I recently wrote about the absolute necessity for a Medical Directive that grants “exclusive power of attorney” to your Agent in order to communicate your health care wishes and instruct your caregivers and respond to the actual known facts and variables when a you need to make a real health decision. Your medical directive goes into effect when:

1. You cannot communicate your own wishes for your health care:

A. Orally, B. In writing or C. Through gestures and

2. You are diagnosed as near death due to a terminal illness or in a permanent coma, and

3. Medical staff caring for you will be notified of your written instructions.

WHAT IS A FINANCIAL DIRECTIVE?

In summary, a “Medical” Directive is a legal Instrument that addresses the problems of your health care and a “Financial” Directive is a legal financial Instrument that empowers your Agent over all your financial matters and to exercise or perform any act under of a “Principal / Agent” Relationship, with power, duty or right of any obligation over everything that he currently has or may acquire in the future, in relation to any person, matter, transaction or property, real or personal, tangible or intangible . , now owned by you or subsequently acquired by you, including but not limited to general powers and powers specifically listed as to each possible event or circumstance.

For your Financial Directive to be legally binding for all third parties, third parties notified of your relationship between the Principal / Agent, your instrument must be in writing, duly witnessed or notarized with the power to indemnify all those who accepted it in good faith. .

Your Financial Board must grant your Agent full powers and authority to do everything necessary in the exercise of any of the powers as fully as it could or could do if it were personally present, with full power of substitution or revocation, ratifying and confirming everything. that your Agent can legally do or have it done under your Financial Directive.

ESSENTIAL TAX PLANNING: THE FINANCIAL DIRECTIVE

A financial directive should be part of your estate tax planning.

Your Financial Directive Instrument should address the following general powers and specifically list those powers for each possible event or circumstance:

1. Demand, receive and obtain through litigation or otherwise, money or other thing of value to which the Principal has, may become, or claims to be entitled, and keep, invest, disburse or use anything so received for the intended purposes. .

2. Contract in any way with any person, on terms acceptable to the Agent, to achieve a transaction purpose and execute, terminate, amend, release or modify the contract or other contract made by or on behalf of the Principal.

3. Execute, acknowledge, seal and deliver a deed, revocation, mortgage, lease, notification, check, release or other instrument that the Agent considers desirable to achieve the purpose of a transaction.

4. Process, defend, submit to arbitration, resolve and propose or accept a compromise with respect to an existing claim for or against the Principal or intervene in a litigation related to the claim.

5. Seek on behalf of the Principal the assistance of a court to carry out an act authorized by your Financial Directive Instrument.

6. Hire, compensate, and fire an attorney, accountant, expert, or other assistant as necessary or relevant to primary purposes.

7. Maintain proper records of each transaction, including an accounting of receipts and disbursements.

8. Prepare, execute and file a record, report or other document that the Agent considers desirable to safeguard or promote the interest of the Principal under a statute or governmental regulation.

9. Reimburse the Agent for the expenses duly incurred by the Agent in the exercise of the powers granted by this Instrument.

10. In general, carry out any other lawful act with respect to the subject in question.

WHEN DOES YOUR FINANCIAL DIRECTIVE COME INTO EFFECT?

Your financial directive goes into effect when you are deemed disabled or incapacitated.

For the purposes of your Financial Directive Instrument, “disabled or incapacitated” means when a physician certifies in writing on a date after the date your Instrument was performed that, based on a medical examination performed by your physician, your physician would He declares mentally incapable of managing his financial affairs.

Your financial directive should have a paragraph to “legally authorize you / the examining physician” to disclose your physical or mental condition to another person for validation. You can even authorize a second doctor for a second opinion. After this verification and disclosure of your disability status, a third party who accepts your Financial Directive is fully protected from any action that is taken.

FINANCIAL DIRECTIVE COMPARED TO THE GENERAL POWER OF ATTORNEY

I remember cases where the spouse was unable to participate in important business meetings of which her temporarily incapacitated husband was a member, and decisions were being made that affected her husband’s interest in the business. While a general power of attorney may have been sufficient, it most likely would have required further legal action. The Financial Directive is a significantly stronger Instrument than a general power of attorney, and would have specifically addressed issues related to the spouse’s ability to sit and vote with the Agent, on decisions that affect the company and, more specifically, their ownership interest. of the company, with the capacity to bring professional assistance to consult with her on such important matters.

CAUTIONARY PROVISIONS WITHIN YOUR FINANCIAL DIRECTIVE THAT YOU DO NOT WANT YOUR AGENT TO HAVE

While we have listed the details of your Agent’s powers, there are some powers that you would not like your Agent to have:

1. Your Agent cannot execute a will or codicil on your behalf.

2. Your Agent cannot execute any trust on your behalf; however, your Agent may enter into a custody agreement with another “independent” person or bank with trust powers.

3. Your agent cannot divert your assets to himself. [or herself], its [or her] creditors or your [or her] estate.

4. Your Agent will not exercise or be vested in any incidents of ownership regarding insurance policies that insure your life and will not have power or authority over the life insurance policies that you may possess over the life of your Agent.

5. Your Agent is your TRUSTEE, and does not have general or limited power of appointment.

6. Your Agent will not exercise any power it has received from your Agent in a fiduciary capacity, and your Agent will not have authority to exercise any power, the exercise of which would cause any of your assets to be deemed subject to equity tax for the purposes of the federal inheritance tax or inheritance tax.

Your Agent will NOT have any power to override or modify any part of your Financial Directive in any way. Only the director can revoke or amend by written notice to all parties and only by certified mail with acknowledgment of receipt.