The other day I got a call from a daughter whose mother had fallen and broken her leg.  She explained that her mother had been declining both physically and mentally for several months.  Friends had advised the daughter to get a power of attorney.  The daughter asked me, “What is a power of attorney and do I need one?”  This question illustrates the fact that a senior who has a health problem has a financial and a legal problem too.  If a senior becomes incapacitated, who will make decisions and act for the senior in his or her financial and business matters?

 

A power of attorney is a document that evidences the authority of one person to act for another, known as an agency relationship.  Using a power of attorney, you (the principal) grant legal rights and powers to another (the agent or attorney-in-fact.)  Your agent stands in your shoes and can make financial decisions for you.  For individuals coping with dementia, this type of financial assistance is essential.  However, before executing a power of attorney you should know these important facts:

 

• A power of attorney authorizes your agent to make decisions concerning your property. Your agent can do whatever you may do—withdraw funds from bank accounts, trade stock, pay bills, cash checks, deed property—unless limited in the power of attorney.

 

• The power of attorney does not authorize your agent to make health care decisions for you.

 

• Unless a power of attorney is springing—taking effect only if you become incapacitated—it takes effect as soon as it is signed.

 

• You should select someone you trust to serve as your agent. Your agent’s authority will continue until your death unless you revoke the power of attorney or your agent resigns.

 

• Your agent is entitled to reasonable compensation unless you state otherwise in the Special Instructions.

 

• You may revoke the power of attorney at any time by sending your agent a letter that the power of attorney is revoked

 

• The law governing powers of attorney is explained in the Uniform Power of Attorney Act, chapter 12, title 15, Idaho Code.

 

In addition to making a power of attorney for financial matters, you should also make a living will and durable power of attorney for health care.  With these two documents, many times the need for a guardianship/conservatorship can be avoided in case of incapacity.  In next month’s tip we will discuss living wills and durable power of attorney for health care.

 

Tom Packer is an Elder Care Attorney serving all of Southeast Idaho and is a licensed Nursing Home Administrator.

 

Visit www.packereldercarelaw.com.

Last month, we talked about giving your home to your children during your life time.  This month we will discuss property transfers that occur after death.

 

The following is a brief outline of the some of the methods used to transfer property after death:

 

1. Life Estate Deed: A deed retaining a life estate allows you to convey your ownership interest in your home to your children, but retain control of your home until you pass away.
2. Community Property Right of Survivorship: If a deed declares that your home is community property with a right of survivorship, your home will go to the surviving spouse without having to go through probate.
3. Revocable Living Trust: If you transfer your home to a trust, it is held by the trustee for the benefit of another.  When you pass away, the terms of the trust determine to whom the property will be given.
4. Will: A will is the legal expression of your desires as to the disposition of property after your death.  Your personal representative will transfer your home to whomever you have designated in your will.
5. Intestate Succession: If you have not done anything to transfer your home before your death, the Idaho Uniform Probate Code will designate to whom your home will be given.
6. Probate: Probate is the legal process whereby a personal representative is named and your property is gathered and re-distributed under the direction of the courts. Probate only applies to wills and intestate succession.
7. Affidavit of Heirship: If you have not used any of the above methods to transfer your home before your death; after three years, your heirs can record an affidavit of heirship, which will transfer the property to them.

 

These methods have specific rules that must be followed to accomplish the transfer of your home.  You may

want to seek the advice of an attorney to help choose the method that will be best for your situation.

 

The content here is not intended to be legal advice.  If you have a specific question, you should consult with an attorney.

 

Tom Packer is an Elder Care Attorney serving all of Southeast Idaho.  As a Life Care Planning law firm, the Elder Care Practice of Tom Packer offers a holistic solution for families struggling with the demands of an elderly loved one’s care.

Home Sweet Home

 

For most of us, our home is our biggest investment and our most valuable asset.  But, a home is more than just a number on a ledger sheet.  Within the walls of our homes, our families have lived, loved and learned the lessons of life.  Seniors frequently want to leave their homes to their families.

 

When is the best time to transfer the home to the family:  during life or after death?  Each transfer has specific rules and consequences that are important to understand.  Today’s Tip will discuss life-time transfers; Augusts’ tip will discuss transfers that take place after death.

 

A recorded gift deed will transfer the title of your home to your family.  The following are some of the consequences of transferring your home during your lifetime:

 

ADVANTAGES:

• Your family will not have to file for probate to obtain the title to your home.

DISADVANTAGES:

• Once your children own the property, they are in complete control—they can sell or mortgage your property without your permission.
• If your children are faced with bankruptcy or divorce, your home could be used to satisfy their creditors or be divided in their divorce.
• You will lose your homestead exemption, and your property taxes will increase.
• After gifting your home, you will be ineligible for Medicaid for 5 years unless your children reconvey your home back to you.
• When your family sells your home after you are gone, they will have to pay capital gains tax. If your property has appreciated in value, this tax could be substantial.

 

Wills, trusts and nonprobate transfers are used to transfer a home after death.  The consequences of using these methods will be the subject of our next Senior Tip.

 

The content here is not intended to be legal advice.  If you have a specific question, you should consult with an attorney.

 

Tom Packer is an Elder Care Attorney serving all of Southeast Idaho.  As a Life Care Planning law firm, the Elder Care Practice of Tom Packer offers a holistic solution for families struggling with the demands of an elderly loved one’s care.