If you are or are about to be incarcerated, your future is probably a bit uncertain, not just for you, but also for your family and others who may depend on you.
There is a way to ease some of this uncertainty and stress and that’s through proper estate planning. No matter how long your incarceration is, a good estate plan can protect you and your family for years to come. Here are some of the big questions your estate plan should account for.
How do I ensure my bills are still paid while I’m away?
Durable Power of Attorney
Whether you’re facing incarceration or even just going through an extended medical treatment, planning for a long trip, or anything else that takes you away from your home and business, a durable financial power of attorney is a helpful tool. A financial power of attorney allows you to choose a trusted person (an agent) to take care of your financial matters on your behalf. This person has the ability to do a wide range of financial transactions from signing a check to opening a bank account, depending on the particular authorities you give them. Because it is an immediate power of attorney, that person or agent has the authority to act on your behalf as soon as you sign the document.
The great thing about a financial power of attorney is that while the agent may act on your behalf, you still have authority over your own business. You can still control your own finances, but you have an alternative person to act on your behalf as well. By making your financial power of attorney durable, your agent’s authority will continue even if you become incapacitated (unable to communicate or make decisions for yourself).
Revocable Living Trust
A revocable living trust (RLT) may also be a good solution for managing your affairs while you’re away. An RLT is a trust that you create during your lifetime that you can change at any point up to your incapacity or death. An RLT allows you to name yourself as the current trustee (the person charged with managing, investing, and dispersing the money and property) and to name a co-trustee or alternate trustee if for any reason you are unable to act as the trustee. This financial tool also allows you the ability to control your money and property during your lifetime, and to designate what happens to that money and property when you die. This protects your assets, ensuring it is distributed as you see fit.
One very important benefit of an RLT is that any accounts and property owned by the trust will not have to go through the probate process. Probate is the court-supervised process that must take place to distribute accounts and property you own at your death to your loved ones. By avoiding probate, you can keep your private family matters out of court and save your loved ones’ time and money.
RLTs can be especially helpful if you have a minor child, because it can specify when and how the funds can be used for your minor child’s benefit while you are away. The alternate trustee can be given instructions on how to care for your minor child so that they are provided for in the same way you would provide for them if you were there. The same can be done for any other individuals in your family who are dependent on your care.
If you have a minor child, and you pass away without an estate plan in place, the money and property that would go to your child will be managed by a court-appointment individual who is not familiar with your child or your intentions. Additionally, if money and property is due to your child based on state law, when your child reaches the age or 18 (or 21, depending on the state law), the court will give your child the remainder of the money and property in one lump sum. A trust allows you to dole money out over time so there isn’t the possibility of an 18 year old immediately blowing through their entire inheritance or being taken advantage of by someone else.
One thing to keep in mind, though, is that this type of trust does not protect your assets from creditors, which can include fines, costs, restitutions, and other charges associated with your incarceration.
Who will take care of my minor child while I’m incarcerated?
If your minor child’s other legal parent is still alive and able to care for your child, they will assume the primary caregiver responsibilities. Nevertheless, it is a good idea to plan for what will happen if both of you are unable to care for the minor child, just in case. If you are the only living parent or the other legal parent is unfit to care for your child, you will need to make additional arrangements.
While most people are familiar with the idea of naming a guardian for a minor child in a Last Will and Testament, this document does not become effective until your death. Therefore, to properly plan for your minor child’s care during your absence, you must name a guardian in a separate writing that meets state law requirements. This is something that should be discussed with your attorney, as it varies depending on the state in which you live or in which your minor child lives. Without instruction from you, the court will use its discretion in deciding who is best suited to care for or make decisions for your child.
Are there any other estate planning documents I need?
The above-mentioned estate planning documents can provide critical support to you and your family during this time of transition, but to ensure that they are fully protected, there are a few other steps you may want to take.
Medical Durable Power of Attorney
This document allows you to name a trusted decision-maker to communicate your healthcare wishes if you are unable, regardless of where you are. If you do not formally choose a medical decision-maker, your loved ones will face going to court to have someone appointed by a judge to make these medical decisions. This person may not be the one you would have chosen. Additionally, this court process takes additional time and money during an already stressful time.
Living Will or Advanced Healthcare Directive
This document may be known by either of these two names, just depending on the state you’re in and it allows you to communicate your end-of-life wishes. Preparing this document may take some serious consideration, but it’s critical to know what you would want to happen in certain situations and to document those wishes clearly for your chosen medical decision-maker. Not having these instructions leaves your medical decision maker in an agonizing position of having to make choices on your behalf, doing their best to guess what you would have wanted. Not only can this cause additional grief in a difficult situation, but it could also breed disagreements among your loved ones if there is a differing opinion on how to best care for you.
HIPAA Authorization Form
This form allows you to grant specific individuals access to your medical information (e.g., to get a status update on your condition or receive your test results) without giving those individuals the authority to make decisions on your behalf. By at least providing medical information to your loved ones, you can help quiet the anxieties and uncertainties that often arise during times of emergency. This can also help alleviate tensions between your medical decision-maker and the rest of your loved ones. Although only one person will be making medical decisions, the rest of your loved ones will at least understand why those decisions were made.
Last Will and Testament
A Last Will and Testament, also referred to as a will, is a document where you can name a personal representative or executor (the person in charge of collecting all of your accounts and property, paying your outstanding debts, and distributing your money and property to those you have named), specify who will receive your accounts and property, and name a guardian for your minor child, if necessary. Although this document is only useful at your death, it provides a way for you to officially express your wishes. If you fail to have a will, the probate court will determine who gets your money and property according to state law.
Davis Law Group Can Help
This is a difficult time for you and your family, but trusted legal counsel can help make the transition a little easier. If you have any questions or would like to discuss how we may be able to help, please contact us today. We are available for in-person and virtual consultations, whichever is most convenient for you.