Insight from an experienced fiduciary administration consultant in Fairfax, VA
There is little doubt that estate planning is beneficial. Any estate practitioner can recount numerous heart-breaking stories evidencing the importance of having at least a Last Will and Testament. But is that where all the focus should be? I think not. Some of my most heart-breaking client stories revolve around the failure to have at a minimum one other document—a Durable General Financial Power of Attorney. If that document is not among your most important papers to have ready in case of an emergency, it is time to retain the services of a good estate planning attorney.
Certainly a Will is essential, but the Will only takes effect when you die. What happens, though, if you or a loved one becomes incapacitated? The Will is useless. What you need is a document appointing someone to handle your financial affairs while you are unable to do so yourself. That would be the Durable General Power of Attorney in which you will name the Agent who will have the authority to handle your finances while you cannot. Without it, your financial affairs can suddenly be taken over by someone appointed by the court. It is very possible this person will not be the one you would have chosen. In fact, it is often a total stranger.
Do not be fooled into thinking that putting a joint owner on a couple of accounts solves the problem. In some cases, that can work out fine. Unfortunately, many times there is an essential asset that suddenly needs to be accessed, perhaps for unexpected medical expenses as the result of an accident that caused you to become incapacitated in the first place. Suppose you had decided not to put a joint owner on that account? You are now out of luck, and most likely, the only way that asset can be touched is through court intervention.
While the Will may be the number one essential estate planning document, the Durable General Power of Attorney is a close second, if not an equal. It can be a relatively simple document that is well worth the expense of having an attorney prepare. Believe me, having the court intervene in the handling of your financial affairs is a costly, exasperating process involving the need for someone to account for every penny of your funds. It is absolutely something you want to avoid.
If you need more convincing, give me a call. I can tell you some absolutely true nightmare stories about clients that did not have a Durable General Power of Attorney. I can also tell you why a Revocable Living Trust is something well worth discussing with your attorney. In fact, the Revocable Living Trust and why you should consider having one will most likely be the topic of my next blog, so stay tuned! Consulting an experienced Fairfax, VA Estate Planning Service can help ease the stress of the financial administration of any estate.