Family caregivers are doing their loved ones (and themselves) a great disservice by not using available legal resources to make appropriate decisions regarding the safety, health and finances of those they look after.

Most people have aspirations of wealth building and preservation. Few understand what it takes to ensure lasting financial health and wealth that will secure a legacy.

That is why the most crucial step any caregiver can take is finding an estate planning attorney who can help prepare five essential legal documents.

Durable Power of Attorney: This document is extremely important as it designates a representative to handle the financial affairs of the care recipient. When a family member or loved one is unable to make wise financial decisions, the durable power of attorney grants narrow and broad powers to execute on their behalf.

Common broad powers include activities such as opening mail, paying everyday expenses, filing and paying taxes, maintaining property, collecting Social Security benefits investing money, executing bank transactions, filing insurance claims, operating a business, and managing retirement accounts.

Should the mental state of the care recipient diminish to the point of incompetence before a durable power of attorney has been established, a more intensive process ensues. A guardianship will have to be created and a judge will oversee the process. A bond may also be required, and court approval is often needed to dispose of real estate or to make financial investment decisions.

This time-consuming and expensive process can be avoided with proper advance planning.

Last Will and Testament: Will preparation is a crucial component of estate planning because it acts as the final word regarding the transfer of property. If a family member dies without a will, state law will indicate what happens to the property. Based on the family situation, the state’s plan may be inconsistent with the true desires of the family member.

Beyond property, another key benefit to having a will is the designation of a guardian for minor children. This is a decision that should not be made by the courts. A will is also used to identify the person — or executor — responsible for making sure personal wishes regarding estate assets are carried out and to avoid court conflicts over who should serve in this important role.

Some people succumb to the temptation of preparing wills using “Do It Yourself” legal drafting software or self-help materials from the public library or local bookstores. Preparing legal documents without the benefit of legal advice can result in unnecessary hardship and unintended consequences. 

Designation of Healthcare Surrogate: A healthcare surrogate acts on behalf of the care recipient by making important health care decisions. While such decisions include terminating life support, the surrogate is specifically limited to health care and medically related matters.

Surrogacy can be activated when a family member or loved one becomes temporarily unconscious, confused, or unable to communicate medical desires. A healthcare surrogate typically has the power to authorize routine medical tests and surgery.

This document will effectively allow timely permission and consent so that proper care can be provided. It is important for the care recipient to execute this document while mentally alert to have the capacity to grant or transfer such a power to another person.

The document should also include a HIPAA statement, the Health Insurance Portability and Accountability Act of 1996. The law was created to protect a patient’s medical information and records from being released with written permission.

A HIPPA Release authorizes all healthcare providers to release information to the healthcare surrogate when the patient is unable to make medical decisions. Having this document saves time and money by providing the surrogate with access to records he or she would normally need a court order to obtain.

Living Will: A living will is a document that allows a person to express their wishes concerning life support if he or she becomes incapacitated. The basic purpose of a living will is to make a decision, in advance, whether or not life will be prolonged by life-support methods.

Because family members may not agree on the best course of action, it is best to make personal wishes known, not only orally, but also in writing.

A living will sets forth the conditions under which life support can be removed, and allows a physician to lawfully withhold artificial respiration, nutrition or hydration, thus allowing a person to pass away naturally.
Revocable (Living) Trust: Most people assume that trusts are for the very wealthy and the average person does not need a trust. This assumption does not necessarily apply to a revocable trust.

Unlike a will, which comes effective only after death, a revocable trust is effective while still alive. Through a revocable trust, decisions about how property is managed before and after death can be made.

The conditions of the trust vary on an individual basis and can include decisions that determine the age children can receive assets, require certain behaviors (like attending college), limit payout provisions to beneficiaries, and provide protection against beneficiary creditors.

If handled properly, a revocable trust can eliminate the need to probate.


Editor’s note: Phyllis Smith, J.D., LL.M., is an associate professor in the College of Law at Florida A&M University. Join Family caregivers are doing their loved ones (and themselves) a great disservice by not using available legal resources to make appropriate decisions regarding the safety, health and finances of those they look after.

Phyllis Smith has practiced law for approximately eight years as a commissioned officer and attorney in the United States Army Judge Advocate General’s Corps (JAG) where she provided estate planning needs to soldiers serving throughout the country and overseas. Editor’s note: She is also an associate professor in the College of Law at Florida A&M University. Join Smith on Twitter for a live chat on Nov. 29 at 6 p.m. for answers to your legal questions on being a family caregiver. Follow @FAMU_LivingWell