Creating and Protecting Personal and Financial Legal Rights
June 2011 | Ray Koenig, III, Esq.
Proper planning can ensure that your wishes are carried out by the person of your choice in the event of your incapacity. Without proper planning, someone may be appointed to make medical and financial decisions for you, which might not be in accord with your wishes.
Personal Legal Rights
- Living Wills are also known as advance directives or medical directives.
- A Living Will generally directs that no extraordinary medical treatment be undertaken when there is no reasonable expectation of recovery.
- Depending on the state, a Power of Attorney for Health Care may trump a Living Will and is far more comprehensive than a Living Will. Thus, you are likely better protected by executing a Power of Attorney for Health Care than simply executing a Living Will.
Power of Attorney for Health Care (POAHC)
- A POAHC is a document that appoints an agent to make health care decisions on your behalf if you become incapacitated. People generally appoint their partners, close friends or family members, or private agencies to serve as their agents under POAHC.
- The POAHC gives your agent general directives regarding the type of care you want but does not include specific guidelines for every health scenario you may experience. The POAHC intentionally grants the agent broad powers in order to allow the agent to respond to all medical situations, based on his or her understanding of what you would do if you were capable.
- The POAHC allows you to dictate whether you want to be an organ donor and the degree of end-of-life medical care you want.
- The POAHC is also useful because if drafted properly it allows your doctor or the hospital to release all necessary medical information to your agent.
- A Power of Attorney for Health Care is known by various names throughout the United States.
Financial Legal Rights
Power of Attorney for Property (POAP)
- A POAP is a document that appoints an agent to manage your financial affairs if you become incapacitated. People generally appoint their partners, close friends or family members, or private agencies to serve as their agents under POAP.
- A POAP is useful to manage assets that cannot be owned jointly such as Health Savings Accounts, IRAs, Retirement Plans, or property that has not been put into a trust.
- Please note that Powers of Attorney for Health Care and Property can be and are frequently combined into one document commonly known as a power of attorney or a durable power of attorney.
- A Revocable Trust is a trust that is created by you while you are still alive. It is a tool that transfers your assets to a Trustee to hold and manage for your benefit. During your life you may be the trustee and you can name your partner or any other individual (or certain financial institutions) to act as successor trustee upon your incapacity or death.
- If you have a Revocable Trust and become incapacitated, the successor trustee can manage your financial affairs as you direct pursuant to the trust agreement.
- The terms of a Revocable Trust can be changed and amended as often as you like during your lifetime, so long as you have capacity.
- A Revocable Trust can also include provisions to protect your partner or any other individuals (i.e., identify him or her as an income beneficiary to whom money or property is given during his or her life).
- The benefit of creating a Revocable Trust is that it allows you to determine how you want your money and property managed in the event of your incapacity and who you want to manage it. Through a Revocable Trust you can ensure that you and your partner or any other individuals will be financially taken care of in a manner that you direct.
Another benefit of a Revocable Trust is that it maintains your privacy. The trust itself is a private document that is only viewed by the trustee(s) and beneficiaries. Thus, your assets and the distribution provisions in the trust are only known to a select group of individuals. In contrast, if a guardian of the estate is appointed for you, your asset information is made public.
Ray J. Koenig III, is a member in Clark Hill’s Litigation Practice Group in its Chicago office. He practices in the areas of probate litigation, trust litigation, fiduciary litigation, elder law, estate planning, and estate administration, with an emphasis on will, trust, guardianship, and advance directive contests and other fiduciary litigation. Ray has vast experience representing same-sex couples and LGBT individuals, and is frequently asked by community groups to speak on the complex planning issues facing members of the LGBT community.