Your Estate Plan is not just a plan for when you pass away

Your Estate Plan is not just a plan for when you pass away. A Trust and a Durable Power of Attorney work together during your lifetime.

Do not make the mistake of thinking that not having an estate plan only matters when you die.

Let’s talk about how your estate plan takes care of you during your life.

When you begin and fund your major assets into a Trust, that Trust is going to provide for you during life in a number of ways; let’s use an example of “Ron and Dorothy”:

  1. Ron and Dorothy can use any assets of their trust, sell, trade or lease out assets in their Trust during life;
  2. Suppose either Ron or Dorothy reach a point where their capacity is somewhat or extremely diminished; the other can continue to act as Trustee of Trust and even add one of their children as Co-Trustee if they like, and of course, the Trust assets can be used for regular life things for the well spouse and for the spouse who now has a diminished capacity … and importantly this is nearly seamless … neither needs any court or legal action to be able to access Trust assets and care for their spouse;
  3. Suppose Ron passes away; just as before, the Trust assets remain available for Dorothy’s life, care and support whether she was the one with diminished capacity or not; if she’s fine, she manages assets of the Trust, and if not, one or more of her children become Co-Trustees to handle those things; either way, the Trust assets are available for the survivor for their life

How about the Durable Power of Attorney.

Let’s stay with Ron and Dorothy. They were smart and signed powers of attorney, naming one another to be able to act on their behalf, so long as they are alive, for healthcare and financial/property matters.

If we suppose that one of them begins to suffer from dementia, and needs assistance. They are ahead of the problem. Rather than one of them seeking appointment by the Court to act for the other as Guardian (for health and person) and Conservator (for property and financial matters), they are already empowered to act under the Durable Power of Attorney. By the way, it is called “durable” because it remains effective during periods of absence or incapacity of the principal (the one who signed the document naming the other). 

With the Durable Power of Attorney, the well spouse can take care of a great variety of things on behalf of their spouse:

  • Banking, taxes, insurance;
  • Legal matters, claims and settlements;
  • purchase/sale/lease of real estate and vehicles;
  • Financial management and speaking/acting on his/her behalf with representatives;
  • Acting/speaking for the other with respect to medical visits, information and decisions; and even
  • Small things like subscriptions, library books and utilities.

And, that is by no means an exhaustive list … those are only common examples.

So, do not go on believing that estate planning is only for when you pass away. It is important long before that for a number of reasons. Moreover, if you get to a point during life that you no longer have capacity, it can be too late to sign an estate plan, and your spouse and family may need to go through the expense, process and time of going to court to get you a Guardian and Conservator appointed. While it may seem less than logical, your spouse (without a Power of Attorney or court appointment) does not have some automatic authority to act on your behalf.

Your Estate Plan is not just a plan for when you pass away. A Trust and a Durable Power of Attorney work together during your lifetime.