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Where Estate Planning and Real Estate Meet

Estate Planning and Real EstateWhile I realize we're in the middle of the holiday season, once things quiet down, this time at the end and the beginning of the year is a perfect time to review family goals and important documents. Typically, we think about planning for real estate transactions and estate planning as two separate, distinct things. But I was recently reminded by my colleague, Arielle Cecala, an attorney at Blatman, Bobrowski, Mead & Talerman, that there are significant moments in our lives when these areas intersect in a big way. And if this is news to me, I definitely want to share it with you, so I invited Arielle to write a guest post — I hope you find this useful, and please welcome Arielle!

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Have you ever been named an executor, personal representative or power of attorney? Or maybe you’ve been through the estate planning process and have already drawn up a will, trust, power of attorney, and health care proxy. Most of us realize the importance of having this type of planning in place in order to be equipped for unforeseen life events. And one area where this planning can be significant is when it comes to managing real estate, especially in the instance where a loved one loses the legal capacity to sign documents for themselves.

A sample scenario: your aging father decides it’s time to sell the family home and move in with you. Just last year, he met with an attorney that specializes in estate planning and appointed you his power of attorney and personal representative (formerly called an executor) in his will. As you’re preparing the property for sale, your father suddenly has a stroke. He can’t talk or write and now needs extensive care. You panic. How can you sell the house? Who will pay for his care?

Luckily, your father took steps to plan for his incapacity while he was still physically and mentally well. You frantically call your father’s lawyer and arrange a meeting. A review of the documents shows a few things: 1) the power of attorney is actually “durable,” meaning it is still effective once the principal (your dad) becomes legally incapacitated; and 2) the power of attorney expressly authorizes the agent (you) to sell real estate. These are distinctions that a specialized attorney will know to include, and may not be readily apparent to someone taking the DIY approach on DraftYourOwnWill.com. With these documents in place, you are able to accept an offer from a buyer, close on the sale, and use the proceeds of the sale to help pay for in-home nurses to care for your dad in the comfort of your home.

The critical component here that saved the day in this example is that proper planning was done in advance. Life events can be unexpected and we never quite know what’s around the bend. What would have happened in our scenario if your father hadn’t met with that estate planning lawyer? In order for you to sign any legal document on your father’s behalf, you would have to go to the Probate Court and petition the Court to allow for a person to act as his conservator and legal guardian. This process can be long, expensive and drain essential resources, including money, energy and emotional well-being.

Consulting with a qualified estate planning attorney can be the difference in protecting your family, your assets and your peace of mind, no matter what life throws at you.

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Arielle Cecala Arielle Cecala is an attorney at Blatman, Bobrowski, Mead & Talerman, LLC. You can read her bio here.

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