Magazine article Work & Family Life

Planning Ahead for a Health Care Emergency

Magazine article Work & Family Life

Planning Ahead for a Health Care Emergency

Article excerpt

Elder Issues

Let's say that you or an older relative got into an accident and found yourself in the Intensive Care Unit of a hospital. If everything you own is in your name alone, no one, not even a spouse, a son or a daughter, would have access to your bank account or your brokerage account. No one else could write checks to pay your rent, your mortgage or premiums on your car and life insurance.

Power of attorney for financial matters

One solution to this dilemma would be to go to court and have a guardian appointed. But a simple guardianship order, which is what a relative would need to obtain, could take up to six months, and the legal fees would range between $5000 and $10,000 or even more if there were complications.

The alternative is to set up in advance a "Durable Power of Attorney." This document allows you to appoint one or more people whom you trust to act for you in financial matters if you are unable to take action or make your own financial decisions. This differs from other powers of attorney that end when the person loses mental capacity. The Durable Power of Attorney remains in effect for as long as you live provided you don't change it. When you die, your "Last Will and Testament" takes over.

Power of attorney forms are available for under a dollar and the only other cost is a few dollars to have the document notarized. Each person you appoint should sign the document individually, but you should clearly indicate your order of choice-and that only one person should act at a time. If you live in two states, appoint someone in the state you spend most of your time in. The form will go into effect as soon as you sign it. Note that some financial institutions want you to use their own forms. Once you have the form signed and notarized, do not put it in a safe deposit box. If something happens to you, your agent would not be able to gain access to the form unless he or she was also a cosigner for your safe deposit box. …

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