Estate Planning Bits

Why your college-age child needs his or her estate planning documents in place

If you have children who are over the age of 18, you should know that they need to have documents that are similar to your own. If your child gets ill while at school, without the proper documentation, you may not have access to talk to medical personnel.

When your child turns 18, they are no longer considered a minor, and you, (formerly their natural guardian,) no longer have the authority to make decisions for them. As a result, if you have to contact medical personnel at their college, it is likely that you will be told “We’re very sorry, but we cannot discuss any issues relative to your child, as we do not have authorization to do so.”

A child who is 18+ has the same rights as any other person, and privacy protection by the HIPAA (Health Insurance Portability and Accountability Act) prevents medical personnel from discussing medical decisions with anyone, including a parent, except in potentially dire need situations.

To prevent this potential problem, it is easy for your child to sign a health proxy, which allows someone, presumably you, to have access to your child’s medical records. This document should be given to the clinic or similar facility at their college when they arrive.

To bring home this point, there have been plenty of examples in recent years of situations at colleges involving violence. Again, your child’s college may not be able to share information without a health proxy, so you should keep a copy at home that could be faxed or email to the school if necessary and in the event that the school misplaces their original.

In addition, it may be beneficial to have a power of attorney in place so you have the authority to make financial decisions on behalf of your child if necessary.

Although this may be a difficult discussion, it could prevent a lot of emotional distress and anguish and is a relatively straight forward and easy document for your child to have. They may also even wish to include language within the document that allows organ donations if desired. Your child may also want to provide advice for end of life decisions, which would prevent protracted litigation over who will make these difficult decisions if and when your child is in a situation that requires them.

 

Hyman G. Darling, Esq.

Photo credit: Microsoft 

 

Estate Planning for Blended Families: Considerations for cohabitating or married couples with kids from other relationships

The modern family of today is often a mix of spouses, exes, kids, and steps who somehow find a way to make it all work. Estate planning for such an intricate blended family may be a little tricky, and there are lots of factors to consider. 

While traditional estate planning documents are critical, it is also important to consider a prenuptial or a cohabitation agreement. Either one of these agreements should spell out, in as much detail as possible, what will occur if the relationship dissolves, regardless of whether or not the couple is married. 

One of the major issues that this agreement should address is housing. When a couple purchases or rents a home together, if the relationship falls apart, and both parties are liable on a mortgage, what will happen?

Additional life insurance may be necessary if one of the parties is under an order of the court from a prior divorce decree wherein a percentage of assets is required to be maintained for the benefit of children from the prior marriage.

It is also important to consider each party’s health proxy and durable power of attorney. Who will be in charge of making decisions in the unfortunate event that one individual becomes incapacitated?

A will and possibly a trust should also be considered, and provisions within these documents should fairly closely mirror the prenuptial agreement to conform with all of the requirements set forth in that agreement, which may be construed to be a legal contract.

In addition, if there are any requirements under an order of the court from a prior divorce decree, those provisions should also be reviewed and included within one’s will.

When assets of relatively equal value are owned, some couples choose to retain their own assets in the event of a divorce, however, in the event of a death, some additional assets would be left to the survivor. Other options may include a possible phasing in of assets.

Health insurance should also be considered prior to marriage. Both parties may be receiving health insurance from a former spouse. The previous divorce decree, any modifications, and separation agreement should be reviewed carefully ensure that all benefits are maintained or solutions may be implemented.

The issue of life insurance and qualified plans such as 401(k)s, IRAs, 403(b)s, etc. should also be reviewed. It is very important to understand that such assets pass by beneficiary, not by will. Therefore, whoever is named as the beneficiary of these assets will receive them without the need of having those assets pass through probate.

Likewise, if assets are intended to pass to a trust or to individuals listed in a will, it is important to obtain change of beneficiary forms and have them signed and forwarded to the plan administrators at insurance companies when the documents are signed.

The bottom line is that there are many important considerations and decisions to make before remarrying or moving in with another person.

 

Hyman G. Darling, Esq.

Photo credit: Microsoft 

Preparing for your vacation

Vacation season is coming soon after the holidays. Are you planning a trip?

When planning to travel, it is common to experience nervousness. What would happen if you did not make it safely to or from your destination? Fortunately, you can establish an estate plan before your trip and quiet those fears. 

A simple plan includes a health care proxy, durable power of attorney, last will and testament, and possibly a homestead declaration. 

Should you experience an illness or injury while traveling that leaves you unable to handle your medical or financial decisions, having a health care proxy and durable power of attorney in place will make a world of difference. A health care proxy is a document in which you designate someone to make health care decisions for you if you are incapacitated. Similarly, a durable power of attorney is a document in which you designate someone to make your financial decisions. Having these documents in place allows the trusted person you have named to start handling your affairs as soon as you need assistance. 

God forbid you should pass away while traveling. Your family and loved ones would surely be shocked and distraught. But in the event that tragedy occurs, a last will and testament can provide some order during that otherwise difficult time. Your will sets forth the distribution of your probate estate, which are the assets that you leave in your name alone with no named beneficiary. In your will, you will also designate an executor, who is the person who will be responsible for carrying out your plan. Should you have minor children, you will also name a guardian, and possibly a trustee, who will be responsible for taking care of your children in your absence. This planning takes a tremendous burden off of your family members. 

For homeowners, a homestead declaration is a necessity. This is a one-page form that, once recorded in the Registry of Deeds, affirms that your principal residence is your homestead. It will protect the equity in your home up to $500,000 from judgments that arise after the declaration was recorded. Should you happen to cause an accident while traveling, the declaration will ensure that even if you are sued and your insurance is not sufficient, up to $500,000 of the equity in your home will be protected.

Gina M. Barry, Esq.

Photo credit: Microsoft   

Navigating the Minefield of Long Distance Caregiving

There comes a point when most of our nation’s elders will need assistance with various tasks, such as household management, bathing, dressing, medication management, meal preparation and eating, transferring, and/or using the restroom. In the past, such assistance was typically provided by family members, however, with the increased mobility of our society, it is now common for family members to be too physically distant to provide hands-on care

It is also common for an elder to be unwilling to move closer to their family, even if staying where they are means receiving care from someone other than their family members. Although the distance creates many hazards, steps can be taken to allow successful navigation of the minefield of legal, financial, and administrative issues that lie in wait for the long distance caregiver.

The most common legal issue associated with providing proper care and oversight from a distance involves establishing proper legal authority to ensure ongoing care in the event of incapacity of the elder. This legal issue can be easily resolved through the elder’s execution of a durable power of attorney and health care proxy. These documents give someone the elder chooses the authority to make financial and medical decisions on their behalf if they are incapacitated.

In addition, end of life decisions should be discussed with the elder, and their wishes should be memorialized in writing within the proper legal document. Ideally, the estate plan will also include a will, which provides clear instructions as to the disposition of the elder’s estate upon their passing away.

This is just the tip of the iceberg. If you are caring for your aging parent from afar, call us, and we’ll help you set up the proper documents for their care.

 

Gina M. Barry, Esq. 

Photo credit: Microsoft   

Vacation? Establish an estate plan before your trip

Vacation season is upon us, and it seems that everyone is planning to get away. Are you planning a trip? Is your estate plan up to date? 

Many people contact their lawyer within days of taking their trip. This is not ideal, as you should not rush the completion of your estate plan. If at all possible, you should contact your attorney at least one month in advance of leaving. Should you find it necessary to establish a plan quickly, establish a simple plan and commit to refining it upon your return. This includes a health care proxy, durable power of attorney, last will and testament, and possibly a homestead declaration. 

Should you experience an illness or injury while traveling that leaves you unable to handle your medical or financial decisions, having a health care proxy and durable power of attorney in place will make a world of difference. 

A health care proxy is a document in which you designate someone to make health care decisions for you if you are incapacitated. Similarly, a durable power of attorney is a document in which you designate someone to make your financial decisions. Having these documents in place allows the trusted person you have named to start handling your affairs as soon as you need assistance. 

God forbid you should pass away while traveling. Your family and loved ones would surely be shocked and distraught. But in the event that tragedy occurs, a last will and testament can provide some order during that otherwise difficult time. Your will sets forth the distribution of your probate estate, which are the assets that you leave in your name alone with no named beneficiary. In your will, you will also designate an executor, who is the person who will be responsible for carrying out your plan.Should you have minor children, you will also name a guardian, and possibly a trustee, who will be responsible for taking care of your children in your absence. This planning takes a tremendous burden off of your family members. 

For homeowners, a homestead declaration is a necessity. The homestead declaration is a one-page form that, once recorded in the Registry of Deeds, affirms that your principal residence is your homestead. The homestead declaration will protect the equity in your home up to $500,000 from judgments that arise after the declaration was recorded. Should you happen to cause an accident while traveling, the declaration will ensure that even if you are sued and your insurance is not sufficient, up to $500,000 of the equity in your home will be protected.

 

Gina M. Barry, Esq.

Photo credit: Microsoft   

 

Taking over your parent’s finances - a slippery slope if not handled correctly

If you’re reading this article you’ve probably had to take care of your parent to some extent in the past, or perhaps you will have to in the future. When your parent or anyone else becomes ill or unable to attend to their own affairs, it becomes necessary for someone else to step up to the plate and assume the role of guardian, conservator, or agent under a durable power of attorney, which is usually the preferred legal means of taking over. 

It is important to be sure that your loved one’s bills do not remain unpaid or paid twice, and to protect your loved one from all of the usual schemes of identity theft, fraud, and other scams. You may not have had the opportunity to be in charge or have of current knowledge of your parent’s income and expenses, but it will be necessary for you to have full disclosure from your parent in order to make all of the necessary decisions. 

One of the best ways to be sure that nothing is lost in the process is to do pre-planning. This does require your parent to share information such as listing of assets, insurance policies, annuities, and tax returns with you if they regard this as an invasion of their privacy.

How this conversation is presented is critically important. You should be clear that you’re not looking to take over at this time, but you should have available all of the resources and information to step into your parent’s shoes and make their decisions when and if that time comes. If your parent is not willing to share everything, they should at least tell you where the information is. To the extent that your parent utilizes a computer, you should know where the login information and passwords are kept so that access will be available down the road. 

Possibly one of the most important considerations, however, is the respect that should be given to your parent in the transition process. In some cases, it may be a geriatric care manager, social worker, or other close family friend or relative who suggests that you should take over your parent’s finances, because no matter how or what is said, your parent may be defensive. Often times, the proposal to your parent best comes from an accountant or lawyer who doesn’t have a financial stake or personal interest in the process. 

 

Hyman G. Darling, Esq.

Photo credit: Microsoft   

Estate planning for same-sex and unmarried couples and singles

There are many unique legal issues to consider relative to the estate planning process for same sex couples, couples who have not decided to get married, and single people. Although many of the planning techniques are similar, since there is no “legal” relationship, special documents must be prepared in many cases.

Naturally, it is important that a Will be given the due consideration in the planning process, but often other required documents are not given as much attention, and they may actually be more important. This “lifetime planning” is relative to your Health Proxy and Power of Attorney, which may allow another person to make decisions for youl upon your incapacity.

Power of Attorney:

Your Power of Attorney is a very important document, since it controls decisions over your finances upon incapacity. Care should be taken to be sure that when a person is named, that individual has business sense, is trustworthy, and also has the time to manage and direct your investments if you cannot do so for yourself. If this document is not prepared, then a conservator will have to be appointed by the Probate Court, and this process often times becomes time consuming, expensive, and emotionally draining.

In this document, a partner or close friend may be named instead of a direct family member. A family member may be displeased with your choice, but once the document is signed, your backup agent is in charge of all financial affairs in the unfortunate event of your incapacity, regardless of your family members’ wishes. Keep in mind though that death revokes the Power of Attorney, and therefore, this document is not used for post-death decisions.

Health Proxy:        

Your Health Proxy is also an important consideration. This person may be someone different than the one serving as Power of Attorney, but it should be someone who is close to you and will who carry out your wishes. Within this document, there should also be a backup person named in the event that the primary decision-maker is unable to make decisions due to their own illnesses.

Once again, a family member may be somewhat aggrieved that they are not making these decisions, but it can be written such that the decision maker should consult with a family member, but need not heed their advice when making decisions. Within this document, there should also be language regarding funeral and final disposition arrangements, so that there will be no question as to who is in charge and what will happen. In addition, whether or not you wish to be an organ donor should be included in this document as well as on your license.

Will/Trust:   

Needless to say, your Will is also an important document, and you should pay particular attention to who is in charge of your estate as your personal representative. This person will be in charge of making all distributions and decisions, attending to tax matters, and possibly closing your business if your own one. If this person is not able to serve, consider who the backup will be, and if there is no appropriate person, perhaps a bank or trust company can serve in this role.

Within your Will, there may also be a memorandum regarding how specific items of tangible property shall be distributed and to whom. Often, these items are more sentimental than material in value, but they could cause a significant dispute. The objective is to prevent dispute with this document.

If a Trust is to be used, often the named personal representative is also serving as the trustee, with specific instructions as to how your assets should be divided. Again, within this document, it is sometimes anticipated that a family member may not be pleased with the ultimate disposition of your assets, and therefore a specific clause may be included within the document that specifies who your family are and who shall not be a beneficiary under your Trust/Will.

In order to further protect your named beneficiaries, it is often advisable to have a so-called “no contest” clause in the document. This means that if an individual is not satisfied with the amount they are receiving, and if they were to challenge the Will on any grounds, and even if they are successful, they will lose a part of their inheritance, and thus relinquish what otherwise would have passed to them. This clause puts the possible objector in a precarious situation, since they would be forfeiting their distribution in order to attempt to gain more. They must give significant thought regarding whether they wish to challenge the document and forfeit the amount that was left to them prior to moving forward with that case.

Although there are many other considerations, it is important that an unmarried person or members of a same sex couple pay attention to the way assets are held and how they are to be distributed before making a decision to finalize their estate planning documents.

 

Hyman G. Darling, Esq.

 

Photo credit: Microsoft  

Alzheimer's Disease: the long goodbye

In 1983, President Ronald Reagan called members of the Alzheimer's Association to the White House for the signing of a proclamation declaring November as the National Alzheimer's Disease Awareness Month. November, which is also National Family Caregiver Month, is an ideal time to raise awareness of the resources and services the Alzheimer's Association offers the more than 5 million Americans living with Alzheimer's, and the nearly 15 million family caregivers.

Alzheimer's disease, the most common form of dementia, is a physical and terminal illness. It is a disease of the brain that causes difficulties with memory, thinking, and behavior. It is not a normal part of aging. There are 10 common warning signs of Alzheimer's disease:

1. Memory changes that disrupt daily life;
2. Challenges in planning or solving problems;
3. Difficulty completing familiar tasks;
4. Confusion with time or place;
5. Trouble understanding visual images and spatial relationships;
6. New problems with words in speaking or writing;
7. Misplacing things and losing the ability to retrace steps;
8. Decreased or poor judgment;
9. Withdrawal from work or social activities; and
10. Changes in mood and personality.

Alzheimer's gets worse over time. One advantage of a timely diagnosis is that the person with Alzheimer's can often participate in their estate planning. He or she can decide who will make medical and financial decisions on his or her behalf in later stages of the disease, provided that they still have the legal capacity - the level of judgment and decision-making ability needed to sign legal estate planning documents. As such, it is imperative that one who is diagnosed with Alzheimer's begin making legal and financial plans as soon as possible, to the extent that they can.

Todd C. Ratner, Esq.

Photo credit: Microsoft  

Why your estate plan should change with your life

It is important to periodically review your will and estate plan, especially in light of the following changes in your life….

Children

Most parents are concerned about how their children will be cared for in the event that both parents die. It is imperative to name a guardian for your minor children within your will. Also, parents should consider a trust if they wish to stagger financial inheritance distributions for their children, instead of having the kids receive a lump sum at the age of 18.

Marriage

It is important to note that your spouse does not automatically become the executor of your estate. Furthermore, you want to assure that your assets are distributed according to your intentions. In the event that you die without a will, also known as dying “intestate,” the state in which you reside will dictate the distribution of your assets.

Divorce

In most states, a divorce revokes the provisions of a will that apply to the former spouse, which will require the need to create a new will. In addition, you should review your durable power of attorney, health care proxy, beneficiary designations, and other estate planning documents to ensure that they concur with your new distribution and planning intentions.

Remarriage

If you wish to separate your assets and nullify your inheritance rights to each other’s estates, a prenuptial agreement should be contemplated. Also, if you and your new spouse have children from prior marriages, a distribution plan should be discussed to assure that all children are provided for as intended. 

Middle Age

As you age, your assets tend to grow. It may be likely that when you initially executed your estate plan, you did not have the assets that you do now. In the event that you have assets including but not limited to a house, retirement plans, brokerage accounts, life insurance, etc… that exceed the Massachusetts threshold of $1 Million, an estate tax may be owed upon your death. As such, you may wish to consider trusts that facilitate sheltering these assets from MA estate tax.

Death of Spouse

Upon the death of a spouse, you may need to draft a new will or designate others to become your health care agent and durable power of attorney. Further, there may be advantages to disclaiming some of your inheritance for the benefit of contingent beneficiaries, such as your children. This is true especially if your estate has potential estate tax implications.

Life changes, and so should your estate plan. An experienced estate planning attorney should be able to assist you to assure that your plan is current as you navigate your ever-changing life.

Todd C. Ratner, Esq.

Photo credit: Microsoft  

 

Contesting an end of life marriage – dealing with a surprise beneficiary

Over the past several years, some estate litigation cases have included the marriage of a person who was close to death, whether an elder or a younger person with limited life expectancy. These cases are different than those such as Groucho Marx and Anna Nicole Smith, where one party was relatively young and one was relatively old, but the older person was not necessarily in an end of life situation. 

Sometimes these situations are basically marriages of convenience, and although “legally performed,” may be construed to be a sham. For instance, in recent history in New York, there were two cases that reached the courts in which the marriages were contested. In both cases, the marriages were declared to be invalid based on the incapacity of one of the parties.

Unfortunately, if you are a beneficiary or an heir in these situations, your primary recourse is to object to the will or file an action to set aside the marriage as being void based on incapacity. 

Sometimes a caregiver marries their “boss,” thus having superior rights to inherit than children, especially when a will and other testamentary changes are made, such as beneficiaries on life insurance policies and retirement plans. In several such cases, the children did not even know that their parent had married until after the funeral, and it is very difficult to obtain testimony about a person post-death. 

It is certainly easier to attend to an elder loved one’s affairs through a power of attorney and possibly a trust than have to litigate these situations, which costs time and significant expense and is also emotionally draining. In any case, it is important to know what your loved one owns for assets and attend to their affairs yourself to help assure that the plan proceeds without the interference of surprise, unwanted beneficiaries later in life or after death.

Hyman G. Darling, Esq.

Photo credit: Microsoft