Essential Estate Planning - Part I

July 1, 2002

Recently, I was asked how a gay man can legally protect his partner. The answer is through effective estate planning, and it is important planning even for singles. It is never pleasant thinking about our own incapacity and death and planning for it seems morbid. But if you don't make these plans, in writing, then you need to realize that what happens if you become legally incapacitated or die is determined by state law.

There are three things that determine what happens when you become disabled or die: (1) where you reside when this happens; (2) where your property is located; and (3) the documents you have executed prior to your incapacity or death. When you don't make these decisions, then in most states a judge or someone else in authority will have to make these decisions according to state law. Let's look first at capacity and incapacity.

Capacity generally refers to your ability to make decisions about your self (your person) and your property (your estate). In order to be considered competent to make legal decisions, the individual must be of minimum age (usually 18) and be of sound mind, that is, to have mental capacity. Capacity is a prerequisite for making a will or creating a trust. Incapacity is a prerequisite for someone else to make decisions about your health or finances. Unlike death, you can recover capacity. For example, when you come out of a coma or, even, when you wake up from a general anesthetic, you regain capacity. If you are schizophrenic but are placed on medications, a doctor can later judge you competent - so long as you stay on your meds.

Many of the documents I recommend in estate planning require witnesses. These witnesses are not just there to attest that they saw the documents being signed, they are also there to testify to the competency or capacity of the person signing the document. What happens if the witnesses can't be found? Well, most of these documents use what's called a self-proving affidavit which is signed by a notary who is also present when the witnesses sign their statements. In most states, this self-proving affidavit means that a probate court will not have to call in the witnesses if there is a dispute.

Whether partnered or not, I recommend that all of my clients have at least the following documents:

• Physician's Directive (a Living Will)
• Medical Power of Attorney
• Do Not Resuscitate (if desired)
• Power of Attorney for Financial Matters (sometimes called a Durable Power;)
• Declaration of Guardianship for Self and Estate
• Disposition of Pets

Physicians Directive

This document, sometimes called a living will, is a directive to your physician that states whether or not the physician should take extraordinary measures to keep you alive (such as maintaining you on life support or intravenous feeding) or whether you should be kept comfortable and allowed to die peacefully, should you have a terminal condition. Be sure to discuss this with your doctor and give a copy to your primary care physician.

In Texas, if a doctor cannot follow your directive for moral or other reasons, he or she is required to assign your care to another physician. Also, the document must be signed in the presence of two witnesses, only one of whom can be a relative, heir or other interested party.

Medical Power of Attorney

In states without domestic partner laws, only your legal relatives can make medical care decisions for you if you are unable to do so for yourself. This document lets you assign that decision-making process to someone you trust, such as your partner or a friend, rather than someone who may not make decisions about your medical care that are in accordance with your wishes. This document does not come into effect until you are legally incompetent and, even then, if you are able to express your wishes, they must be followed. You can revoke this at any time, by writing revoked or something similar on the original, destroying the original, or orally. I always include a specific statement revoking any prior medical power when I draft a new one for a client.

You should provide a copy of this to your primary care physician as well as give copies to your designated agent and all alternatives. I also list in the document where the original and all copies are located. As in the physician's directive, this document must also be witnessed.

Do Not Resuscitate

If you don't want to be resuscitated, you should have this agreement. Otherwise, emergency medical technicians may try to bring you back to life.

Power of Attorney for Financial Matters

In contrast to the Medical Power of Attorney, this document lets you designate someone who will manage some or all of your financial affairs if you should become unable to do so yourself. It does not allow this person - your agent - to manage your medical affairs which is why you need both kinds. There are two kinds - general powers which cover all non-medical powers and specific, or special powers of attorney, which cover only those things that are designated in the document. Most people will want to use the general powers.

Powers of attorney can come into effect when they are signed, or they can be springing powers, which mean they lie dormant until some specific event described in the document occurs, such as incapacity. They remain in effect until you say they are revoked, either in language in the document, such as a specific date or when capacity is regained, or by a specific revocation, as in the medical powers. They also expire when you expire. Many people use a standard power, called a durable power, which remains in effect indefinitely. Most states have statutory form for this kind of power.

This document can be misused - after all, you're giving your agent permission to do things like sell your property, write checks, etc., - so you don't want to give them to someone you wouldn't trust with your affairs and you may want to use springing powers if you don't completely trust the person you designate as your agent.

This document must be signed when you are competent to do so and you should provide copies to the person you designate as your agent, as well as anyone named as an alternate. This document must notarized and may need to be witnessed.

Declaration of Guardianship for Self and Estate

When a person becomes unable to care for them self and/or their estate, another person can be named as guardian. Natural or adoptive custodial parents are automatically the guardians of their minor children. However, guardianship ceases when a person is no longer a minor (usually when they are 18) and guardianship over adults involves a complicated legal proceeding that is meant to ensure that the adult ward truly requires a guardian and the guardian is really capable of taking care of that person. A person can have a guardian over their person and a separate (or the same) guardian over the estate.

When a permanent guardian is appointed, it cancels out the medical and financial powers of attorney you (hopefully) signed. Furthermore, unless you designate someone else, your guardian will most likely be one of your relatives, such as your legal spouse, your adult child, a parent, or a sibling. Most importantly for gay couples, this does NOT include your gay partner or friend. Therefore, I recommend that you execute a declaration of guardianship.

In this document, you first declare who you want to be your personal guardian and who should manage your estate. They can be the same person but they will be declared separately, and you should propose several alternatives, in case your first choice is incapable or unwilling to be appointed. A declaration should be thought of as a strong recommendation to the judge who decides the matter. Most states restrict who can be a guardian so make sure your choices are not legally incapable or the judge won't appoint them.

Where this document is most helpful, however, is it allows you to declare persons who may NOT be your guardian. So if you don't want your anti-gay Aunt Alma to be your guardian, you place disqualification statement in this document and, in most states, the judge cannot appoint her.

In Texas, this document does require two witnesses, a notary and includes a self-proving affidavit. Even if witnesses are not a requirement in your state, I would be sure to do this anyway.

Disposition of Pets

For many of us, our pets are like children - so why treat them with any less love because you are unable to care for them. This document simply states who should care for your pets should something happen to you. I recommend this separately from a will because it should come into effect as soon as you become incapacitated or die, thereby making sure someone is looking after them immediately. Be sure to put information about your preferred veterinarian in their and any special instructions. This document should give someone permission to enter your home and remove your pets. Keep the original with your original powers of attorney for financial matters and give copies to the same people who have copies of that document.

Most US states now follow a model probate code and so my comments are based on this code and my knowledge of Texas law. However, there are enough differences between the states that you need to discuss these things with a knowledgeable attorney licensed in your state to make sure these documents are valid where you live.