Couples without children have two main tasks when it comes to estate planning: the first is determining how to distribute the assets in the estate. The second, and arguably trickier task, is to assign a person or people who will handle your medical and financial affairs in the unfortunate event that you become incapacitated.
Durable Power of Attorney and Healthcare Proxy
A durable power of attorney form names a person to handle all of your financial matters if you become incapacitated or otherwise unable to take care of your own finances. This includes some legal matters, as well. A healthcare proxy is similar to a durable power of attorney, but this person is responsible for all medical decisions if you are incapable of making those decisions for yourself.
Naming the Proper Proxies
Couples with children typically name one of them as the durable power of attorney and healthcare proxy; however, oftentimes people without children struggle to find someone that they can trust. Spouses can appoint each other to these positions, but almost every estate planning attorney recommends having a “Plan B.” This usually entails naming another, younger person to serve simultaneously or in succession to these positions in case the spouse also becomes incapacitated or passes away.
Horror stories abound of childless couples that only named each other as proxies and then had something happen to them both. Their loved ones or extended family members then had to go to court in order to have a successor appointed, a process that takes time and thousands of dollars in court fees.
In some states, there are professional fiduciaries that can be hired as professional powers of attorney or as a healthcare proxy. Some geriatric care managers will also agree to serve in proxy positions, as well. Other possible candidates for childless couples include nieces, nephews, friends, trusted neighbors, clergy, siblings, or cousins.
When naming a durable power of attorney or healthcare proxy, it is important to do more than sign the forms. Be sure to sit down with the person or people that you appoint and go over what your wishes are for your legal, financial, and medical future.
For the healthcare proxy in particular, consider drafting a living will. This estate planning document lists your wishes regarding any and all medical care should you become incapacitated. This includes certain medications, procedures, resuscitation, and the like that you do or do not wish to have done to you in a medical emergency. Your healthcare proxy is bound to your wishes in the living will, and it can ensure that your medical wishes are carried out.
In addition, consider paying or bequeathing assets to your proxies as payment for services rendered. This lets them know not only that you appreciate the service that they are providing, but it also prevents your proxies from feeling resentful. It can also prevent your proxies from helping themselves to your assets or money while you are incapacitated.