In 1992, before Donna and Ollie Phillips began their family, they executed wills that named their yet to be born children as primary benefactors with the rest of their estate going to the Riley Hospital for Children. Years later, after not having any children, the Phillips set up durable powers of attorney, naming each other as attorney-in-fact.
As they were growing older, they befriended Elizabeth Shoemaker who helped manage their daily affairs. For three years the Phillips treated Shoemaker as the daughter they never had while family members questioned Shoemaker's intentions.
In mid-2006, Donna Phillips was diagnosed with Alzheimer's disease and within 18 months, her condition had deteriorated to the point that her doctor deemed her no longer able to manager her own affairs. In late 2007, the couple contacted their long-time attorney and expressed their desire to transfer their estate to Elizabeth. In their words, “[They] wanted everything to go to [Shoemaker] after their deaths,” because “she's like a daughter to us”.
Since Donna was unable to make such changes due to her condition, the attorney drafted a joint trust that named Ollie and Donna as grantors and primary beneficiaries. The document also named Ollie as an initial trustee with Shoemaker as successor trustee and remainder beneficiary. Several times over the course of the changes, the attorney reviewed the new trust with Ollie and Donna, seeking to assure the changes were of their own will and not an impulsive decision. After four months of drafting, on February 11, 2008, Ollie executed the joint trust by signing both his and Donna's names (by power of attorney).
On December 26, 2008, Ollie passed away. A family friend was appointed to serve as guardian of Donna's person and estate. When she found out about the recent changes and the new joint trust, the guardian filed a petition to revoke the trust. Despite the unusual circumstances of the changes and the sudden entrance of Elizabeth Shoemaker into their lives, the trial court denied the guardian's petition, citing that Ollie's creation of the trust was consistent with Donna's intentions and it's revocation would not be in Donna's best interest. After an appeal, the same ruling was established.
Were the Phillips victims of a convenient friend who drained them of their estate? It does not appear so, and this scenario proves how important power of attorney is in the estate planning process. Had the Phillips not established power of attorney, they would not have been allowed to established the joint trust after Donna's incapacity due to Alzheimer's disease. Despite instances of incapacity in Donna, further estate planning could take place in certain circumstances through the use of durable power of attorney.
We never know what type of disease, disaster, or illness may leave us incapacitated. With that in mind, establishing a durable power of attorney allows a designated individual (Ollie in the story above) to care for us and our estate in case of incapacity.
Antelope Valley estate planning law firm Thompson Von Tungeln (TVT) offers estate planning and administration for the affluent, discriminating client. As Board Certified Specialists in Estate Planning, Trusts and Probate as certified by the State Bar of California Board of Legal Specialization, partners Mark E. Thompson and Kevin L. Von Tungeln are expertly equipped to serve these clients with the creative, effective and custom solutions they demand. For more information, contact TVT at (661) 426-2499 or visit their websites at www.EstatePlanningSpecialists.com and www.Medi-CalHelp.com.