Magazine article Work & Family Life

Planning Ahead for a Health Emergency

Magazine article Work & Family Life

Planning Ahead for a Health Emergency

Article excerpt

Let's say that you or an older relative were involved in 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 the premiums on your car and life insurance.

Set up a "Durable Power of Attorney" for financial matters

One solution to this all- too-common 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 $5,000 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 readily available for $1 or so, and many states offer free power of attorney forms that can be downloaded from their .gov websites. The cost to implement your "Durable Power of Attorney" would be only 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, it's best to 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. …

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