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2 Lessons for Families on a Tight Budget

By November 9, 2011No Comments
Photo: J Linder, MO

The Great Recession was enough to make most people try to pinch pennies where they can. However, the fact is that planning for the protection of your family costs money; it may not cost tens of thousands of dollars, but it still costs. Basic instruments that help protect the family are generally available for little or no charge at the courthouse – or on most state governments’ websites.  Still, to ensure that your instruments are correct, which means your family is appropriately protected, a legal consultation, even if brief, may be worth it. And for goodness sake don’t try to prepare the instruments yourself. Document preparation services and low-cost collectives are in what is referred to as a “race to the bottom.” Allow me to illustrate this point:

Once, I was in court for a hearing, so I decided to make it a 2-fer and get another client’s instruments filed with the court after my appearance. Waiting for the clerk, I overheard another clerk speaking with a woman who was trying to decide how to handle a guardianship matter in the least expensive, most efficient way she could. The woman told the clerk that she had the appropriate Power of Attorney (“POA”) and had possessed this document for a long time. The clerk then responded that the woman was “fine.” As a lawyer and, more importantly, as a human being, I find it necessary to step in when someone may be unwittingly jumping off a cliff. So I gently injected myself in the conversation just to inform these ladies that Illinois had changed both its powers of attorney a few months earlier. Eyes became saucers … oops.

Lesson #1: Good advice isn’t typically free, BUT bad advice is typically very, very expensive.

Even if an individual believes that they can’t afford a lawyer, instruments and the requisite advice for basic family protection is available for much less than the cost of really bad advice:

  • Healthcare Power of Attorney, authorizes another individual to make decisions regarding your medical care and treatment while you are incapacitated.  This POA is available in many places and is relatively self-explanatory. However, if you seek to have an attorney review your form, depending on your health, it should not take an unreasonable amount of time amounting to an unreasonable fee. Caution: If the form is driven by an online document preparation service, be sure an attorney licensed to practice in your state with a focus on estate planning performs the review. Laws change and automated document preparation services can’t modify their forms as quickly as an independent lawyer.
  • HIPAA release forms, instruct medical institutions to release your medical records to the individual you designate on the form. The forms are universal because they’re governed by federal law and are available almost everywhere. They should supplement your Healthcare Power of Attorney.
  • Property Power of Attorney, like a healthcare POA, authorizes an individual to step into your shoes and make decisions about your financial affairs. Also, like the healthcare POA, the document is readily available and should be reviewed by an appropriate attorney.

Lesson #2: VIP documents, providing basic family protection, before death, cost a lot less than bad advice, even with proper attorney review.

Today, most families are on tight budgets, but that shouldn’t prevent you from being able to protect your family like families whose budgets are more flexible. However, to not protect properly…well…see Lesson #1.

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