For many Clark County residents, digital assets comprise a great deal of their daily interactions. They log onto their social media accounts on a daily basis, take pictures that they share online and even monitor their financial accounts online. Despite daily interactions with these assets on various platforms, dealing with them in an estate plan can be a complicated matter.
An issue that sometimes comes up in Nevada is when people are incapacitated at the time they change their will or name another as the executor of their estate. When this happens, family members may challenge the validity of the will through the court.
People in Nevada who are working on their estate plan may want to consider including a financial power of attorney as part of that plan. A durable power of attorney grants immediate access to the principal's financial affairs while a springing power of attorney kicks in when the principal is found to be incapacitated.
As Nevada residents get older, they may start having problems making financial choices for themselves if they develop a mental condition, such as Alzheimer's or dementia. It is very important that a power of attorney is set up before this happens that will allow a trusted person to make financial choices for them if they become incapacitated.
Both the power of attorney designation and the formation of a trust are powerful estate planning tools that many principals use in Nevada. A trust can help provide detailed instructions on how a person's assets should be managed for the benefit of others. A power of attorney can give another person the legal right to make financial decisions and conduct financial transactions on another person's behalf. However, the two tools will not necessarily go together if certain steps are not taken.
As people age, they tend to lose some of their cognitive function. Maybe their memory slips, or perhaps they find they cannot make financial and legal decisions for themselves. As such, it may be wise to grant a loved one or trusted advisor the power of attorney.
To be legally effective, a power of attorney must adhere to specific guidelines and requirements as set forth under Nevada law, which we have addressed in earlier posts. As important to remember is that once a power of attorney is established, it must still follow certain legal requirements in order for the authority it carries to be validly executed.
When you are writing your living trust, it is vital to name someone who will make important health care decisions on your behalf, should you become incapacitated. This is called granting durable power of attorney for your healthcare. Being incapacitated is generally defined one of two ways. One, it means that you, for one reason or another, cannot communicate your wishes. Or, it could mean that you cannot understand the different healthcare options available to you. In this case, having a trusted individual acting on your behalf can be highly beneficial.