Shafae Law

Shafae Law

Shafae Law is a boutique law firm providing comprehensive estate planning, trust, estate, probate, and trust administration services located in the San Francisco Bay Area.

Filtering by Tag: incapacity

What is... a Power of Attorney?

This is part of an on-going series of blog posts titled the "What Is..." series, where we attempt to explain, in simple terms, common estate planning terms and concepts. To read other posts in this series, click here.

At its core, a power of attorney is the legal authority to act for another person. It allows someone to “step into the shoes” of another person.

There are generally two types of powers of attorney relevant to estate planning: medical and financial. A financial power of attorney is sometimes called “durable power of attorney for financial management,” or just “durable power of attorney.” The medical power of attorney is sometimes called the “advance healthcare directive”, “healthcare directive”, or “living will”.

A power of attorney gives someone the power to make decisions on your behalf when you either can’t do so yourself or don’t want to do so. This may arise when you are incapacitated or elderly; it may also arise if you are out of the country and need someone to call your bank for you, or sign a check for a contractor, or something similar.

The key is to ensure that you have given someone the power of attorney in advance of when you need them to act. Once you are deemed incapacitated, it’s too late to sign a power of attorney. Without the necessary powers of attorney in place, someone will need to go to court to obtain the legal authority to act on your behalf in a time of crisis. Going to court always involves time, expense, and the public nature of court can sometimes be humiliating for the person incapacitated.

So when should you have a power of attorney? Now.

Contact us for a free consultation.

Why Would A Married Couple Need an Estate Plan?

A friend of ours recently contacted us with a question that comes up frequently enough that we wanted to share it with you:

We are married and everything that we own is held jointly/as community property. We own a house, but we don’t have any kids and we don’t have debt. Do we need a will? Do we need a trust? Why?”

To the first question: Yes. You need a will whether you have a trust or not. (Click here to read our post explaining what a will does. And click here to read about intestacy.)

To the second question: Yes. Because….

  1. Incapacity. Incapacity doesn’t just mean “coma,” (although that counts too). It could be that you went into surgery and had a bad reaction to the anesthesia so you can’t quite function as you ordinarily would. Or, it could be dementia. It could be temporary, it could be permanent. But a will doesn’t let you address incapacity situations. A trust allows you to plan for incapacity. It allows you to plan for who will take care of your assets and use your assets for your benefit when you are still living. Just because your spouse is on title doesn’t mean your spouse has all the necessary authority to care for you in the event of your incapacity. (Click here to read our previous post explaining incapacity.)

  2. Contingency planning. Wills do not address all contingencies. But trusts allow for lapses and contingency planning. What if your spouse becomes incapacitated after you do? What if your intended beneficiary is still a minor (younger than 18 years old)? What if your intended beneficiary has a substance abuse or gambling issue later on? What if your intended beneficiary has special needs and requires means-tested government assistance? What if your beneficiary predeceases you? These issues can be planned for in a trust in advance.

  3. Probate. You’ve probably heard the term “probate” with some negative connotation. (Click here to read our previous post explaining probate.) If you have a trust, you avoid probate. Probate takes about 18-24 months; it’s a public proceeding; and it’s expensive.

So even if you are married and hold everything jointly, that may only ensure that your spouse receives your assets upon your death. But so many other scenarios can occur. We might recommend you consider a trust given your situation and desires. All of our recommendations depend on your specific family and estate planning goals. To ascertain what is best for you we would need to meet with you, in a free consultation, to understand your goals, assess and explain your options, and provide you with a recommendation tailored to your situation. Call or email us today.

Everyone Needs an Estate Plan (Example 4)

Estate planning is much more than just death planning and giving away your stuff after you die. It’s also about planning for circumstances that you may not have anticipated. 

This post is the third installment in our "Everyone Needs and Estate Plan" series. If you missed Examples 2 & 3, click here to read it.

Example 4: You’re young (but over 18), single, and healthy. You decide that since you don’t have kids, and you haven’t made your first million--yet--that you don’t need an estate plan. On your way to work, someone is texting while driving, doesn't see you, and rams right into you. You're severely injured, and the paramedics are called to the scene. You’re taken to the hospital, and you lay there incapacitated. You're still alive, but you lack the ability to make your own decisions or to handle your own affairs. We’re essentially in Example 1, except that you don’t have a spouse here. Your parents and siblings fly in from out of town, and they want to be involved with your care, they want to alert your boss as to what happened, and they also want to sue the negligent driver who caused your injuries. Unfortunately, all they are given is the bad news that they have to go to court to obtain the appropriate legal authority to handle any of your affairs on your behalf.

You're an adult. No one can make decisions for you... except you. Even though your relatives are here--your parents, at that--and they likely have your best interests in mind, no one has the legal authority to handle your affairs for you absent your permission (power of attorney) or court order (conservatorship).

Hyperbole aside, estate planning is about crisis planning before there is a crisis. Once a crisis occurs--be it a bad reaction to medication, or plain bad luck--it’s often too late to have the proper tools in place to face that crisis head-on. In all likelihood you’ll need to spend a great deal of time and money acquiring the right tools to deal with the crisis. It means more stress on top of an already stressful situation for your loved ones.

As you can see, estate planning has little to do with your net worth or your age. It is important for everyone at any age. If you’re over 18 years of age, you absolutely need an estate plan. If you have a family, especially minor children, that need for an estate plan merely increases. To determine what kind of estate plan you and your family needs, please contact us for a free initial consultation.


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