An important part of estate and elder law planning is planning for incapacity. Planning for incapacity is often overlooked as estate planning is typically focused on distributing assets after death. Increasing life expectancies will continue to drive the need to plan for incapacity. For example, one in nine people age 65 will be diagnosed with Alzheimer’s disease. The odds increase to one in three for those age 85 and older. Stroke is another common cause of mental incapacity. Properly planning for incapacity will keep most, if not all, of your planning options open. In addition, planning ahead for the possibility of mental incapacity can help avoid the necessity for an interdiction.
Powers of attorney are a key component of planning for incapacity that allow for the administration and management of your assets and/or making medical decisions on your behalf. A power of attorney can help keep all of the planning options open by enabling another person to make financial and medical decisions for you if you become incapacitated. In Louisiana, a power of attorney is sometimes referred to as a procuration or a mandate.A procuration is a unilateral juridical act by which a person, the principal, confers authority on another person, the representative, to represent the principal in legal relations. La. Civ. Code Art. 2986.A mandate is a contract by which a person, the principal, confers authority on another person, the mandatary, to transact one or more affairs for the principal. La. Civ. Code Art. 2989.
To maintain planning flexibility, consider providing your agent with authority to handle future unknown planning needs. In particular if you or your spouse attempt to qualify for Medicaid or VA Pension benefits, will your agent have the authority to take the necessary planning steps? The power to donate assets and create promissory notes must be specifically granted in the power of attorney document. In addition if your agent is or may be a donee of transfers from the principal or named as a beneficiary of the principal’s life insurance, annuities or retirement accounts, the power of attorney should specifically allow your agent to engage in self-dealing.The benefits of allowing self-dealing should be considered if one or more of your children are your agent(s). These powers are critical to maintain flexibility for Medicaid long-term care planning in Louisiana.
If you have questions about self-dealing and gifting authority with powers of attorney in Louisiana, contact Houma elder law attorney, John Sirois. Contact John by phone (985) 580-2520 or by email at firstname.lastname@example.org. Visit John’s website www.LouisianaEstatePlanner.com for more information. To order a copy of John’s book, Louisiana Retirement and Estate Planning, click here.