This column first appeared in the San Antonio Express-News and its MySA.com website on May 12, 2015.
Dear Mr. Premack: My father is doing fairly well, but my mother is slipping more deeply into memory loss and dementia. They do not have a huge estate but are financially stable. A few years ago my brother helped them go online to make Wills and Powers of Attorney with LegalZoom. Now, I am bothered that mother’s Power of Attorney lists only my father as Agent (and his list only her). They did not list any backups. What if he becomes ill like her, or if he dies first? How can my brother and I help with her bills and be sure that she is cared for if neither of us is on her Power of Attorney? Frankly, she couldn’t understand or sign a new one because of her condition. Any suggestions? – C.R.
You have focused on a big problem that needs to be solved now; if left unsolved the situation will be much more difficult and expensive to address in the future. Your mother is incapacitated by her illness, and cannot manage her own financial affairs or provide for herself. Your father is her agent, but there are no backups. If something happens to your father, the family will face large legal hurdles when trying to take care of her.
Using LegalZoom to create their legal documents was an error. LegalZoom is not a law firm and does not provide legal advice. It is simply a computerized service over the net to prepare forms based on input received from a user. Your parents needed legal guidance from an expert. The bit of money they saved using LegalZoom will be spent many times over trying to fix this situation.
Your father should now consult with a qualified Certified Elder Law Attorney. The attorney needs to thoroughly analyze the existing Powers of Attorney. Are they Durable? Were the signed properly? What actions is the Agent authorized to take?
Even if your father’s Power of Attorney meets all the baseline legal standards, he should immediately make a new, updated Durable Power of Attorney which removes your mother as his Agent. He should appoint a new agent and several successor agents who may act in case the first Agent dies or is disabled.
If your mother was to die first, which is not predictable, then fixing your father’s Power of Attorney might be enough. However, should he die or become disabled, your mother has not appointed any successor Agents. She will be left without a legal caretaker. Hence, an additional step is needed to protect your mother.
That step is to establish a Living Trust. Your father can act as the sole Grantor (creator) of the Trust. He can also be the initial Trustee (manager) but should include several successor Trustees in case he becomes disabled or dies. The Trust could state that both he and your mother are beneficiaries for life. If he dies first, a successor Trustee would have legal authority to manage all of the Trust’s assets, using them for your mother’s care and support.
In order to move their assets into the Trust, your mother’s Power of Attorney must contain proper legal authority. It must state that your father (as her Agent) has power to make gifts from her assets, or has power to move her assets into a Trust for her benefit. If those powers were not included by LegalZoom – those powers are not standard statutory powers that would typically be included without advice from a qualified attorney – then your father may be unable to fully fund the Living Trust.
In that case, he may have to go to court. He could petition the court to become her Guardian, then petition the court for authority to establish a trust for her benefit. Those legal actions would be slow and expensive, and could have been entirely avoided had they worked with a qualified attorney instead of being ill served by LegalZoom.
Paul Premack is a Certified Elder Law Attorney with offices in San Antonio and Seattle, handling Wills and Trusts, Probate, and Business Entity issues. View past legal columns or submit free questions on legal issues via www.TexasEstateandProbate.com or www.Premack.com.