Do I Need a Financial Power of Attorney?

670px-Write-a-Medical-Power-of-Attorney-Step-4If you have income or property, a Financial Power of Attorney can be an essential tool for you. It is especially important if you are ill and are worried that your illness may hinder you from handling your own financial affairs.

Why Should I Sign a Financial Power of Attorney?

Signing a Financial Power of Attorney will assign someone you trust to handle your finances should you become unable to do so. They will be able to pay your bills and do any banking that is required, and handle insurance benefits and paperwork for you.

Will It Help to Avoid Conservatorship or Guardianship Hearings?

If you have a Financial Power of Attorney in place, your loved ones will not have to go to court to be able to take over your financial matters. These proceedings can be very expensive and can also become public record that may be published in the newspaper. Relatives often fight over who should take control of your finances. To avoid the embarrassment and ugly public fighting, not to mention the expense, you will want to have a Financial Power of Attorney in place well in advance.

Do You Fear a Family Fight?

Once you finalize your appointment for your Financial Power of Attorney, anyone choosing to challenge it will be fighting a battle they will not likely win. If you suspect that your family might challenge your decision, a guardianship or conservatorship might be an option to consider.

If you do not have someone you trust well enough to appoint as your agent for a Financial Power of Attorney, a guardianship or conservatorship, with added court supervision, could be set up as an alternative. This is something that should be discussed with a trusted legal advisor.

What if I am Married?

If you are married, you might not think that you need a Financial Power of Attorney, but this is not the case. Your spouse has some authority, but it is limited. For example, if you have property that is in both of your names, then you both must agree to a sale. This includes cars and property. A Financial Power of Attorney will give your spouse permission to sell joint property if necessary. If there is no p Financial Power of Attorney, your spouse won’t be able to do anything without first going to court. This is also true if the property in question is in your name only.

What About a Living Trust?

A living trust can be helpful if you become unable to take care of your financial matters, but it is not a substitute for a Financial Power of Attorney. The trustee that will allocate the trust property after your death also has the authority, in most cases, to take over managing the trust property if you become ill.

However, the trustee does not have authority over any property that is not held in the trust. Not many people put all of their property in a living trust, such as real estate or securities. They usually only put things in a living trust that would be expensive in the probate process.

A Financial Power of Attorney is a legally powerful document. For more information on setting up a Financial Power of Attorney or if you would like to know more about your options, CONTACT Sherer Law Offices for a consultation.

Do I Need a Special Needs Trust If I Have a Child With Special Needs or a Disability?

Special-Needs-Trusts-resized-600.jpgParents who care for a child with a physical or mental disability know how much that care can cost.  For this reason, parents need to create a plan to make sure that their child will continue to be properly cared for if both parents pass away.

The government may provide for the basic needs of the child such as food, clothing, housing and health care through Supplemental Security Income (SSI) and Medicaid, but what about extra expenses that would benefit the child’s quality of life? This is where a Supplemental Needs Trust comes in.

What Is a Supplemental Needs Trust?

A Supplemental Needs Trust, (sometimes called a Special Needs Trust) is a legal document that is designed to help a person who has a disability. This Trust is called a “stand alone” document, but it can also be part of a Last Will and Testament.

Supplemental Needs Trusts have been used for many years. They are used to benefit an individual who is under the age of 65 and disabled according to Social Security guidelines. Each Trust is its own “entity” with its own Federal Identification Number issued by the IRS. The Trust is not registered under the parent or child’s social security number.

What Can a Supplemental Needs Trust Be Used For?

According to law, the Trust can be used for “supplemental and extra care over and above what the government provides.” In other words, the Trust provides additional benefits beyond what is covered by government programs for the disabled. For example, if a beneficiary falls into the Medicare “doughnut hole,” a Special Needs Trust will make up for the shortfall.

Why Create a Supplemental Needs Trust Instead of Leaving Cash?

We do not recommend that you plan to leave a large sum of cash for your special needs child in the event of your passing.  If you don’t plan carefully you could jeopardize the ability for your loved one to collect the government benefits to which they are entitled.  Just having cash in the bank will disqualify your loved one from receiving SSI or Medicaid.  To avoid this situation you must set up a Special Needs Trust.  You will also need to choose a trustee to be in charge of the money.  With a trustee in charge, your loved one will not be in control of the money; therefore, SSI and Medicaid officials will ignore the Trust when determining your loved one’s eligibility for benefits.

Be aware that a Supplement Needs Trust is different from other types of family trusts. An experienced lawyer will explain that a general trust would not be appropriate for someone with special needs because it would not address the specific needs of the disabled person.

What Must a Supplemental Needs Trust Say?

At a minimum, the Trust should say that it is for the sole purpose to provide “supplemental and extra care over and above what the government provides.” The Trust must also state that it is NOT intended to be a Basic Support Trust.

When Should I Create a Supplemental Need Trust?

The Trust can be established at any time before the beneficiary’s 65th birthday, but it is best to create the Trust early in a child’s life. A Supplemental Needs Trust is an excellent estate-planning tool that serves as a long-term solution for holding assets to meet the needs of a disabled family member.

Can Any Lawyer Create a Supplemental Needs Trust?

A parent who wants to plan for the maximum benefit of their special needs child is advised to consult a lawyer that specializes in special needs issues. A Trust can be easily “invaded” by the government if the proper language is not used in writing the Trust. A poorly written Trust can cause a loss of benefits and a host of serious legal issues for the beneficiary and the trustee.

Supplemental Needs Trusts can be very complicated. If you are considering setting one up for your loved one, call 618-692-6656 or CONTACT one of the experienced family law attorneys at Sherer Law Offices to schedule a legal consultation today.

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