A lot of people who come to an estate planning and elder law attorney don’t know a lot about the law. Because of this you can often run into some potentially confusing terms that you may not be familiar with. This is incredibly common, and you always want to be sure to ask about unfamiliar terms so you know what is going on. Here are a couple of the more commonly misunderstood, and useful, terms you will want to know.
Under the law, a fiduciary is a person, or sometimes an organization, which has a legal duty to act in your best interest. Many people are often reluctant to create legal documents such as trusts or powers of attorney because these documents give someone else a lot of power. People are often reluctant to create these documents, even though they are incredibly useful, because people believe that those they give power to will abuse their positions for their own benefit. That is where the fiduciary duty comes in. Fiduciaries have a legal obligation to do what is in your best interests and can not use the position to further their own interests.
Your ability to create an estate plan hinges on your ability to make decisions. All adults are presumed to have this ability unless a court determines that they are legally incapacitated. This means that you can make any legal decisions you wish until you lose your mental faculties. You can also plan ahead for the possibility of becoming incompetent by creating documents which will take effect upon your loss of capacity, as well as by appointing others who can step in if that ever occurs.