Sunday, April 24, 2005 11:00 PM
At a minimum every adult should have a Will, a "Living Will," and a general, durable Power of Attorney.
Whether you die testate (having signed a Will) or intestate (without having), inevitably there will be estate administration tasks someone must perform (e.g., close bank accounts; sign correcting Deed; interface with life insurance company; et cetera). If you die testate, thus having authorized a named "executor" to perform these tasks, the transition will be smooth; however, if you die intestate, a loved one will be forced to initiate proceedings in the probate court seeking to be named your "administrator." You could have avoided this expense and delay if only you had had a Will in place.
If you die without a Will, the probate judge (not you) decides who will administer your estate.
If you die without a Will, the probate judge (not you) decides who will be the guardian of your minor children and their assets.
If you die without a Will, your surviving spouse will probably have to report to the probate court at regular intervals to account for how, why, and where s/he has been spending your children's inheritance.
If you die without a Will, your administrator (even if that person is your surviving spouse) will have to purchase a performance bond to insure the exercise of good judgment in the handling and spending of your children's inheritance.
If you die without a Will, when your child reaches age 18 years, he has the right to demand that your spouse (his parent) provide a complete accounting of all financial transactions pertaining to his interitance.
If you die without a Will, when your child reaches age 18 years, he is entitled to receive his inheritance whether or not he is ready to manage it.
If you die without a Will, you will have maximized the federal and state death taxes payable as a result of your death or the subsequent death of your surviving spouse.
If you die without a Will, state law determines who gets your property and in what proportions. For example:
A "Living Will" speaks for you when (a) you are no longer able to communicate your medical treatment wishes for yourself, AND (b) you are in the final days or weeks of a terminal condition, or else in a permanent vegetative state.
In the limited circumstance just described, a "Living Will" communicates to doctors and other medical professionals what life sustaining treatment you want, and what life sustaining treatment you don't want, and names a batting order of persons doctors can and should turn to for further clarity.
In New Jersey at least, a "Living Will" also names one or more "Health Care Representatives"; i.e., person or persons who know your wishes, who will honor your wishes, and to whom doctors and hospital personnel are to turn for further guidance should the terms of your "Living Will" be somehow unenlightening.
If you have strong feelings one way or the other about the Terri Schiavo and Karen Ann Quinlan cases, then you need a "Living Will."
WHY A GENERAL, DURABLE POWER OF ATTORNEY
The day may come when, due to a physical and/or mental disability, you can no longer care for yourself and your property. The law, however, continues to assume that you are competent to manage your affairs and continues to look to you, not others, to make decisions affecting your person and your property. Friends and loved ones do not automatically have the legal right to step into your shoes for these purposes. Sometimes they get away with it because a particular bank teller did not know any better; but if the bank, or your doctor or the IRS were to question by what legal authority the well-meaning loved one was acting on your behalf, there would suddenly be a problem.
If you had signed a general, durable Power of Attorney while still of sound mind, then the person you had named your "agent" would have legal authority to seize the reins and come to your aid without court intervention. But if you become mentally disabled (and therefore no longer competent to sign legal documents) without having signed a general, durable Power of Attorney, then get this: a loved one must sue you in New Jersey Superior Court asking that you be declared incompetent and s/he be appointed your guardian.
Be advised: Guardianship proceedings are lengthy, costly, and distasteful.
True story: Attorney David G. Christoffersen once represented the elderly wife of an Alzheimer's patient. When husband became too much for wife to manage at home, she drove him to a Veterans Hospital. Even though they were legally married (and he a veteran), the V.A. would not admit him because (A) he was no longer mentally competent (thus not able to consent to his own admission to the hospital), (B) when he was still mentally competent he had not signed a general, durable Power of Attorney naming wife his agent (and now he was no longer mentally competent to sign such a document), and (C) husband had not been declared incompetent by a court of law and wife appointed his guardian.
Moral: Not even one's spouse has the legal authority to act on one's behalf simply by virtue of being one's spouse.
A general, durable Power of Attorney is like an insurance policy in that you may never need it (i.e., you may never become so diabled that you need another to step in to manage your affairs), but heaven help you if you ever do.
A Power of Attorney can be general or limited. It can take effect upon signing, or only upon the happening of some future event (such as your becoming disabled).
A Power of Attorney should name a batting order of agents. We strongly advise against naming a committee of two or more to serve as co-agents.
Attorney David G. Christoffersen has a Masters Degree in Tax Law from Georgetown University Law Center in Washington, D.C. and has been advising clients on tax law and estate planning issues since 1988.
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