Who Does What

Unless you handle estate planning and elder law issues every day, it can be confusing about what person or document you need to handle your legal and financial affairs, if you cannot handle them yourself due to sickness, death or absence.

Let’s start for everyone over 18, the age of majority. Assuming that person is competent, it is wise to have one or more trusted persons named in a power of attorney to handle financial affairs in case of incapacity. That person used to be called an “attorney in fact”, which was confusing, so about five years ago the power of attorney law in Connecticut changed the designation to “agent”.

That power of attorney document usually has the power to handle bank accounts, investments, contracts, real estate, and most anything having to do with your property. It does not include making medical decisions or end of life decisions. That is what a living will, also called a health care directive, is for. If you have children in college, or being assigned out of country in the military, they should have a power of attorney so you or some other family member can take care of monthly bills and deposits if they cannot.

The power of attorney is absolutely critical for any married couple as they grow
older, because if one suddenly needs long term care, and cannot sign for himself or herself, a properly drawn power of attorney will allow transfers to be made to the healthy spouse and qualify for government paid care services through the VA, or one or more of Connecticut’s home care or nursing home programs. It is important to know that a power of attorney ends upon your death, and your agent no longer has power to handle your assets and financial affairs.

For health care decisions, the living will is critical if you become incapable of making
those decisions due to accident or dementia. There are two parts of it. One is the designation of a health care representative, if you are incapable of making care decisions. The second part is the health care directive that states what procedures you want and do not want for treatment if you cannot express those wishes to your doctor yourself. If you are capable of making decisions, the doctors will do what you say, but if you are not capable, the doctors can then follow the direction of your representative.

Health care directives are often confused with a “Do Not Resuscitate” (DNR) order. In
Connecticut that can only be issued by a doctor. But it is important to have that health care directive in place because if a doctor is going to issue a DNR, the person named as the healthcare representative will be consulted. The person you choose for your representative should have good judgment, know your wishes for end-of-life decisions, and have the emotional strength to make that difficult decision. Some children could never say “stop the machines” no matter how hopeless the situation, so a different family member would be better in that circumstance.

Once a person dies, the power of attorney is no longer valid, and that is when an Executor (in a will) or an administrator (if no will) is appointed by a probate Court to handle the estate, if there is a probate estate. Either way the probate court supervises the process to ensure the proper heirs get the property.

Another way to handle property while alive and after death is by putting property into a trust, and naming someone as Trustee in case you become incapable. To be clear, there are numerous variations of trusts, both revocable and irrevocable and this article cannot address all of those variations, but is important to pick someone as trustee who will carry out the terms of the trust. Depending on the purpose, the kind of assets and the family situation, that person might be yourself, a family member, your accountant, your lawyer or a trust company. The important thing to remember is that the Trustee is in control of those assets in the trust and continues in control for as long as there are assets to manage, until all assets paid out to the beneficiaries.

In summary, a health care directive and designation of health care representative is for medical decisions while you are alive. A power of attorney, naming an agent, is for financial decisions while you are alive for assets that are in your name. Upon your death an executor or administrator handles those assets that don’t go directly to your heirs. And a trustee can handle those assets you put into a trust both during life and after, because those assets do not go through probate. There is no one size fits all, but in general, everyone should have a power of attorney, a living will with designation of health care representative and a will or living trust or both. It depends on age, health, family situation, and size and kind of assets.