Women, may we have your attention?
Women are so busy caring for others, they often forget to take care of themselves. As a result, many women fail to properly plan for the distribution of their assets at death and fail to make their health care decisions in the event of incapacity. They might be unwilling to face the thought of a husband’s illness or death, or they might be intimidated by the planning process. Whatever the reasons, the consequences of not planning will almost always be far worse. Women, take heed.
Married women often assume that if a husband becomes too ill to handle financial matters, such as selling stock or applying for a mortgage, they can simply take over. It isn’t that simple.
If the stock or residence is titled just in the husband’s name, the wife has no legal right to access that asset. With no legal documents in place, she will find herself forced to file a proceeding in the Probate Court to be appointed Conservator of her husband’s assets. The process is expensive, emotionally draining, and an invasion of privacy.
But one can avoid the issue of incapacity in the courts. Each spouse should execute a Durable Financial Power of Attorney naming the other as agent, with authority to administer all assets the other spouse owns. They should both name a successor agent, in case the other spouse might not be able to serve.
A Durable Financial Power of Attorney is equally essential for a single woman. This mechanism allows her to appoint someone she trusts to handle her financial matters if she becomes ill, or is in an accident.
For even greater protection, people often create Revocable Living Trusts and re-title assets into the name of the Trust. The creator of the Trust will usually serve as Trustee, but if he or she becomes incapacitated, a Successor Trustee can step in and continue the management of the Trust assets.
Similar legal roadblocks often occur with health care decisions. Who has authority to speak to the doctor and direct the care of an incapacitated adult?
Everyone should have a Health Care Power of Attorney, naming a health care Agent. Due to privacy concerns, the Health Insurance Portability and Accountability Act of 1996 (HIPAA) makes it difficult to obtain medical information about someone without being authorized under HIPAA.
A wife does not have the legal right to access her husband’s medical records unless he has signed the proper legal document. With no Health Care Power of Attorney, a conflict among family members can force a Probate Court hearing to determine who should be legal Guardian.
A widow with dementia may become a pawn in a power play between children that would have been avoided if, when she had capacity, she designated which child she wished to be her health care Agent, and her Guardian if one were required.
Death and Probate
A wife should not assume that if her husband dies, everything he owns will automatically pass to her. In Georgia, if a married man with children dies without a Will, the law provides that the wife and children each receive an equal share of the husband’s assets, with the wife receiving a minimum one-third share.
If the residence was titled in just the husband’s name, and the two children were from his previous marriage, his elderly widow will suddenly find herself living in a home that is owned two-thirds by her stepchildren. If the relationship is not a good one, she may be pressured into selling the home before she’s ready, so that the children can receive their shares.
With a Will, the husband could bequeath the residence solely to the wife, or give her the legal right to live there for her lifetime. In addition to property that passes by Will, certain assets, such as life insurance, annuities, IRAs and other retirement plans, can be distributed at death by naming a beneficiary. With these kinds of assets, beneficiaries need to be verified.
For example, if a husband remarries, but fails to change the beneficiary of his life insurance from his former wife to his new wife, the insurance proceeds will be paid to his former wife. That may have been life insurance the widow was counting on to provide for her needs in the event of the husband’s death.
Review and Update
Legal documents like powers of attorney, wills, and trusts should be reviewed every few years, or sooner if something occurs to impact the plan, such as marriage or divorce, a large inheritance, or the incapacity of a beneficiary or Executor. Changes in the law, such as the HIPAA privacy law, may also require changes in legal documents.
Peace of Mind
The goal for every woman should be to have the legal documents in place to deal with her own incapacity or death, and if she is married, the incapacity or death of her husband.
By Debra A. Robinson, JD
Robinson & Miller, PC