Planning ahead is the foundation of elder law. Elder law can cover a broad range of topics from financial planning to the execution of powers of attorney. Having an understanding of the various areas of elder law and how they can help preserve and convey your estate is important. If you or a family member need help with the planning of an estate, you should speak with an experienced Chester County elder law attorney.
At Herr Potts and Potts, our attorneys are prepared to help you find unique solutions to all your estate planning problems. Our team of legal professionals have served clients in southeast Pennsylvania for over 80 years and would be proud to represent you. To schedule a confidential consultation, call us at (610) 254-0114 or reach us online, using our short submission form.
Powers of Attorney
A durable power of attorney is a legal document that authorizes an individual, also known as an “agent,” to manage the specified affairs of the individual who executes a power of attorney, also known as the “principal.” A power of attorney is described as durable because it survives even if the principal becomes incapacitated and loses the legal capacity to handle certain types of legal transactions like conveying property. A power of attorney will automatically be considered durable unless otherwise stated.
Generally, there are two types of power of attorney (POA). A general POA has a very broad scope and authorizes an agent to handle several different legal affairs of the principal. A limited power of attorney only gives an agent the power to specific duties.
Outside of the general and limited POAs, there also exists special powers of attorney. For example, a healthcare POA allows an agent to make decisions regarding your medical appointments and overall healthcare. A healthcare POA is typically necessary when a principal does not have the legal capacity to make sound decisions regarding their healthcare. An agent authorized under a healthcare POA has the ability to:
- Admit a principal to an assisted living facility
- Schedule medical appointments with physicians or specialists
- Authorize surgical procedures on behalf of the principal
A special POA can also be utilized to authorize an agent to act on your behalf regarding financial affairs. A guardianship is similar to a POA agreement because a guardian can be authorized to complete the same duties as an agent in a POA. However, a guardian is appointed by a court when a person has become legally incapacitated, whereas an agent in a POA is deliberately given the power to handle affairs by a principal.
A power of attorney should occasionally be reviewed by an attorney to remain in conformity with new laws and to ensure your agent possesses the authorization necessary to complete his or her duties.
Lifetime Gift Planning
Transferring property to family members and other loved ones and maximizing tax exemptions is another valuable aspect of elder law. To understand the meaning of a lifetime gift, one must first understand how a gift works. A gift is property, cash, or other assets that are given to another person or organization in exchange for nothing or an item or service that is worth less than the fair market value of the gift. A lifetime gift is then described as property, cash, or assets that are transferred to another person or beneficiary while the gift-giver (grantor) is still alive.
A majority of gifts are not subject to taxation. For example, if you gift your spouse a new watch (or any other gift), it will not be taxed. There are other examples of untaxable gifts, such as:
- Gifts to charitable organizations
- Gifts to a political organization
- Tuition or medical bills paid directly to educational or medical facilities on behalf of another person
- Gifts that do not exceed the annual exclusion amount for that year
An annual exclusion dictates the amount of money or property you can give to another person or organization before it becomes taxable. The annual exclusion amount for 2018 is $15,000 per recipient, meaning you can gift a person up to $15,000 worth of gifts before you must pay taxes on these gifts. Ordinarily, the beneficiary of a gift does not have to pay a federal gift tax or income tax for receiving a gift.
If you wish to know more about powers of attorney, lifetime gift planning, or another type of elder law, you should speak with an experienced elder law lawyer.
Chester County, PA Elder Law Lawyers Here to Help You Plan Your Estate
If you or a family member want to ensure your estate is taken care of, you should consult with a Chester County elder law lawyer. The lawyers at Herr Potts and Potts understand the desire to pass on your estate to your family and are here to help you achieve those goals. To schedule a confidential consultation, call us at (610) 254-0114.