Title: Estate Planning For the Elderly
Course: TAX 6405-Gift, Estate, and Trust Taxation
Table of Contents * Introduction * Power of attorney * Trusts * Wills * Joint ownership of assets * Lifetime gifts * Long term care insurance * Conclusion
You may have heard a phrase like, “70 is the new 50.” There are large numbers of seniors living into their 80s and 90s. Estate taxation and planning has become a bigger concern, especially for baby boomers. There is a wide range of laws regarding the elderly and disabled. The law of the elderly and disabled has become more complex in recent years. Lawyers and financial planners who specialize in elder law assist with matters affecting the autonomy
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It is wise to appoint a successor agent since there is the possibility that the person or organization appointed may not be able to serve or will refuse to serve. Example: An elderly husband names his elderly wife as his agent. After signing the power of attorney document, they are both diagnosed as having Alzheimer's disease. The wife becomes mentally incompetent and cannot serve as her husband's agent. The husband cannot sign a new power of attorney because he is also mentally incompetent. If a successor agent was named, he or she will take over. In order for a power of attorney document to be valid, the person must be mentally competent when the document is signed. A power of attorney must be signed by the "Principal" that is the person granting the authority. The Principal must be mentally competent at the time of the signing in order to make the document legally binding. If there is any question about the Principal's mental competence, a physician may be asked to certify in writing that the person understands the document and the consequences of signing such. The document should be notarized which will make it harder for someone to challenge its validity.
A properly set power of attorney will allow the elderly person to have their wishes carried out, thus minimizing losses to the estate.
A trust is a relationship between three parties where property is transferred by one party (the