Planning for Aging in Pennsylvania

Planning for the unexpected as you age doesn’t have to be complicated or stressful. Discover the essential legal tools that protect your wishes, your assets, and your loved ones—before you need them.

Transcript

Hello folks. It's Peter Klenk, Klenk Law, and we're here to talk about death and taxes. Right—everybody's inevitable favorite subject. And today, we're gonna talk about getting old.

Another subject that everybody wants to talk about, right? But again, inevitable. I move slower than I used to. I get out of the chair a little bit slower than I used to. It's the way things are, and we might as well plan for it. The better you plan for it, the easier and less stressful it will be.

Now, on my side is a trust and estates attorney. What we're talking about is planning around the potential of you needing some assistance. Right? Making sure that if something happens in the future, things are set up so that your wishes are respected and that the people you trust and can rely on have the authority—without a bunch of conflict, mess, and expense—to step in and help you.

So, there are some really basic things, and then there are some a little more complicated. But let me kind of generally go over them. Then we can always talk in more detail if you're curious—you can just give us a call.

So, what do you need? Well, look, no matter what age you are, but of course, we all know that as you get older, it’s more likely that you might not be able to write checks, take care of your money, or manage your house because of a medical issue, physical issue, or accident.

If you haven't done any planning and someday you can't take your checkbook or manage the house, everybody's stuck having to go to court petitioning a judge to have you declared incapacitated, and then having the judge select somebody to be in charge of your assets.

The judge picks. The family can nominate, but in the end, the judge picks—it could be a bank, could be an attorney, or depending, could be some family member you like or don't like. But the judge is the person who decides.

This is an expensive, time-consuming process. You can imagine it can cause conflict within your family, and it can all be avoided if you just do a durable general power of attorney.

Right? What is that? Durable means that it’s a document that continues even if you're incapacitated. Power of attorney means you're granting somebody—we call the agent—the power to act for you. They’re essentially your attorney, but what it really boils down to is you're granting the power to somebody to just be you as far as your signature goes.

This person has a duty to look out for you. They can't legally take your money and do whatever they want with it. They're supposed to use this power as your fiduciary—that is, looking out for you to make sure your assets, house, cash, stocks, 401(k), life insurance, health insurance, IRS matters, whatever issues come up—they act for you to make sure that you're okay.

They don't have to do everything. It could be that you're just not up to dealing with the showroom anymore, and you need somebody to go take care of it. Well, there you go. You can give a specific power of attorney that just says, “I give my son the right to manage all affairs over this property,” right? Not over anything else.

The general power of attorney is very broad and basically says anything—anything that you could do.

These documents used to be what are called "springing" powers of attorney, meaning they said something like, “If two doctors someday say I can’t take care of myself, then the person has the power.”

You can imagine that led to a lot of litigation. It led to doctors being dragged in to testify about things they did—and they're not getting paid for that time. So they decided they weren't really too excited about signing off on those letters at all.

Sometimes doctors won't, just because they don't want to ruin the relationship with you in your weakened state. And if they're starting to write letters saying you're incompetent, you might be angry.

So there are all sorts of problems with that process. What most states really want you to do now is to sign a document that says, “Hey, from this second forward, this person has the right to sign my name,” again to take care of me, but from this second forward. That makes their life easy.

The bank is really happy because they don't have to worry about you not being competent, and then getting sued for this person taking over your account. Because you said, unless they receive word that you've revoked this, this person has the power. And that's their "get out of jail free" card.

So they let the person handle your affairs with much less hassle.

Now, of course, that means you have to really trust this person. Can people steal from you? Well, yeah, of course, people can steal from you.

If you give the wrong person this power, can they write themselves checks? Well, yeah. Again, they could go to jail, but they can do it—and the bank’s not responsible because you gave them that power to write checks.

They're not supposed to ask questions. It's supposed to be easy for them. So you have to pick the right person.

But even if you pick the right person—or if you pick your spouse—most people say, “Look, I feel weird that until I am incompetent, this person has this document.”

So what we do is have a process. We have a letter for you to sign that says, “Peter, I’m instructing here’s my attorney to release this document if my agent requests it, but only if they can prove to you that I’m incompetent.”

And that means that if they call me up—your spouse, your kid, your brother, whoever—and say, “Hey, I need that document,” my job is to say, “Well, why aren’t you on the phone? Where are you?”

And it really is surprisingly easy to figure out if you’re competent or not. But that way, they only get it then, and off they go, and they take care of you.

So there are ways to get around that, but the document itself is pretty essential, guys. And since we’re talking, it probably means if you have kids, they might be a little older. Remember, they need one too.

A lot of people think, “Oh, if I get hurt, my mom will step in and help me out,” but legally you don’t have any right to handle your kid’s stuff at all. So they need one too.

Or think about your siblings. They might think the same thing. “If I get sick someday, my sister will step in.” Well, yeah—but only if you have the legal right to. And it can be a real expensive hassle if they haven’t done their chores. So you need to do it.

Think about people in your life. They all should be getting this done. It’s not that hard to get done, so they really should do it.

The other part is your medical side. There are two documents people usually think of: one’s called the Living Will or Final Directive, which says, “Hey doc, here are my thoughts about pulling my plug,” and then there’s the medical power of attorney, where you actually give somebody power to handle your medical affairs.

In Pennsylvania, we merged those two together. So we have one document that says, “Hey, this is the person I give authority to, so if the doctor has decided I can’t make decisions, this person can—for surgery or treatment or making me DNR.”

And by the way, the doctor hears my living will and my thoughts about having my plug pulled. It all kind of belongs together. Anyway, it’s the same document. This is an important one.

HIPAA is out there. Your medical privacy is an important right, and doctors can get in trouble sharing your data. You might think, “Oh, my spouse can get this data or my kid or something,” but doctors stick their necks out every time they share your data without legal documentation.

So make it easy—pick the person and have them ready.

Well, guys, you gotta pick the right person. Don’t just pick your spouse because if you say, “Well, if I’m brain dead, I want to be taken off the machines,” but your spouse says, “I could never do that,” then they’re not the right person for the job.

You gotta ask somebody who can carry out your wishes, and again, somebody who respects your wishes. There are a lot of people out there who will be happy to do what they think is good for you, but you’re really looking for somebody who’s going to do what you want—even if they don’t like it.

They’re supposed to take care of you in the way you would be taken care of. And not everybody can do that.

That takes care of somebody in charge of your money, somebody to handle your medical affairs, but then there’s your specific situation. Like, do you have a business? Do you have a rental property?

One person might be great as an agent to take your general things for you, but maybe they’re terrible tenants or they don’t want to be a landlord.

Maybe they don’t want to do that part. So maybe there should be somebody for different tasks or a team of people.

You have to kind of think that through. And then make sure these people know what you want too.

I mean, if someday they’re in the hospital and the doctor says, “I think it’s time to quit,” and you never talked to them about your thoughts with end-of-life decisions, you put them in a very difficult position. So it’s good for you to share this data.

And then it can be, you know what, guys, just as another little branch—but it could be you call me out and say, “Man, I’m just getting old. I’m doing okay. They want my kids in my business, but I get it—someday stuff could happen.”

Another tool is a revocable trust, a revocable living trust—not just for the classic reason of avoiding probate (and you can see that all over my website—we talk about that tool to avoid probate)—but also just a tool to make sure your kids can step in and help you out.

Why? Well, what can you do? In general, I’m just gonna go over it quickly. You transfer your assets into a revocable trust, but you’re still the trustee and the beneficiary. So even though the trust owns them, you still control and enjoy them. You haven’t given up anything.

But that process while you’re alive can also be helpful because you can make somebody you trust—like your kids—co-trustees.

Now, they connect independently. They act independently. So you don’t need them right away, but someday when you slow down—maybe you’re just not up to writing checks for a month or negotiating insurance for the house for a while—they’re already co-trustees.

They don’t have to somehow show that you’ve become incompetent. They’re already there. They can make that call whether, you know, maybe you don’t even want to really know about it. They’re just doing some stuff behind you, taking pressure off of you so you don’t have to worry about it.

You can see where that can be a valuable tool, especially when you’re sick and tired and struggling with other things. It’s good to have people you trust be able to step in and just make your life easier. And that’s one of the ways that can happen.

So anyway, those are some ideas—just some basic things that fit pretty much everybody.

I mean, that’s pretty low-hanging fruit: the power of attorney and living will—everybody should have those. A hundred percent of everybody should have that.

The revocable trust—you can see where it’s a pretty valuable tool for pretty much everybody too. But you might have some more specific situations that we should talk about, and we can craft around those. That’s what we do. It’s what we do.

So if you’d like to talk more, give us a call: 215-790-1095. It’s our general number for all our offices. That way, we can set up a time for the person you want to speak to.

And happy to do that.

And please like and subscribe so that as I send out more of these over time, we can continue to talk.

So have a great day. Hope you enjoyed my little presentation here, and I’ll talk to you again soon.