You Can Complete Your Estate Plan During the Coronavirus Quarantine

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The coronavirus lockdown is happening in many states, following the lead of California, Illinois, Florida and New York. Kiplinger’s recent article entitled “How to Get Your Estate Plan Done While Under Coronavirus Quarantine” says that these isolation orders create unique issues with your ability to effectively establish or modify your estate plan.

The core documents for an estate plan are intended to oversee the management and distribution of your assets after you pass or in the event, you are incapacitated. Each document has requirements that must be met to be legally effective. Let’s look at some of these documents. Note that there is proposed federal legislation that would permit remote online notarization, and Illinois and New York have passed orders to allow notarization utilizing audiovisual technology.

Will. Every state has its own legal requirements for a will to be valid, and most require disinterested witnesses. Some states, like California, permit a will, otherwise requiring the signature of witnesses, to be valid with clear and convincing evidence of your intent for the will to be valid. An affidavit indicating that the will was signed as a result of the emergency conditions caused by the COVID-19 virus should satisfy this requirement.

Power of Attorney. This document designates an individual to make financial decisions regarding your assets and financial responsibilities if you’re unable to do so. This can include issues regarding retirement benefits, life, and medical insurance and the ability to continue payments to persons financially dependent on you. The durable general power of attorney is notarized in California.

Advance Health Care Directive. This document states whether you want your life extended by life support systems and if you want extraordinary measures to be taken. It may state that you wish to have a DNR (Do Not Resuscitate) in place.

HIPAA Authorization. Some states have their own medical privacy laws with separate requirements, and most powers of attorney provide that the designated persons can act if you’re unable to do so. Financial institutions typically require confirming letters from your doctor that you’re unable to act on your own behalf. To be certain that this agent can act on your behalf if needed, they should be given written access to see your medical information.

During quarantine, these requirements can be fluid and may change quickly. Be sure to work with an experienced estate planning attorney.

Reference: Kiplinger (March 30, 2020) “How to Get Your Estate Plan Done While Under Coronavirus Quarantine”

Do You Want to Decide or Do You Want the State to Decide?

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A will allows you to direct your assets to the people you want to receive them, rather than the alternative, which is relying on the laws of your state to direct who receives your assets, says the article “Will you plan now or pay later?” from the Chron.com.

A will is also the document used to name an independent executor with successors, in the unlikely chance that the first executor fails, refuses or becomes unable to serve. Your estate planning attorney will discuss the use of special trusts to provide for family members who are disabled, trusts for minors or special needs family members or even adult children.

There are three big considerations you may not have even considered that would require you to have an estate plan created in recent years to be reviewed or revised. Years ago, the federal tax exemption, which allows a person to leave a certain amount of money to beneficiaries, was much smaller than it is now.

This was a “use it or lose it” exemption. Here’s an example of how things have changed. In 1987, when the exemption was $600,000 per taxpayer, a couple would use a by-pass trust to shelter the first $600,000 upon the first to die to take advantage of the exemption. In 2020, the exemption is $11.58 million. The “use it or lose it” law is different. Therefore, if your will/trust still has a by-pass trust for this reason, it may be best to discuss it with your estate planning attorney. It is likely that you don’t need it anymore.

You also want a will to have some control over what happens to your assets when you die. Let’s say Betty and Bob have three children. Bob dies, leaving his assets to Betty, then Betty dies and leaves all of her assets to her three children. One of the children, Bea, dies shortly after Betty dies. Bea’s will leaves all of her assets to her husband Bruce.

Bruce remarries. When Bruce dies, the share of the family’s assets that Bruce inherited from his wife Bea may be left to Bruce’s second wife or the couple may spend them all during their marriage. If Bruce divorces his second wife, she may win those assets in a divorce settlement. Would Betty and Bob have wanted their assets to go to their grandchildren, instead of their son-in-law’s second wife and children?

An estate plan can be created to protect those assets, so they remain within the family, going to grandchildren or to the children of Betty and Bob.

While most people think of an estate plan as a plan for death, it’s also a plan for illness and incapacity. A perfectly healthy person is injured in a car accident or suffers a stroke. Without having documents like a power of attorney, power of attorney for health care, living will and medical privacy documents, the family will spend a great deal of time and money trying to establish legal control over the estate.

Speak with an estate planning attorney today to update your current will or create a will and the necessary documents to protect yourself and your family.

Reference: Chron.com (January 16, 2020) “Will you plan now or pay later?”

What Happens If I Don’t Have an Estate Plan?

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It’s so much better to have an estate plan than not to. With a will and/or trust, you can direct your assets to those whom you wish to receive a legacy, rather than the default rules of the State of California. This is according to a recent article in the Houston Chronicle’s entitled “Elder Law: Will you plan now or pay later?”

You should also designate an independent financial agent (known as an executor, power of attorney and trustee). You may want to have an estate planning attorney create a special trust to provide for family members who are disabled, along with trusts for minors and even adult children.

Here are three major items about which you may not have considered that may require changes to your estate plan or motivate you to get one. Years ago, the amount a person could leave to beneficiaries (the tax-free exemption equivalent) was much lower. You were also required to either use it or lose it.

For example, back in 1987 when the exemption equivalent was $600,000 per taxpayer, a couple had to create a by-pass trust to protect the first $600,000 upon the first to die to take advantage of the exemption. The exemption is $11.58 million in 2020, and the “portability” law has changed the “use it or lose it” requirement. There may still be good reasons to use a forced by-pass trust in your will, but in some cases, it may be time to get rid of it.

Next, think about implementing planning to have some control over your assets after you die.

You could have a heart attack, a stroke, or an unfortunate accident. These types of events can happen quickly with no warning. You were healthy and then suddenly a sickness or injury leaves you severely disabled. You should plan in the event this happens to you.

Why would a person not take the opportunity to prepare documents such as powers of attorney for property, powers of attorney for health care, living wills, and medical privacy documents?

It’s good to know that becoming the subject of a court-supervised conservatorship proceeding is a matter of public record for everyone to see. There is also the unnecessary expense and frustration of a guardianship that could’ve been avoided if you’d taken the time to prepare the appropriate documents with an estate planning or elder law attorney.

Why would you want to procrastinate making an estate plan and then die suddenly without ever taking the time to make your will? Without valid estate planning documents, like a trust, your family will have to pay more for a costly probate proceeding.

Reference: Houston Chronicle (Jan. 16, 2020) “Elder Law: Will you plan now or pay later?”

If I’m 35, Do I Need a Will?

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Estate planning is a crucial process for everyone, no matter what assets you have now. If you want your family to be able to deal with your affairs, debts included, drafting an estate plan is critical, says Wealth Advisor’s recent article entitled “Estate planning for those 40 and under.”

If you have young children or other dependents, planning is vitally important. The less you have, the more important your plan is, so it can provide as long as possible and in the best way for those most important to you. You can’t afford to make a mistake.

Talk to your family about various “what if” situations. It is important that you’ve discussed your wishes with your family and that you’ve considered the many contingencies that can happen, like a serious illness or injury, incapacity, or death. This also gives you the chance to explain your rationale for making a larger gift to someone, rather than another or an equal division. This can be especially significant if there’s a second marriage with children from different relationships and a wide range of ages. An open conversation can help to avoid hard feelings later.

You should have the basic estate plan components, which include a will, a living will, advance directive, powers of attorney, and a designation of an agent to control the disposition of remains. These are all important components of an estate plan that should be created at the beginning of the planning process. A guardian (or guardians) should also be named for any minor children.

In addition, a life insurance policy can give your family the needed funds in the event of an untimely death and loss of income—especially for young parents. The loss of one or both spouses’ income can have a drastic impact.

Remember that your estate plan shouldn’t be a “one and done thing.” You need to review your estate plan every few years. This gives you the opportunity to make changes based on significant life events, tax law changes, the addition of more children, or their changing needs. You should also monitor your insurance policies and investments because they dovetail into your estate plan and can fluctuate based on the economic environment.

When you draft these documents, you should work with a qualified estate planning attorney.

Reference: Wealth Advisor (Jan. 21, 2020) “Estate planning for those 40 and under”

Estate Planning for Unmarried Couples

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For some couples, getting married just doesn’t feel necessary. However, they need to know that they don’t enjoy the automatic legal rights and protections that legally wed spouses do, especially when it comes to death. There are many spousal rights that come with a marriage certificate, reports CNBC in the article “Here’s what happens to your partner if you’re not married and you die.” Without the benefit of marriage, extra planning is necessary to protect each other.

For one, taxes are a non-starter. There’s no federal or state income tax form that will permit a non-married couple to file jointly. If one of the couple’s employers is the source of health insurance for both, the amount that the company contributes is taxable to the employee. A spouse doesn’t have to pay taxes on health insurance.

More important, however, is what happens when one of the partners dies or becomes incapacitated. A number of documents need to be created, so should one become incapacitated, the other is able to act on their behalf. Preparations also need to be made, so the surviving partner is protected and can manage the deceased’s estate.

In order to be prepared, an estate plan is necessary. Creating a plan for what happens to you and your estate is critical for unmarried couples who want their commitment to each other to be protected at death. The general default by law for a married couple (even a very unprepared one with no documents) is that everything goes to the surviving spouse. However, for unmarried couples, the default may be a sibling, children, parents or other relatives. It definitely won’t be the unmarried partner.

This is especially relevant when a person dies with no will. The courts in the state of residence will decide who gets what, depending upon the law of that state. If there are multiple heirs who have conflicting interests, it could become nasty—and expensive.

However, a will isn’t all that is needed.

Most tax-advantaged accounts—Roth IRAs, traditional IRAs, 401(k) plans, etc.—have beneficiaries named. That person receives the assets upon the death of the owner. The same is true for investment accounts, annuities, life insurance and any financial product that has a beneficiary named. The beneficiary receives the asset, regardless of what is in the will. This can be an easy way to include an unmarried partner in your estate plan.

Checking, savings and investment accounts that are in both partner’s names will become the property of the surviving person, but accounts with only one person’s name on them will not. A Transfer on Death (TOD) or Payable on Death (POD) designation should be added to any single-name accounts.

Unmarried couples who own a home together need to check how the deed is titled, regardless of who is on the mortgage. The legal owner is the person whose name is on the deed. If the house is only in one person’s name, it may be difficult to transfer to the other person. Change the deed so both names are on the deed with rights of survivorship, so both are entitled to assume full ownership upon the death of the other.

To prepare for incapacity, an estate planning attorney can help create a durable power of attorney for health care so that partners will be able to make medical decisions on each other’s behalf. A living will should also be created for both people, which states wishes for end of life decisions. For financial matters, a durable power of attorney will allow each partner to have control over the other’s financial affairs.

It takes a little extra planning for unmarried couples, but the peace of mind that comes from knowing that you have prepared to care for each other until death do you part is priceless.

Reference: CNBC (Dec. 16, 2019) “Here’s what happens to your partner if you’re not married and you die”

What Is an Advance Care Directive?

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People start out with good intentions at the start of the year and then fail to follow through.  This makes difficult situations even worse for their family. The process begins with discussions about your care wishes, explains the Chicago Tribune’s Daily Southdown in the article “Talk to your family now about advance care directives.”

That conversation should include who you would trust as a health care agent. This person would be named in the medical power of attorney, an advance directive legal document that gives that person the power to make medical and care decisions on your behalf if you are not able to.

That person needs to know, from you, what’s important to you when it comes to quality of life or length of life. This is a very important document, as the person has the power to make life and death decisions on your behalf.

It also covers whether you want to be an organ donor. If an unexpected accident occurred and your organs were still healthy and working, would you want to give them to someone who needs a kidney or a heart? If that would be your goal, you need to make your wishes known to your health care proxy and health care providers, as well as to your family.

A living will is also important to have in place. This is used in cases of incurable or irreversible injury, disease, or illness. It expresses your wishes for end-of-life care. Depending on your medical condition, you may not be able to effectively communicate your wishes when that time comes. It gives you the ability to refuse any death-delaying treatment and allow you to die naturally.

These are family matters that should be discussed but often are not. The topics are hard, as they are centered on our mortality, the mortality of those we love, and the reality of death. However, when family members know what their loved one’s wishes are, it provides the family with tremendous relief.

Without a medical power of attorney or living will, the family may end up fighting over what each member thinks their loved ones wanted. Without clear direction from the family and the correct legal documents, the health care provider must take steps to prolong life, even if that is not what the person wanted.

When naming a health care agent, think about someone who you trust completely. That person will have access to your medical records and be able to approve who else sees them. They may also authorize tests and treatment, decide where you will receive care, which physicians will provide care and whether to accept, withdraw or decline treatment.

Reference: Chicago Tribune’s Daily Southdown (Dec. 30, 2019) “Talk to your family now about advance care directives”

Why are Two Brothers Fighting Over Their Mother’s Life?

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An elderly mom is at the center of a court battle between her two sons. Her eldest son is set to face off against his brother in Nassau County Court, arguing he wants to keep their mother on a ventilator and feeding tube, while his sibling wants to pull the plug.

The New York Post’s recent article entitled “91-year-old LI woman mouths ‘I want to live’ on video amid legal battle” reports that the older brother, Edward, submitted the video he says was taken in November. It shows their mother even mouthing the words, “I want to live.’’

The mom, Arline, has been physically incapacitated since suffering a string of circulation and breathing problems over the past year, Edward said. His brother, Kyle, asked a judge to declare him her sole guardian, noting that he hopes to take her off life support. However, he contends that this is what their mom would want.

Kyle accuses Edward of keeping their mom alive against her will, so he can stay in her Long Beach home and “plunder” her assets, including the total $5,400 she collects every month from Social Security and her pension. Kyle requested that the hospital take Arline off life support pursuant to her 1999 living will, in which she’d asked not to be kept alive by machines if she ever became seriously ill.

Edward says that his mother clearly changed her mind and denies he has a financial stake in keeping her alive. In fact, if her health improves enough that she can be moved from the hospital into a nursing home, as he hopes, her income and estate (and both sons’ inheritance) worth approximately a quarter-million dollars to each of them, will soon be eaten up by nursing-home costs, Edward argues. Edward says that he gave up his career in Colorado as a mortgage and real estate broker to come back to New York to care for her.

In his mother’s “I want to live” video, filmed in November from her hospital bed, Edward asks Arline, “You have no leg, right?” referring to a recent amputation of her left leg due to circulatory problems. She nods yes.

“You understand that?” he asks.

Again, she nods yes.

“You have a feeding tube in you, you understand that, right? You have a tracheotomy and you have the thing breathing for you?” Edward asks his mom.

His mother nods yes, each time.

Edward then urges her to mouth the words, “I want to stay alive,’’ just to be absolutely clear. She does.

“With everything wrong with you, do you still want to stay alive?” he asks again, gently.

Yes, she nods.

A week after the video was taped, she executed a living will, with the help of an elder law lawyer, that states, “I wish to be treated aggressively for all conditions” and directs doctors “to continue to prolong my life as long as possible, within the limits of generally acceptable health care standards.”

Edward said that the hospital staff conducted a competency hearing administered by a psychiatrist, and she was determined to be competent. He insists that there’s still a chance their mother’s health will improve.

Reference: New York Post (Jan. 5, 2020) “91-year-old LI woman mouths ‘I want to live’ on video amid legal battle” 

Can You Tackle Elder Law on Your Own?

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What usually happens when people do their own estate planning or work on elder law issues, without a lawyer who has years of practice? They may not incur the costs on the front end, but the costs, in financial and emotional terms, often arrive just when the individual or their family is most vulnerable. That message comes through loud and clear in the article “Do-it-yourself elder law estate planning can be risky” from a recent article in the Times Herald-Record.

Let’s clarify the two different areas:

  • Estate planning is about leaving assets to heirs with a minimum of court costs, legal fees and avoiding will contests.
  • Elder law is concerned with protecting assets from the cost of long-term care and empowering people who will be able to make legal, financial and medical decisions on your behalf if you become incapacitated.

Two of the most important documents in an elder law estate plan are the Powers of Attorney (POA) and health care proxies. If these forms are not prepared correctly, problems will ensue. In some states, like New York, the POA form is long and complicated. Banks and financial institutions will refuse to recognize the form if they are not completed correctly.

A POA needs to include the “Statutory Gifts Rider,” which allows broad giving powers to the elder law attorney to save assets, even on the eve of the person being admitted to a nursing home. Someone who is not an elder law attorney is not likely to know what this is, or how to prepare it.

There will be similar issues to a do-it-yourself health care proxy. Here’s just one example of the many things that can go wrong: an agent may not make decisions about withholding certain extreme life support measures, even if they are in possession of a valid health care proxy. There needs to be a living will from the individual that explicitly states their wishes regarding withholding heroic means and/or artificial measures. Without the proper documentation, the person could remain on life support for months or years, even if this was not their wish.

A do-it-yourself approach leaves much to chance. As a result, the potential for problems is enormous. A far better solution that spares spouses and loved ones is to work with an experienced estate planning lawyer. Can you put a price on peace of mind?

Reference: Times Herald-Record (Nov. 23, 2019) “Do-it-yourself elder law estate planning can be risky”

The Key Health Document Most Americans Don’t Have but Should

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You may not like the idea of contemplating your own mortality, or that of a loved one. You may procrastinate for many years about putting your final wishes in place. However, there is one document that is important for yourself, your loved ones, and your life. The health care directive. Forbes’ recent article titled “Two-Thirds of All Americans Are Missing This Estate Planning Document” explains why you shouldn’t put it off any longer.

A health care directive is a legal document that an individual can use to give specific directions for caregivers, in case of dementia or illness. It directs end of life decisions. It also gives directions for how the person wishes their body to be cared for after their death.

This document is known by several different names: living wills, durable health care powers of attorney or medical directives. However, the purpose is the same: to give guidance and direction to loved ones when making medical and end-of-life decisions.

This document itself is a relatively new one. The first was created in California in 1976, and by 1992, all fifty states had similar laws. The fact that the law was accepted so fast across the country, indicates how important it is. The document provides the family with stability and certainty for a loved one during the time a person is impaired, and even after their death. That is at the heart of all estate planning.

Yet just as so many Americans don’t have wills, only a third have a health care directive. That’s a surprise since both estate planning attorneys and health care professionals regularly encourage people to have these documents in place.

A key part of a health care directive is selecting an agent. This is the person who will act as the proxy to make decisions for another person, consistent with their wishes. They will also have to advocate for the person with respect to having treatment continue or shifting to pain management and palliative care. The spouse is often the first choice for this role. An adult child or other close and trusted family or friends can also serve.

The agent’s role does not end at death but continues to ensure that post-mortem wishes are carried out. The agent takes control of the person’s body, making sure that any organ donations are made if it was the person’s wish.

Once any donation wishes are carried out, the agent also makes sure that funeral wishes are done according to the person’s wishes. Burial is an ancient tradition, but there are many different choices to be made. The health care directive can have as many details as possible or simply state burial or cremation.

Having a health care directive in place permits an individual to state his or her wishes clearly. Talk with your estate planning attorney about creating a health care directive as part of your comprehensive estate plan.

Reference: Forbes (December 13, 2019) “Two-Thirds of All Americans Are Missing This Estate Planning Document”

Managing an Aging Parent’s Financial and Legal Life

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Managing an Aging Parent’s Financial and Legal Life
Beautiful young girl-volunteer and handsome old man are playing chess and smiling

As parents age, it becomes more important for their children or another trusted adult to start helping them with their finances and their legal documents, especially an estate plan. In “Six tips for managing an elderly parent’s finances,” ABC7 On Your Side presents the important tasks that need to be done.

Make sure the family knows where important personal and financial documents are in an emergency. Start with a list that includes:

  • Bank, brokerage and credit card statements
  • Original wills, powers of attorney, healthcare directives, and estate planning documents
  • Insurance policies
  • Social Security information
  • Pension records
  • Medicare information

They’ll need a list of all accounts, safe deposit boxes, financial institutions and contact information for their estate planning attorney, CPA and financial advisors. Even if they don’t want to share this information until an emergency occurs, make sure it is organized and compiled somewhere a family member can find it easily.

Set up direct deposit for any incoming funds. Automating the deposit of pension and benefit checks is far more secure and convenient for everyone. This prevents a delay in funds being deposited and checks can’t be stolen in the mail or lost at home.

Set up automatic bill payment or at least online bill payment. Making these payments automatic will save a lot of time and energy for all concerned. If your parents are not comfortable with an automatic payment, and many are not, try setting up the accounts so they can be paid online. Work with your parents, so they are comfortable with doing this. They will appreciate how much easier it is and saving themselves a trip to the post office.

Have a “Durable Power of Attorney” prepared. This is a legal document prepared by an estate planning attorney that gives one or more people the legal authority to handle finances or other legal matters if they become mentally or physically incapacitated.

Have a “Living Will” and a “Healthcare Power of Attorney” prepared. The Healthcare Power of Attorney allows a person to make health care decisions for another person if they are mentally or physically incapacitated. The Living Will allows a person to express their wishes about end-of-life care if they are terminally ill and unable to express their wishes.

Take precautions to guard against fraud. Seniors are the chief targets of many scams for two reasons: First, if they have any kind of cognitive decline, no matter how slight, they are more likely to comply with a person posing as an authority figure. Second, they have a lifetime of assets and are a “rich” target.

An estate planning attorney can work with your parents to assist in preparing an estate plan and advising the family on how to help their parents as they age. Most estate planning attorneys have access to a large network of related service providers.

Reference: ABC7 On Your Side (Sep. 5, 2019) “Six tips for managing an elderly parent’s finances,”