Guide to Protect Your Assets as You Age – Power of Attorneys
Retirement Daily Guest Contributor
By Patrick Simasko and Luke Stempien
This is the first in a series of articles on elder law and protecting assets as you age.
The premise of this series of articles is to dig into the various ways to protect your assets. So many people focus on only protecting their estate from probate, but in the big picture, probate is the least of their worries.
The topics explored throughout these articles include elder law, powers of attorney, probate avoidance, wills, beneficiary designations, tax planning, Medicaid pre-planning and crisis planning, as well as veteran’s benefits.
What is elder law?
To be an elder law attorney is to help protect individuals as they grow older and then protect their beneficiaries upon their death. We like to relate our specialty to the medical profession.
Let’s say you have gone to your family doctor for the last 30 years. You know everyone’s name in the office. You know their hours and phone number by heart. You probably even bring them cookies at Christmas. But now you have been diagnosed with cancer so you are heading to the cancer specialist. Why? Because your family doctor isn’t a specialist and they might miss something. Elder law attorneys are the cancer specialists of the legal profession. It’s our job to take a fresh look at your situation and to come up with strategies to protect you and your family from the numerous risks you will be faced with as you grow older.
An elder law attorney is a protector
Elder law attorneys show you how to protect yourself and your family. You choose to work with an elder law attorney and we make sure your estate goes to your family first, leaving the government, creditors, probate, and the IRS with only the bare minimum crumbs they are entitled to.
Sadly, many lawyers look at themselves as being elder law attorneys when they act more like document drafters. They are still excellent attorneys and will do a fine job, but an actual elder law attorney is so much more. At Simasko Law, Patrick is also known as a Wealth Preservation Specialist. His role is to apply his legal experience to protect one’s estate from a legal point, while at the same time applying his financial advisor background to protect one’s estate on a financial basis. As such, these articles will address the legal documents that a family needs and then will supplement that with the elder law and financial experience you need.
What’s the sharpest tool?
Estate planning documents are the tools in your toolbox. They are the hammers, screwdrivers and wrenches. Every tool is essential when you need it.
So, what’s the most crucial tool in the legal toolbox? In our opinion, it’s the Power of Attorney (POA), and there are two of them - a medical POA and a financial POA. POAs let you choose someone to make your medical and financial decisions when you can’t. But they are not the same thing.
For example, if Dad has dementia, can Mom make his medical decisions? Nope, not unless dad appointed her as his patient advocate. Also, Mom is on the checking account with him and she is on the IRA, right? Well, not really, she is just a beneficiary of the IRA. Oh, well can she withdraw money from the IRA to help pay the bills? Unfortunately, no, unless Dad appointed her as his attorney-in-fact under the correctly drafted financial POA. These two documents are critical because they affect you while you are still alive. You need them drafted before you are not mentally capable of signing them.
Unfortunately, the COVID-19 pandemic has left us in a nightmare scenario of hospitalized patients without the proper tools. All hospitals, nursing homes and even assisted living homes have locked everyone out to help minimize the spread of this horrible disease, meaning many can’t get these documents signed. Many states initially prevented electronic signatures and notarization that would keep contact to a minimum, but still allowed patients access to an elder law attorney when needed. Thankfully, however, most states have signed executive orders allowing for electronic signatures, which has been a huge help. However, it can be difficult for an elder individual.
Financial POAs are not all the same either. They are just a tool in the toolbox. Why do you need the package of 16 screwdrivers? Because they are different sizes and shapes. Same with the POA. A POA has a laundry list of things you are allowing your agent to do for you. Many of these documents don’t give your agent enough power to protect you. They limit your loved one’s abilities, which sounds good when you first sign them, but then it makes our jobs much harder if you have a stroke and your loved one needs help to protect your lifesavings from the devastating cost of nursing home care.
About the authors: Patrick Simasko and Luke Stempien
For more than 20 years, Patrick Simasko has dedicated his legal career to the practice of elder law. As a partner with Simasko Law in Mt. Clemens, Mich., he helps families plan for their future, protect their assets and receive the financial and medical benefits available to them. Patrick also conducts seminars and workshops across the country to educate communities about elder law, financial planning and Medicaid, as well as VA Benefit Aid and Attendance.
Luke Stempien is a current law student at WMU-Cooley Law School. He currently works at Simasko Law Office in Mt. Clemens, Mich., where he hones his estate planning skills and has developed a great understanding of all probate matters. He hopes to continue his career in this field of elder law to better serve those he feels could use his help the most.