decision-making to be kept within the family and can make the task of the agent much easier in ensuring that you receive the type of treatments you desire.
As with the DFPOA, it is wise to name at least one backup agent in case the first-named agent is or becomes unable to serve. And it is recommended that you discuss your wishes and desires with your agents so that they will have a full understanding of the treatment that you would want in any given medical situation.
Finally, it is equally critical that the DMPOA be properly signed and witnessed as required by state law. A copy should then be given to each of your physicians and each person named as an agent or back-up agent for use if and when required.
4. Living Will. This fourth document represents the final foundation document that every adult should seriously consider executing. A Living Will provides the legal forum in which you can specify those medical conditions (terminal condition, coma, or persistent vegetative state) under which you would want nutrition and hydration to be continued or withdrawn from you. It is strongly recommended that you talk with your family, your physician, and particularly your agents under your DMPOA about your feelings and desires with regard to a Living Will. This is because, properly drafted, your DMPOA and your Living Will work together and support each other.
A Living Will should not be confused with a Do Not Resuscitate (DNR) Order. Under Georgia law, an individual is presumed to consent to cardiopulmonary resuscitation (CPR) if his heart stops beating or if he stops breathing. In order to override this presumption, the individual (or his agent, if he is not competent) can consent to the issuance of an order not to resuscitate (DNR). Because a DNR is a medical order, it must be issued by a physician.
A written DNR order may be entered in the chart of a patient for several reasons. The individual may have a medical condition, such as cancer or AIDS, that is expected to cause his imminent death; or he may be in a noncognitive state with no reasonable possibility of regaining cognitive functions. Or, it may be determined that CPR would be medically futile because it would be either unsuccessful or only temporarily successful. As with all matters dealing with life and death, consent to an order not to resuscitate should not be taken or entered into lightly.
A statutory Living Will form is readily available in Georgia, so once again an attorney is not necessarily required to draft this document. However, since it is only a form it is not perfect and does not address every possible situation. Therefore, many individuals choose to add more expansive language to address their concerns and desires regarding being kept alive by machines.
Finally, once executed, you should make sure that each of your agents under your DMPOA have a copy of your signed Living Will in the event that it is needed.
Rounding out your planning process with each of these four essential documents enables you to rest assured that your will will be carried out no matter what your future may hold.