There are many people who have heard of the problems surrounding probate administration, mainly the costs and time involved to administer a probate estate. However, one aspect that many families fail to consider or fail to plan for is regarding what to do in the event that a person becomes incapacitated. There are many attorneys, including myself, who refer to this failure to plan as Living Probate.
Let’s Look at the Story of John
John had only one child, Jane. John’s wife Mary had died several years ago. Being the responsible person that John was, he visited an attorney and had his will drafted. In addition, he completed Durable Power of Attorney, Healthcare Power of Attorney, Living Will, and an Advanced Healthcare Directive. One day, John suffered from a stroke. Fortunately, John survived his stroke, but the stroke was going to have lasting effects. In fact, he would need to enter a nursing home once he was released from the hospital. Jane, being the agent on his power of attorney document, began to act on his behalf regarding all of John’s financial accounts, including spending some money to make arrangements for John’s eventual admittance to the nursing home. However, to Jane’s surprise, she was not able to access any of John’s accounts. At each financial institution that she spoke to she heard such things as … “this power of attorney is not on our required form” … “our legal department says this power of attorney is missing certain language” … and even “this power of attorney is 11 years old, and we have reason to believe it is no longer valid. Therefore, we are not going to honor this power of attorney.”
Jane was left with no other alternative but to go to court and initiate a conservatorship proceeding so that she could make decisions on John’s behalf and access John’s financial accounts so that she could take care of all the necessary items on John’s behalf. Jane had to hire an attorney, purchase an insurance bond, and two months and several thousands of dollars later, she was able to make decisions on her father’s behalf.
Unfortunately, John’s story is all too familiar. Many people believe that all they need is a simple will and a power of attorney and everything will work out. However, that is simply not the case. Throughout my time representing clients in these matters I have heard many of the excuses above from financial institutions. Not to mention, there is the Uniform Power of Attorney Act. This Act states that a financial institution can refuse to honor a power of attorney if they have reason to believe the power of attorney is no longer valid.
For More Information
Before you make the mistake that you have a simple situation, make sure you have your estate and legacy plan reviewed and updated periodically so that you avoid your family going through Living Probate.
If you have questions regarding the necessary legal protections that you need for you and your family, then please contact our office today at (513) 241-0400 or use the contact form available on our website to schedule a time to visit with one of our estate planning attorneys. We look forward to hearing from you.