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Alliance Financial Care

It Matters: Incapacity Can Strike Anyone at Any Time…Are You Prepared? 

Posted by Rob Pease on July 28, 2017

 

I still remember getting the call back in 1981 at Ivory Coast Academy in Bouaké, Côte d’Ivoire, that my mom was involved in a near-death car accident. God spared her life and has used her mightily, but she never imagined being confined to a wheelchair for the next 36 years. Even with today's medical miracles, it is a real possibility that you, your spouse, or a loved one could experience difficulty with handling your own medical or financial affairs and need help. A serious illness or accident can happen suddenly at any age. Advancing age can also bring ailments that affect your ability to make decisions about your health, to pay your bills, to write checks, to make deposits, to sell assets, or to otherwise conduct your affairs. In recent months, my siblings and I have revisited this area with my mom as she turned 88 this year and we continue to serve in this capacity.

Managing medical decisions with a living will, durable power of attorney for health care, or Do Not Resuscitate order

If you do not authorize someone to make medical decisions for you, medical care providers must prolong your life using artificial means, if necessary. With today's modern technology, physicians can sustain you for days and weeks (if not months or even years). If you wish to avoid this, you must have an advance medical directive. 

A living will allows you to approve or decline certain types of medical care, even if you will die as a result of the choice. However, in most states, living wills take effect only under certain circumstances, such as terminal injury or illness. Generally, one can be used only to decline medical treatment that "serves only to postpone the moment of death." Even in states that do not allow living wills, you might want to have one regardless to serve as evidence of your wishes.           

A durable power of attorney for health care (known as a health-care proxy in some states) allows you to appoint a representative to make medical decisions for you. You decide how much power your representative will have.                     

A Do Not Resuscitate order (DNR) is a doctor's order that tells all other medical personnel not to perform CPR if you go into cardiac arrest. There are two types of DNRs. One is effective only while you are hospitalized, while the other is used while you are outside the hospital.

Managing your property with a living trust, durable power of attorney, or joint ownership                

Consider putting in place at least one of the following options to help protect your property in the event you become incapacitated.

You can transfer ownership of your property to a revocable living trust. You name yourself as trustee and retain complete control over your affairs as long as you retain capacity. If you become incapacitated, your successor trustee (the person you named to manage the trust if you can't) automatically steps in and takes over the management of your property. A living trust can survive your death, but it can be expensive to maintain and administer.

A durable power of attorney (DPOA) allows you to authorize someone else to act on your behalf. There are two types of DPOAs: an immediate DPOA, which is effective immediately, and a springing DPOA, which is not effective until you have become incapacitated. A DPOA should be fairly simple and inexpensive to implement. It also ends at your death. A springing DPOA is not permitted in some states, so you will want to check with an attorney.          

Another option is to hold your property in concert with others. This arrangement may allow someone else to have immediate access to the property and to use it to meet your needs. Joint ownership is simple and inexpensive to implement. However, there are some disadvantages to the joint ownership arrangement. Some examples include (1) your co-owner has immediate access to your property, (2) you lack the ability to direct the co-owner to use the property for your benefit, (3) naming someone who is not your spouse as co-owner may trigger gift tax consequences, and (4) if you die before the other joint owner(s), your property interests will pass to the other owner(s) without regard to your own intentions, which may be different than theirs.

Hopefully these and other trusted resources prompt family conversations along with prayerful discernment and align with your Kingdom values. Joseph Padilla with the Orchard Foundation also addresses real estate in this edition of Alliance Financial Care.

Do You Own Real Estate Other Than Your Home?

By Joseph Padilla, The Orchard Foundation

Do you own an apartment complex, commercial building, farm, vacant land, or other real estate? Most people don't realize that passing these kinds of real estate down through the generations can become problematic. This is true because each generation typically multiplies the number of owners, who each bring their own specific personalities and belief systems. It then becomes difficult for the owners to come to a consensus on issues related to the property. This can create hard feelings between family members and can sometimes end up rendering the property useless.  

Because of this, people should carefully think and pray about whether or not to bequeath real estate to their children, especially if the children will own the property jointly. Giving real estate to their church and/or other ministries prior to death may be a better plan of stewardship. This not only protects family from fighting with each other, but it also creates an opportunity to use possessions for immediate Kingdom impact.

Bestowing real estate to benefit the Lord's work goes back to apostolic times (Acts 4:36-37). In today's world, it can be a great plan of stewardship because you can obtain a double tax benefit by avoiding capital gains tax and receiving a charitable deduction. For more information about making a gift of real estate or other non-cash gift, please contact me at padillaj@theorchard.org or 719-268-7214.

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