Estate planning
Mike Prsa, a lawyer from Lawrence, Lawrence, Stevenson, spoke last week on the topic of estate planning. He provided some helpful instruction as to what and what not to do regarding powers of attorney and joint ownership.
A power of attorney designates an individual to look after one's assets when one becomes incapacitated. The power of attorney is not to dispose of property for less than fair market value. As a power of attorney one should proceed with caution when signing contracts on behalf of the individual. A contract with a Nursing home was used as an example. The signing of a contract with a Nursing Home could result in the Power of Attorney being held personally responsible for expenses that pertain to the individuals care. The power of attorney can be held accountable by a public trustee or through a lawsuit by a sibling.
Joint ownership takes place when an elderly parent, who is capable, places their assets into joint names with another individual, such as a child. This is often done in order to avoid probate fees.
The pitfall with this is that there may be tax implications in which the primary residence can be impacted. Co-ownership of assets could result in a child's creditors seeking to obtain joint assets. One looses control over their assets.