Appointing a Financial Power of Attorney

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Creation of a power of attorney allows you or your aging loved one to appoint an agent to act on his or her behalf should they become incapacitated. Appointing a power of attorney provides you or your loved one with assurance that someone they trust will be making financial decisions in his or her best interest. If a power of attorney is not appointed prior to incapacitation, the family likely would be forced to undergo expensive and time-consuming measures to court-appoint a guardian or conservator to handle their financial decisions.

 

What is a Financial Power of Attorney?

A document in which the principal (you or your loved one) appoints an agent to act under specified circumstances. The Principal can decide what she will allow her agent or representative to decide for her, and should plan for a broad range of responsibilities to fit his or her future needs. For example, many people allow their agent to handle some or all of the following: handle everyday expenses, investments, file and pay taxes, maintain or sell property, collection of government benefits, maintain, buy, or sell insurance policies, maintain a small business, trust creation or maintenance, hire an attorney, and manage retirement accounts. The agent has a duty to act in the best interest of the principal, not commingle their property with yours, avoid any conflicts of interest, and retain accurate records.

 

Types of Power of Attorney

A financial power of attorney can take effect immediately when the form is signed, or it can be drafted so that it only begins upon the occurrence of a specific event, i.e., incapacitation. Many spouses maintain ongoing, active power of attorney designations in the event something unexpected happens to one spouse. It is the principal’s decision when a power of attorney begins and ends.

Conventional Power of Attorney: Effective when signed by the principal and ends when the agent becomes incapacitated themselves.

Springing Power of Attorney: Effective only when a specified even occurs, (i.e. the principal’s incapacitation), allowing the principal to remain in control of his affairs until the event. A springing power of attorney can create a whole host of problems for your agent if the form is not drafted to explain exactly when the specified event is deemed to have occurred, and the power of attorney then “springs” into action.

Durable Power of Attorney: Effective when signed by the principal, and remains in effect throughout the principal’s life, unless he or she revokes it. A durable power of attorney is often the best choice, because it remains in effect even after the principal recovers from incapacitation. There is also no ambiguity as to when this type of power of attorney takes effect. The principal can remain in control of her finances even after signing, until she can no longer make sound decisions.

 

Termination of a Power of Attorney

A durable power of attorney terminates at the principal’s death. As a result, you cannot give your agent power to handle your estate – naming the executor of your estate is a separate process entirely. Power of attorney can also terminate if revoked by the principal (so long as they are of sound mind), divorce (if you designated your spouse as your agent), invalidation by court order, or your agent is unavailable.

Contact an Experienced Attorney

Creation of an estate plan, including a power of attorney, can be a complex and overwhelming legal endeavor. The knowledgeable attorneys at the Leslie Legal Group are here to help guide you through this process and create an estate plan that is right for you. We will ensure that you understand every step in the estate planning process. Contact us today for a consultation.

Back to the Basics – The Prevalence of Elder Abuse in California

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This week in San Diego, a 20-year old man was accused of mugging a 74 year old College-area resident. Lucas Churchill Homes pleaded not guilty to charges of elder abuse, robbery, burglary, and identity theft. Holmes contacted the victim through a Craigslist dating page. He then showed up at his home on El Cerrito Drive at approximately 1:15am Wednesday morning. Holmes is accused of using an electric stun gun on the man before tying him up, robbing him, and putting him in a bathtub. Allegedly, he stole the elderly man’s credit and debit cards, and manipulated him into revealing his PIN numbers. Holmes was arrested that afternoon, and faces over 10 years in prison should he be convicted. This story highlights the fact that elder abuse is prevalent in this country, including in California.

The National Center on Elder Abuse conducted a study which interviewed 2,000 nursing home residents. Forty-four percent of those residents revealed that either they had been subject to abuse or neglect, had seen a peer abused or neglected. According to the National Center on Elder Abuse, elder abuse is defined as “intentional actions that cause harm or create a serious risk of harm (whether or not harm is intended) to a vulnerable elder by a caregiver or other person who stands in a trust relationship to the elder. This includes failure by a caregiver to satisfy the elder’s basic needs or protect the elder from harm.” Elder abuse often goes unreported, so it is impossible to know for certain how many seniors are affected by abuse or neglect. The senior may be afraid to report the abuse themselves due to potential retaliation, cognitive impairments or dementia, or because they do not want to report the abuser, a majority of whom are family members.

California Elder Abuse Law

The applicable law punishing elder abuse in California is California Penal Code Section 368(c). Under this statute, a person is guilty of elder abuse if they cause an elderly person to suffer unjustified physical or mental pain, or allows it to occur. Caregivers must follow normal standards of care, and those who fail to adhere to the standard of care, or are negligent when caring for the elderly may be charge with elder abuse.

The punishment for violating this law depends on whether you are charged with felony or misdemeanor elder abuse. The misdemeanor offense is punishable by up to one year in prison and a $6,000 fine. The felony offense is punishable by two to four years in prison.

If you or someone you know is facing charges of elder abuse, it is vital to have an experienced criminal defense attorney on your side to ensure your rights are protected. Contact Sean F. Leslie, Attorney at Law to discuss your case today.

Importance of Wills and Trusts

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Have you created a Will yet? Or a trust? How about a Living Will? Many people today don’t realize the importance of having a plan in place in case of unforeseen circumstances, and many put off creating one for a variety of other reasons. More often than not, individuals are more focused on the here-and-now and don’t think about the end of the road; after all, one’s own death is not a pleasant thought. However, if you care about those who would be left behind if the unthinkable occurs, it’s best to plan ahead. At the very least, doing some research into what your options are can help you determine what, if anything, you need to plan for.

There are many benefits to having an estate plan in place, and it can often protect your family and loved ones from experiencing unnecessary financial burdens and heartache. The documents within an estate plan can satisfy any number of your wishes: outline a distribution of assets, determine who will look after your children (if minors), name your health care agents and health care preferences, protect your minor children from overspending (and third parties), protect distribution of investment and retirement assets, etc.

So how do you know what is right for you?

For those with minor children, you’ll want to think about setting up a Declaration of Guardianship Nomination for your minor children. This will allow you to legally declare who should have legal and physical custody of your minor children if something happens to you. Without declaring your wishes, the court cannot take what you want into consideration. Instead, it will be up to a combination of your relatives and the court system to fight it out and determine the best guardian for your children, without your say.

If you own a home, you may want to consider putting a Living Trust into place. A Living Trust can do wonders for your estate. It can help you avoid probate fees and court costs, maximize your tax exemptions, provide your children with property tax benefits, and much more. It also allows you to determine who will receive distributions in the manner you want, all while keeping it personal and out of the court system.

If you do not have children and do not own a home, a Will may be all you need to outline your wishes. A Last Will and Testament can outline you who want to receive your assets upon your death, and in what manner. Wills go through the probate process in the court system, which can be very expensive (it can cost anywhere form 3-7% of your total estate) and time-consuming, and must follow a number of rules. Because of this, anyone with a large estate, or complicated distribution issues might consider drafting a trust instead. However, those without substantial assets, or a home, may only need a Will to outline their wishes. If your total assets are under a certain amount, even a Will can outline your distribution requests without necessarily needing to go through the probate court. If you’re not sure of your situation, this is a good time to consider consulting with an attorney to outline a plan that best suits your needs.

With investments, bank accounts and retirement assets, there are ways to avoid probate altogether, but be wary of these methods and do your research. Avoid actions such as “Transfer on Death” (TOD) or “Pay on Death” (POD) which may avoid probate, but can have other repercussions relating to gift taxes, loss of assets and more. These methods can be beneficial for specific instances, but can be harmful more often than not.

Finally, don’t forget about a Living Will, which in California is referred to as an Advance Health Care Directive. This is a legal document appointing your health care agents – those you want to make health care decisions for you if you are unable. It also allows you to state your preferences for other health care wishes, such as end-of-life decisions and organ donation.

The best option is usually to find a good lawyer to consult with and go from there – feel free to contact our office for any assistance you may need!

A little talk about Chapter 7 Bankruptcy in San Diego

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Let’s talk a little bit about bankruptcy. In today’s economy, it is extremely easy to get consumed in debt, and more and more individuals are resorting to bankruptcy for a second chance at financial freedom. If you don’t fully understand or know what the term bankruptcy means, it can be described as a monetary “clean slate” – hitting the reset button on life. slide4-new

Before making the decision to actually file for bankruptcy assistance, those considering it should think long and hard about whether they actually need to do it. The process isn’t to be taken lightly and can only be repeated once every eight years, and remains on your credit history for seven to ten years, thus making it important to weigh the decision carefully. Chapter 7 bankruptcy, the “cookie-cutter” version of it, is the most common type and is a relatively simple and effective process to get started. The actual process generally takes only a few months to complete, essentially wiping out some of society’s most crippling of debts. However, it is important to note that not all debts are forgiven through bankruptcy, as there are some which are nearly inescapable. The process is effective at releasing the tension and suffocation from unsecured debts such as credit cards, medical bills, etc. – but does NOT generally render the debtor exempt from obligations such as child support, student loans, taxes, or criminal restitution (although there are circumstances in which some of these may be discharged). Someone who is considering filing for bankruptcy often fits a familiar scenario – an individual who may already be suffering from financial hardship and excessive amounts of debt then encounters an added problem such as unemployment, divorce, injury, loss of insurance, etc. The law defining bankruptcy was designed originally to help people in such circumstances, providing an opportunity to live their lives again without the burden of debt and collection agencies hounding their every move. In the state of California, even before filing bankruptcy, it is possible for a person to protect their assets from being taken away. Under the Exemption Laws of California, it is possible to be “judgement-proof,” preventing unsecured creditors from taking claim of your belongings. although this may not be the best long-term solution. It is even possible to cease their harassing phone calls and letters by contacting the creditors directly, although you must be careful when doing so as offering to pay the debt, or even acknowledging that it is your debt and your intent to pay it can have drastic and negative effects. If you have been experiencing paralyzing financial difficulty and feel as if one of these options may benefit you, make sure to talk to a California bankruptcy lawyer to get some answers and find out what the best option is for you; your financial freedom awaits!