Protecting Your Life Savings

HOW TO PREVENT CLASHES FOR THE

CONTROL OF YOUR ASSETS IN THE EVENT OF INCAPACITY

By: Anthony J. Enea, Esq.*

As society has become more litigious, it has become commonplace for siblings, family members and friends to battle for control of the finances and care of their aging parents and loved ones.  While the litigation may superficially be for the authority to make day to day financial and health care decisions, sadly, often at the root of the litigation is inheritance and monetary control.

It is anticipated that controversies and court fights involving aging parents, such as litigated guardianship proceedings, will rapidly grow in direct proportion to the aging population of the United States.  Additionally, another relevant factor is that the largest transfer of inter-generational wealth, estimated to be approximately 10 trillion dollars, will be transferred from the World War II generation to the "baby boomers".  The transfer of such a great amount of wealth, will inherently be the source of conflict and controversy.

Unfortunately, the victim in these controversies is often the family unit.  I have witnessed first hand the bitterness, resentment and destruction of relationships among parents, siblings and loved ones.  The effect is best described as a "family divorce", the impact of which may be felt for generations.

Fortunately, there are steps that can be undertaken to minimize the risk of such controversies affecting their families.  As is often the case, it is imperative that the potential solutions be implemented well before the problems begin to manifest themselves.  Some potential solutions are:

(a)  Execute a general durable power of attorney, with very broad powers being given to the agent.  If the general power of attorney is durable, its efficacy will continue even after the subsequent disability or incompetence of the principal.  I often recommend for most seniors that the power of attorney grant the agent broad powers, including broad gifting powers.  This is especially important when it becomes necessary for the agent to engage in asset protection and estate planning.  It is best to utilize a customized form which grants the agent the broadest powers.  In my opinion the standard Blumberg Form Power of Attorney is too limiting and restrictive, especially in the area of gifting powers.

The selection of the individual or individuals whom will be the agent(s) in the power of attorney is a decision of great importance.  The individual selected must be someone one has a great deal of trust and confidence in.  If the attorneys-in-fact will have broad powers, including unlimited gifting powers, the attorney may wish to counsel the client to consider appointing two attorneys-in-fact who will be required to act jointly.

(b)  Execute a health care proxy, wherein a health care agent is selected.  One should provide a copy of the health care proxy to his or her physician.  The individual selected is permitted by New York Law to make all health care decisions when the principal is no longer able to make these decisions.  The health care proxy can specify which treatments and medical care one wishes and does not wish to have administered.  Under New York Law only one health care agent at a time can be designated in the health care proxy.  The principal should take the time to tell his or her agent exactly what his or her wishes are with respect to medical care and specifically end of life decisions, e.g. the use of ventilators and respirators.

(c)  Execute a living will, wherein one states his or her wishes not to be kept alive by extraordinary measures.  While a living will is not statutorily recognized in New York, it still additional written evidence of one=s wish not to be kept alive by extraordinary measures.

(d)  Execute a Do Not Resuscitate Order (ADNR@) which is executed by the individual and his or her physician.  The DNR can explicitly specify the circumstance wherein an individual does not want to be resuscitated.  I often recommend that the client keep a pocket DNR in his or her wallet and purse, on the refrigerator and to provide copies to loved ones.