Power of Attorney Requires Trust

February 20, 2025

If you think of an immediate power of attorney, take your time and decide carefully. When you create a power of attorney, the authority granted in that document can be immediately effective or alternatively can be activated only by documented proof that you are incapable of acting. Everything in life has its advantages and disadvantages. The immediate power of attorney is excellent because it is very easy to use. It can be not so great because it is equally easy to misuse. However, that requires some very careful thought before making the decision, according to the Glen Rose Reporter in “Should you add hot powers to your power of attorney?” The “hot” powers are well-named since they give a financial power of attorney considerable power. This gives an agent a lot of leeway during one’s lifetime. It allows the agent to create, amend, revoke, or terminate a trust during the principal’s lifetime. The agent may also be given the power to make gifts to themselves or others. They can also include other special powers, such as the powers to create or change rights of survivorship, create or change a beneficiary designation, and authorize another person to exercise the authority granted under the power of attorney. These extraordinary powers can be very helpful for long-term care planning if someone is currently or will soon need nursing home care. The agent’s gifts are further limited to being consistent with the principal’s objectives if the agent knows what those objectives are. However, if the agent does not know what those objectives are, he or she must still make sure the gift is aligned with the principal’s best interest based on the value and nature of the principal’s property, foreseeable obligation, and the need for maintenance. The person holding the power of attorney needs to know their responsibilities, and if they are given “hot” powers, they need to be informed what those specific powers are. If the agent is someone other than a spouse or descendant, that agent may not make gifts to themselves. A spouse or descendant, however, could make gifts to themselves. It boils down to the degree of confidence you have in the person you are empowering in your power of attorney. The person does not need to be a financial genius. They can hire advisors. However, there is no replacement for trustworthiness. Reference: Glen Rose Reporter (Jan. 3, 2019) “Should you add hot powers to your power of attorney?” Estate Planning Attorney Can Help Avoid Family Feuds

Think of Estate Planning as Gift of Love

February 19, 2025

Estate planning isn’t about focusing on your demise; it’s about taking control and making decisions that ensure that your loved ones are cared for.

Put Not Your Trust in Money, Put Your Money in Trust

February 13, 2025

Everyone needs an estate plan, and when you understand what a trust does, your plan should probably include one, at least conditionally.

What Is a No-Contest Clause, and Do They Work?

February 12, 2025

Between 1% and 3% of wills are contested in the United States each year, research shows.

How to not pick a guardian

February 6, 2025

You need an answer to the critical question of “Who raises your child?”: it’s a paramount parental duty. An imperfect plan would be far better than none at all.

Financial Blunders Planning for Grandchildren

February 4, 2025

Helping grandchildren financially can be rewarding. However, avoiding common mistakes ensures that your generosity doesn’t harm your finances or family relationships.

Maryland’s Proposed Inheritance Tax and Estate Tax Changes

January 27, 2025

While this proposal is still subject to legislative approval, if enacted, it would expand the number of estates subject to Maryland estate tax, potentially increasing the tax burden on families and heirs. If your assets exceed $2 million, now is the time to reassess your estate plan and consider tax-saving strategies.

What is the Right Age to Inherit?

January 16, 2025

The older I get, the older I think someone should be before they are mature enough to handle money. I used to say 25 was the right age. Now it’s 30 to 35.

The Executor’s Duties Checklist

January 14, 2025

Serving as an executor is a significant responsibility that requires careful attention to legal, financial and administrative details to ensure a smooth probate process.

Don’t Fall for Estate Planning Myths!

January 9, 2025

There are some common estate planning myths that you know: Your work isn’t done just because you have a will. There are many myths floating around about wills, trusts, and estate planning. Those myths can easily confuse people who haven’t taken the time to bust them before getting on to the real work … taking care of the family, according to the Cleveland Jewish News in “Estate planning myths common, but debunkable.” One common myth is that a trust is wholly creditor-protected. While some trusts achieve this goal, many don’t. It is easier to provide that to your beneficiaries than to yourself. Another myth is that once an estate plan is completed, there’s no need to revisit or make changes. We look at the planning you put in place as an ongoing rough draft. Perhaps the biggest myth around estate plans is that they are only needed by wealthy people. Everyone needs a will. A property power of attorney can save your loved ones thousands of dollars and massive aggravation. People chat with their friends and neighbors and pick up snippets of often incorrect information. As with any story, once a piece of information has moved through a few different people, it becomes confusing, even if it started accurately. The value of such “Street lawyers” is usually what you pay for it. Unless it comes from an estate planning attorney, don’t get legal advice at a neighborhood or family gathering. The results can be disastrous. If you think having a trust alone is enough to prevent your heirs from having to pay any taxes, your kids will be in for a big and expensive mistake. The court will appoint a guardian if you don’t set up guardianship for your minor children. It may be a person you would never have wanted to raise your children. If a separate financial trustee is not named, there won’t be any checks and balances on how the money left for your children is spent. If you don’t have an estate plan, especially if your family includes minor children, make an appointment to speak with an estate planning attorney who can advise you on an estate plan that fits your unique circumstances. Reference: Cleveland Jewish News (Sep. 20, 2018) “Estate planning myths common, but debunkable”

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