Planning for Incapacity

Planning for IncapacityWhat would happen if you were mentally or physically unable to take care of yourself or your day-to-day affairs? You might not be able to make sound decisions about your health or finances. You could lose the ability to pay bills, write checks, make deposits, sell assets, or otherwise conduct your affairs. Unless you’re prepared, incapacity could devastate your family, exhaust your savings, and undermine your financial, tax, and estate planning strategies. Planning ahead can ensure that your health-care wishes will be carried out, and that your finances will continue to be competently managed.

Should you become incapacitated without the proper plans and documentation in place, a relative or friend will have to ask the court to appoint a guardian for you.


It could happen to you

Incapacity can strike anyone at any time. Advancing age can bring senility, Alzheimer’s disease, or other ailments, and a serious illness or accident can happen suddenly at any age. Even with today’s medical miracles, it’s a real possibility that you or your spouse could become incapable of handling your own medical or financial affairs.

What if you’re not prepared?

Should you become incapacitated without the proper plans and documentation in place, a relative or friend will have to ask the court to appoint a guardian for you. Petitioning the court for guardianship is a public procedure that can be emotionally draining, time consuming, and expensive. More importantly, without instructions from you, a guardian might not make the decisions you would have made.

Advanced medical directives

Without legal documents that express your wishes, medical care providers must prolong your life using artificial means, if necessary. With today’s modern technology, physicians can sustain you for days and weeks (if not months or even years). To avoid the possibility of this happening to you, you must have an advanced medical directive.

There are three types of advanced medical directives: a living will, a durable power of attorney for health care (or health-care proxy), and a Do Not Resuscitate order (DNR). Each type has its own purpose, benefits, and drawbacks, and may not be effective in some states. You may find that one, two, or all three types of advanced medical directives are necessary to carry out all of your wishes for medical treatment. Be sure to have an attorney prepare your medical directives to make sure that you have the ones you’ll need and that all documents are consistent.

Living will

A living will allows you to approve or decline certain types of medical care, even if you will die as a result of the choice. However, in most states, living wills take effect only under certain circumstances, such as terminal injury or illness. Generally, a living will can be used only to decline medical treatment that “serves only to postpone the moment of death.” Even if your state does not allow living wills, you may still want to have one to serve as an expression of your wishes.

Durable power of attorney for health care

A durable power of attorney for health care (known as a health-care proxy in some states) allows you to appoint a representative to make medical decisions for you. You decide how much power your representative will have.

Do Not Resuscitate order (DNR)

A DNR is a doctor’s order that tells all other medical personnel not to perform CPR if you go into cardiac arrest. There are two types of DNRs. One is effective only while you are hospitalized. The other is used while you are outside the hospital.

Protecting your property

Without someone to look after your financial affairs when you can’t, your property could be wasted, abused, or lost. To protect against these possibilities, consider putting in place a revocable living trust, durable power of attorney (DPOA), or joint ownership arrangement (or a combination of any or all options).

Revocable living trust

You can transfer ownership of your property to a revocable living trust. You name yourself as trustee and retain complete control over your affairs. If you become incapacitated, your successor trustee (the person you named to run the trust if you can’t) automatically steps in and takes over the management of your property. A living trust can survive your death. There are, of course, costs associated with creating and maintaining a trust.

Without someone to look after your financial affairs when you can’t, your property could be wasted, abused, or lost.


Durable power of attorney (DPOA)

A DPOA allows you to authorize someone else to act on your behalf. There are two types of DPOA: an immediate DPOA, which is effective immediately, and a springing DPOA, which is not effective until you have become incapacitated. Both types of DPOA end at your death.

A DPOA should be fairly simple and inexpensive to implement. However, a springing DPOA is not permitted in some states, so you’ll want to check with an attorney.

Joint ownership

A joint ownership arrangement allows someone else to have immediate access to property and to use it to meet your needs. Joint ownership is simple and inexpensive to implement. However, there are some disadvantages to the joint ownership arrangement. Some examples include: (1) your co-owner has immediate access to your property regardless of incapacity, (2) you lack the ability to direct the co-owner to use the property for your benefit, (3) naming someone who is not your spouse as co-owner may trigger gift tax consequences, and (4) if you die before the other joint owner, your property interests will pass to the other owner without regard to your own intentions, which may be different.

How is incapacity determined?

Incapacity can be determined in one of two ways:

  • Physician certification – You can include a provision in a durable power of attorney designating one or more physicians who will make the determination. Or, you can state that your incapacity will be determined by your attending physician at the relevant time, whomever that might be.
  • Judicial finding – The court may be petitioned to determine incapacity. After a proceeding where medical and other testimony will be heard, a judge will decide whether you are incapacitated according to the legal standards in your state.


Contact our Peoples Investment Services, Inc. representative at 828-464-5620 or 

This information, developed by an independent third party, has been obtained from sources considered to be reliable, but Raymond James Financial Services, Inc. does not guarantee that the foregoing material is accurate or complete. This information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. This information is not intended as a solicitation or an offer to buy or sell any security referred to herein. Investments mentioned may not be suitable for all investors. The material is general in nature. Past performance may not be indicative of future results. Raymond James Financial Services, Inc. does not provide advice on tax, legal or mortgage issues. These matters should be discussed with the appropriate professional.

Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC, an independent broker/dealer, and are not insured by FDIC, NCUA or any other government agency, are not deposits or obligations of the financial institution, are not guaranteed by the financial institution, and are subject to risks, including the possible loss of principal.

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2015

Tips for Choosing a College (or Feel Better About Choosing a College)

Tips for Choosing a College In some circles, the debate over college education can be volatile and has all the features of a gripping novel: huge financial stakes, strong emotions from hormonal teenagers (and their equally hormonal parents), and the very real potential of short- and long-term success or ruin. And that’s leaving out the different ways that parents, children and other interested parties even define success or failure.

Peoples Bank wants to be the benevolent and grandfatherly influence here, so while not taking up the debate, we do want to offer some suggestions that will help reduce the emotional and financial stress that choosing a college can bring to your family.

The ACT compiled a helpful web page about choosing a college with five simple steps. (Yes, the same ACT who stressed you out from elementary thru high-school with their “assessment tests”. This is them making it up to you.) Of the five steps, four include very good information that we think help not only make the process more efficient, but help you feel good about taking the fifth and final step, “make the final decision”. You should review the website when you have time, but here are some highlights from it:

  • The first step is the Identify Important Factors in Choosing a College, making a list of items to consider when evaluating and comparing different college options.
  • One of the resources on this site is the “Career Planning Process” within the Think About Your Reasons for Going to College step, which includes the comment “decide what you want from life and use college as a tool to help you get there”.
  • In the List and Compare step, they include the ACT Profile tool to help you collect information about colleges, rank them, and suggest you talk to professionals in the field you’re interested in to see what they have to add to the discussion about college.
  • Questions to Ask on a Campus Visit step has some useful questions, such as asking students if they could register for the class they want, and how successful graduates are at finding a job.

Choosing a college is often a tough process for a family. The decision process itself is not the only complicated thing, so are the environmental variables. The cost of a college education takes one’s breath away. And it’s not like a college degree can guarantee a job these days. Added to the mix is that a whole lot of people have found better alternatives in trade school or technical school enrollment. Recently The Simple Dollar updated their blog post on just this issue, “Why You Should Consider Trade School Instead of College”. Famously, some of the world’s richest and most successful people never finished college. There is even a website devoted to the famous, rich and successful people who were high school or college dropouts.

Peoples Bank knows how hard it is to make and then execute the decision about college. We know that money is just one part of the equation. So, while we have people standing by to help you with the family’s financial matters, we will continue to support you and your family in its effort to thrive and be happy, no matter what. That is what you should expect from a bank for Real People.

For more information, see these helpful links:

FDIC insurance coverage may exceed $250,000 per account

FDIC insuranceA big reason to keep your deposits at a recognized bank is the deposit insurance offered by the Federal Deposit Insurance Corporation (FDIC). Most of you reading this are too young to remember the pain that people felt when their deposits disappeared along with their bank during the Great Depression that occurred about 90 years ago. But the government felt the pain, not just the depositors, which is why the FDIC exists, and why you don’t have to worry about your deposits disappearing if the bank fails.

For a long time the limit of insured deposits was $100,000. But that was when $100,000 was a lot of money. Now the insurance for each depositor is up to $250,000 with some special considerations.

Each depositor at each insured institution is “fully insured” up to $250,000. The word “fully” there doesn’t mean what you’d think it means, the total amount on deposit; it means that dollar amount less than or equal to $250,000.

The key concepts to FDIC insurance coverage are “each depositor at each insured institutions” and “insured account categories”.

The FDIC insurance categories

There are six common categories based on Single, Joint, (certain) Retirement, Employment Benefit, Revocable Trust and Irrevocable Trust accounts.

One example provided by the FDIC to show what “fully insured” can mean is in the case of a Joint Account. Say that two or more people have equal rights to (are co-owners) of a deposit account where there are no beneficiaries named on the account. “Under the FDIC rules, each co-owner is separately insured for up to $250,000 for his or her ownership share in all qualifying joint ownership deposits he or she has in any one bank.” The cited example is of two co-owners who “would be fully insured for up to $500,000 in a joint account, in addition to any single ownership or other accounts they might have at the same bank.”

There is much more to know about FDIC insurance and its categories. Insurance coverage is also extensive for other types of account coverage, such as Revocable and Irrevocable Trust accounts. Talk to any Peoples Bank deposit specialist for more information.


Learn How to Repair Identity Theft

Learn how to repair identity theftMore financial losses may occur from identity theft than from any other property crime. This was true in 2012, when according to the Bureau of Justice Statistics, 7% of all the people 16 years old or older living in the United States suffered losses of more than $24 billion, $10 billion more than from any other property loss. In case you read past those numbers too quickly, 24 BILLION DOLLARS disappeared because of identity theft in 2012. Wow.

No wonder that the United States and other governments are joining with technology companies to solve this problem. And, no wonder that Peoples Bank has devoted substantial resources to informing customers and its communities about how to protect themselves.
The Federal Trade Commission has created a wonderful new resource to help consumers repair identity theft with a new site, named appropriately that provides a simple, easy to follow process of repair:

  1. What to do right away
  2. What to do next
  3. Other Steps

Each step includes suggestions of what to say and who to say it to. For example, within Step 1 is the suggestion to call the company where you know the fraud occurred and ask to speak to the fraud department, asking them to close or freeze the account(s). Such specifics are very helpful, and good to know.

We also like that each step has a “print checklist” option with the things to say and do along the way. There is a related action to take if you received a data breach notice and the text is also clear for disabled people using their web reader. The site is available in English and Spanish languages.

What if no one stole your identity but you want to learn more about how identify theft happens and who gets involved? Great question. FTC’s Identity Theft Consumer Information web page has links so you can learn about:

  • What to do when you receive a notice of a “data breach”?
  • How can you stay current with ways and means to protect your identity?
  • What free resources are available to help educate you and your children or other family members?
  • What information is available that is specific to law enforcement, lawyers or businesses.

And, by the way, the federal government is not the only compassionate organization with resources to help repair and avoid identity theft. Peoples Bank has a team of security and banking professionals continuously trained to protect your financial interests. The bank makes much of the information learned from its training program publicly available. Please do not hesitate to talk to your banker to make sure you have necessary precautions in place. Below is a brief list of some of the bank’s online resources:

Be assured that Peoples Bank is diligent, and constantly monitors for suspicious activity. We will notify you immediately of any such types of activity.

Thank you, in advance, for taking the basic precaution of having good, unique passwords for your financial accounts, and not taping them to your computer keyboard! By working together, we can shave billions off the identity theft statistics. But more important, we protect each other from financial fraud.