Real World Estate Planning for All Lawyers

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No, not every lawyer needs to practice estate planning. No, you do not need to recall everything you have now forgotten from that estate and gift tax course you took in law school. What I am suggesting is that if you represent individuals, you need know how your client’s lack of proper estate planning may derail your work on their legal matter – be it a contract dispute, divorce, personal injury or wrongful death case or other matter, and what to do about it.

Financial Power of Attorney: What is it and what problems can arise in legal representation without one?

With a financial power of attorney, one person (known as the principal) appoints another, (known as the attorney in fact or agent) to handle financial, legal and business- related matters either immediately or upon subsequent disability of the principal. If there is no valid financial power of attorney in effect and the client loses capacity (in other words, the client is still “with us,” but no longer “with it”) the law provides no default surrogate financial agent. A conservatorship may be required to not only manage that individual’s assets, but also retain counsel and settle legal disputes and lawsuits.

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Where do we see these problems arise in the real world? If you practice personal injury law and your plaintiff client is initially competent but later takes a downturn due to the injuries sustained and lacks capacity to continue to direct the representation, understand settlement terms or manage the net settlement proceeds you and the case may be in limbo until the court appoints a conservator. Similarly, if the prospective plaintiff is not competent to start with and has no valid financial power of attorney in effect, a conservator may need to be appointed to hire you in the first place. By way of example, my office unfortunately receives calls every year where the person calling states they need “power of attorney” because a parent is in a coma in the hospital. Well, if mom cannot grant power of attorney herself it is too late. What if you are handling a contract, homeowner’s association, or modification of alimony dispute and your client suffers a debilitating stroke and there is no valid power of attorney? What if you practice criminal defense and your client will be incarcerated for some time, who will manage his financial matters while he in practically unable to do so?

Health Care Power of Attorney: What is it and what problems can arise in legal representation without one?

With a health care power of attorney an individual (known as the principal) designates another person to make future health care decisions for the principal if he/she ever cannot themselves due to illness or injury. If there is no valid health care power of attorney, the surrogate decision maker under A.R.S. §14-3231 may act. So, where do we see problems arise in the real world?

What if you practice family law and one of the parties to a dissolution of marriage proceeding lacks capacity to meaningfully participate and protect their interests? After all, the divorce rate among older persons is rising. A legal guardian will need to be appointed to stand in for that party. If there is a health care power of attorney that designates the agent as guardian should the need arise it may reduce conflict among the parties to the guardianship proceeding itself.

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Last Will and Testament: What problems can arise in legal representation without one?

What complications in representation can arise without a will? If you handle personal injury and wrongful death cases, plenty. For example, if a personal representative must be appointed to pursue a wrongful death case, having a will can avoid unnecessary family disputes and court delays regarding who should be appointed. If you practice family law and your client dies before the dissolution of the marriage is final, the soon-to-be former spouse will still inherit whether by will or intestate law. As such, it is very important that your client updates their estate plan and not wait until the dissolution is final to avoid unintended consequences.

While these documents may seem simple, without them, the effectiveness of your representation can become complicated. You may want to keep these tools in mind, make sure your clients have them in place (most people do not), and refer clients to experienced estate planning counsel if they do not. If you have a case, or prospective case, in which it is too late and the client lacks legal capacity to execute these documents, you may wish to consult with an elder law attorney regarding options, including guardianship and/or conservatorship. In particular, the worlds of estate planning, elder law, personal injury, and family law often intersect. Stephanie A. Bivens

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