Estate Planning Bits

Demystifying terms used by estate planning attorneys

Agent: The person given legal authority to make financial decisions for a person through a durable power of attorney document or the legal authority to make health and medical decisions for a person through a health care proxy document.

Artificial Life Support: Medical equipment and other technology used to prolong the life of a person who is seriously ill by sustaining essential body functions, like breathing.

Assets: Personal possessions of value, including cash, bank accounts, real estate, vehicles and investments.

Beneficiaries: The people named in the will to receive the estate of the person upon his or her death.

Conservator: The person appointed by the courts to make financial decisions on behalf of a person.

Custody: Legal responsibility of a person.

DNR:  Stands for “Do not resuscitate” and refers to a person’s instructions that, if his or her heart or breathing stops, the doctor should not try to restart it.

Durable: When a power of attorney document is durable, it is valid even after the person with dementia can no longer make his or her own decisions.

Execute: To legally sign or “carry out” a legal document.

Executor: The person named in a will to manage the estate of the person upon his or her death.

Grantor: The person for whom a living trust is created.

Guardian: The person appointed by the courts to make health care decisions on behalf of a person (sometimes also includes financial decisions.)

Health care agent: The person given legal authority to make health care decisions for a person through a health care proxy document.

Legal capacity: The level of judgment and decision-making ability needed to sign official documents.

Probate:   The process used by the court to distribute the property of a person who has died.

Trustee: The individual or bank chosen to manage the property (assets) in the trust document of a person.



by: Todd C. Ratner, Esc.

HIPAA language and authorizations – its affects upon long-term care

The Health Insurance Portability and Accountability Act of 1996 (HIPPA) provides that absent a written statement from a patient, a health care provider cannot disclose medical information to anyone other than the patient or the person appointed under state law to make health care decisions for the patient. In the event that a health care provider fails to comply with HIPPA, there are civil penalties plus a criminal fine of $50,000.00 and up to one year of imprisonment for each occurrence.

As such, doctors, hospitals and other health care providers are extremely reluctant to release any information absent a release from the patient. The inability to obtain information about a loved one can be very upsetting especially when the information regards the treatment as part of long-term care.

Therefore, you should consider executing a document specifically authorizing the release of this information to loved ones so they can access the necessary medical information to make a well-informed decision about your medical treatment if you are unable to make these decisions yourself due to a temporary or permanent condition.

In the Commonwealth of Massachusetts, a Health Care Proxy is the appropriate document to provide this release. Your estate planning attorney can create such a HIPAA Authorization for you.

By: Todd C. Ratner, Esquire

Why women need an estate plan

Women experience unique economic realities. They tend to live longer and move in and out of the workforce due to career interruptions for child birth and elder parent care. This means that women often qualify for much lower pension benefits and receive lower Social Security benefits due to their years employed and salaries attained, which cannot be increased by the husband’s pension or social security if he experiences an untimely death.

Fewer years in the workforce, fewer years with a single employer, and lower pay are all factors that may contribute to a lower average pension for females, and Social Security benefits are calculated based on a person’s highest 35 years of earnings. If a benefit recipient does not have 35 years in the workforce, the Social Security Administration will add zero-earnings years to his or her record to equal 35 years.

Moreover, women often have diminished retirement savings due to the health care costs for the spouse who dies first, (usually the male.) Women most often become the caretaker for their husbands, which reaps immeasurable financial benefits by delaying the significant expense of nursing home care. But, who is there when the widowed wife needs assistance, as the average nursing home cost in Massachusetts is approximately $7,500.00?

Women must work with their husbands to implement a plan to ensure that the total health care and estate planning needs of their family is addressed. They should be guarded against the incapacity and the death of their spouse.

There are certain documents that are regarded as necessities for life in today’s active, uncertain society to protect loved ones:

• Durable Power of Attorney: This document that establishes who will attend to your financial decisions in the unfortunately event of your incapacity.
• Health Care Proxy: This document that ensures that medical decisions are carried out in accordance with your intentions in the event that you become mentally or physically disabled to the extent that you cannot make informed decisions on your own behalf.
• Will: This document provides for an orderly distribution of your assets.

However, the above documents are just the tip of the estate planning spectrum. It is also important that to consider Medicare and Medicaid (MassHealth in Massachusetts) planning, interplay between long-term care and financial planning, use of long-term care insurance and housing options and alternatives to nursing homes, to name a few.

By: Todd C. Ratner, Esquire

Sharing critical estate planning and financial information with your children, and how to do this if you want to keep the details private

A few years ago I presented an Estate Planning Program to employees of the Wall Street Journal. Most of these people were rapidly approaching retirement, and by now, they probably are retired.

They were all very interested in planning for their future, but there was one special attendee who was a writer for the Journal. A couple weeks after the presentation, I read his article in the Wall Street Journal about the importance of planning to save taxes, avoid probate, protect assets for long-term care situations, and generally to do estate planning for the right reason, that is to ensure that funds and assets will pass to the appropriate parties at the appropriate times. The article went on to explain the need for all of the important documents, planning and obtaining good counsel for the plan. However, toward the end of the article, the author talked about the importance of discussing the plan with his parents, but since he could not discuss this issue with them personally, he merely stated that he hoped they were reading the article.

My recommendation to many of my clients is to not discuss all of the details of their plan with their children, but to make sure that the kids have a complete and accurate picture of their assets all in one place. This includes copies of bank statements, financial records, life insurance policies, tax returns, etc.

Many people don’t want to make this information available to their children now, but they should at least tell their kids where their important papers are and who is in charge, such as their financial advisor, insurance agent, lawyer, accountant, banker, trust officer, etc. If they don’t do this, their kids will spend a significant portion of their time when their parents either become incapacitated or die, searching for all of the information. Your children will also need access passwords to get information that may be stored on your computer.

In your case, you may have an open family relationship and be willing to discuss planning issues with your children. This includes not only end of life decisions such as life support, organ donation and funeral arrangements, but also discussion about who may be in charge of making financial, medical, and other decisions in the event of your incapacity or death. Although this may lead to the opening of Pandora’s Box and causing family disharmony when children who think they should be in charge find out that they are not, at least all parties within the family will be educated about what you want and what plan has been prepared.

If you are not interested in sharing all of this private information, you may provide a list of items and where the documents are kept, where safe deposit boxes are and located, where the keys are maintained, where passports, veteran’s administration documentation, medical insurance cards, and other important information is maintained. At least then, if there is an emergency, someone will have access to this information, whether it be your child, a trusted advisor, your lawyer or another family member.

Frequently, after a plan is completed in our office, the parents wish a full disclosure to be made (possibly not about all assets,) but about the plan itself, and they want to share the plan with their children. We may consider having an open family discussion with some children being present in the office and some available by conference call or video conferencing in order to allow the entire family to be informed as to the client’s intentions. This serves the purpose of educating all parties so that they will know the intent, goals and objectives of their parents, while at the same time “clearing the air” of any misinformation that may have been implied or presented to any party in the past. If a child asks a question that a parent is not willing to answer, the issue is delicately averted if that is my client’s desired result.

By: Hyman G. Darling, Esq.

Healthcare Decision Day 2008 – a time to review or establish your Healthcare Proxy

Today is Healthcare Decision Day across the country. The purpose is to raise awareness of the importance of planning for healthcare decisions not only relative to end of life, but all medical decision making. It is somewhat timely that this day follows tax day, resulting in two important dates being consecutively “celebrated.”

In Massachusetts, any adult has the right to prepare for the eventual situation where they may not be able to make decisions for themselves. In the Commonwealth, this is called a Healthcare Proxy, but in other states the document may be called a Living Will, Advanced Medical Directive or Statements of Wishes. These documents should be prepared while you are competent, and well, thus proving that you can think clearly about the decisions you’re making, including who you want to make your end of life decisions.

It is important to put these wishes in writing so there won’t be any issue when it becomes necessary to utilize this document. Perhaps one of the most noteworthy cases in recent history was the Terri Shivo case. Terri had allegedly told others what she wanted, but since her wishes were not in writing, the Courts disregarded them. The 17 court cases that occurred over several years regarding Terri’s desires remind us of the adverse situation that may occur when you don’t effectively plan.

Many people put off these decisions. However, it is important to establish them now so there won’t be any confusion about your desires. This will establish clear lines of authority for decision making and determine the course of action to take or not to take when the time comes. This document is so important that it is really not an option for you to go without it. Whether or not you want to be kept alive is a personal decision that is too important to leave to a likely very emotionally overwhelmed family member.

While most states do not allow for assisted suicide, a decision may be made to not prolong the dying process. This allows a person to be taken off life support if there is no reasonable likelihood that they are going to recover with any dignity or quality of life. This so called “living will” language should be included within your Healthcare Proxy since living wills are not allowable in Massachusetts. However, in other states, this may be utilized as a separate document that provides clarification and direction to the individuals making medical decisions for you when you become incapacitated.

Once the document has been completed, a copy should be given to your family members, your proposed decision makers and the physicians who will be talking with family members about these decisions when the time arises.

While most Healthcare Proxies do not have to be notarized, they need to be in writing and should be witnessed similar to a Will. However, I strongly urge all my clients to be sure that their documents are notarized so if you become ill in a state that requires a notarized statement, the document will comply with the laws there.

If your Healthcare Proxy hadn’t been revised for some time, it should be updated to comply with any new laws, such as the HIPAA waiver, which will permit your agent or backup agent to talk with your physician or medical provider to obtain the necessary information to allow him or her to fulfill your wishes.

By: Hyman G. Darling, Esq.

How divorce affects your estate plan

It is a fact that nearly half of American marriages today are likely to end in divorce. The psychological steps may entail a long and arduous path, but the legal steps to take are fairly straightforward.

Typically, a divorce divides up property rights and custody of children. The next important step is to review your estate planning documents in light of your new circumstances. It’s likely that your spouse was named as an agent under your power of attorney and health care proxy, giving him or her the authority to make decisions for you when you were unable to make them for yourself. Although you are now divorced, your now ex-spouse still has that authority until you change it. Few of us would want our ex-spouse to have the authority to make medical or financial decisions that affect our lives.

Likewise, when you were married, you most likely named your spouse as the beneficiary for life insurance and retirement plans. Even if the beneficiary designation in favor of your now ex-spouse is revoked automatically, you will still need to designate who you want as your new beneficiary.

You will also want to re-consider each individual designated as a trustee, guardian, beneficiary health care agent and power of attorney, among others, in light of your new circumstance. While you may still want your ex-spouse to continue in some roles, such as Trustee for a trust for your joint children, you may not want him or her to continue in other roles. You should review each document and consider whether the estate planning decisions you made when you were married reflect your current sentiments.

By: Todd C. Ratner, Esquire

Special situation estate planning – a terminally ill person’s control of their own treatment

Although all people should have similar Estate Planning documents such as a Will, Healthcare Proxy and Power of Attorney, not all documents should be the same. Individuals should have special language included within their documents that apply to their particular situations.

For instance, a person with Multiple Sclerosis will have different needs than one with ALS, Chrones disease or another debilitating illness. The only commonality among these situations is that each one will have an adverse affect on a person as the illness progresses. The estate planning documents drafted to address these peoples’ needs could include additional language or possibly a side letter from the individual that explains specifically what he or she wants, needs, or does not desire respective to appropriate medical devices or procedures as their illness progresses.

For instance, a person may write their own advanced medical directives to be incorporated within their Healthcare Proxy or Living Will with instructions regarding how to handle certain stages of their medical deterioration, including whether or not they want to be kept alive by heroic means. Measures included in such directives may include use of a resuscitator or G-Tube. Each person may decide the track of his or her individual care and incorporate this within their entire estate plan.

Although a lawyer should not “play doctor” in these situations, it is important for the attorney preparing these documents to ask enough questions to ensure that their client has a good understanding of the potential adverse physical and mental effects on their body. There is no shortage of material available on the internet or from national or local societies that provide assistance to people suffering from illnesses.

Clients must be educated to know what to include or exclude from their estate planning documents. Frequently attorneys don’t ask sufficient questions to know what their clients want or present sufficient options.

Certainly, when clients are alive and competent, they may make their own decisions, including changing or revising their pre-designated healthcare options. However, a problem arises when a client becomes incapacitated or otherwise does not have cognitive ability to make intelligent decisions about his or her own healthcare. Unfortunately, when this occurs, a client often doesn’t believe that he or she has lost ability to make informed decisions, despite their family’s and medical personnel’s belief that they are no longer thinking clearly about their care.

To address this circumstance, it’s a good idea to have a “trigger” that designates when one or more individuals, usually a physician, will have the ability to declare the client incapacitated to the extent that he or she may no longer exercise control. At that point in time, a backup person or committee of individuals will be designated to take on the responsibility of making decisions for the incapacitated person.

It is important to emphasize however that with proper clarity within estate planning documents, the nominated agent should not really be making decisions at all, but rather, will be carrying out the requests of their friend or family member, who has pre-designated the specific requirements and procedures they want for their own care.

Sometimes a person has a temporary lapse in capacity due to a setback such as pneumonia, a reaction to a medication or possibly a situation such as a urinary tract infection. In these situations, it is important that the wishes of the principal are carried out to assure satisfaction when he or she regains control of their own medical care.

In any event, it is important to prepare estate planning documents while a person is competent to do so. But there should be as much specific direction included as possible, so when and if they have to be utilized, there will be no question about the procedures to be implemented at that time. If there is any specific illness, such as cancer, Alzheimer’s, Parkinson’s, ALS or other debilitating illness, there should be specific mention of the fact that this condition existed at the time the documents were prepared.

By: Hyman G. Darling, Esquire

Prearrangements and funeral instructions – preventing misunderstandings and respecting your wishes

In recent past, two public figures died leaving their affairs rather in disorder. One was Ted Williams and the other was Anna Nicole Smith. In both situations, their family members argued over the final disposition of the body, and this held up burial.

This situation would have been an unlikely occurrence if each individual had left specific instructions relative to his or her disposition, including burial, cremation, or cryogenics.

This language should be included not only in your Will, but also in your health care proxy, since by the time your Will is located, read and distributed to your family members, your funeral may have already occurred, without respecting your funeral instructions.

In addition, if you have specific desires, they should be addressed with your chosen funeral director while you are alive and competent. This will assure that all your intentions receive proper attention, including requested clergy, songs, readings and any other specific desires you have. Since there will be very little left to question, whether or not your family agrees, they have a legal as well as moral obligation to carry out your wishes.

As more and more people are opting to pre-plan and often pre-pay their funeral during their lifetimes, these issues should become less frequent, but sometimes disgruntled family members object or attempt to cause problems.

Issues often occur when there is a second marriage and the children from the first marriage do not agree with the second spouse. There have been situations that necessitated two wakes, separate visiting hours for different sides of the family and sometimes even two separate funeral services, since all related family members could not agree or even be in the same room at the same time.

This is indeed unfortunate, and a funeral director and lawyer must often fill the roles of social workers and mediators in an attempt to facilitate funeral arrangements with disgruntled family members. When such matters become severely contested, a judge has to make decisions on a fairly immediate basis in order to allow the matter to proceed. In some cases, the family may not agree with the judge, and they then appeal, which also takes significant time.

A further complication sometimes occurs when a person who has remarried dies, and his or her former spouse has already passed away. The surviving family members may not know whether their parent should be buried with their former spouse or with the second spouse, and certainly, the surviving spouse may have his or her own opinion as to what their now dearly departed would have wanted.

You can never provide too much detail and information prior to your death regarding your post-death instructions and funeral arrangements. That’s the only way you can be assured that your wishes will be carried out rather than those of your family, and even more importantly, prevent a judge from deciding for you.

By: Hyman G. Darling, Esquire

Be wise on your demise – an estate planning checkup

Very often, as I am dictating my blog posts, I am with my wife. The other day she said to me, “I have a great title for another blog post.” Therefore, this is dedicated to my wife.

It is now a few months after tax season, and your “CPA/tax professional checkup” has passed. Possibly, your health and eye physicals have also been attended to. It may now be time to pursue a financial checkup to assure that all your estate planning documents are up-to-date and in order.

Even though your documents may have been valid at the time they were signed, it may be time to review them to determine whether they need to be revised due to changes in tax laws, a situation with your child, (financial or medical) or perhaps merely a need to adjust to an increase or decease of your assets, or a change of residence from one state to another.

Once an estate plan has been initiated and prepared, it is usually pretty easy to review or revise it. Many clients review their plans on a three-year or five-year schedule, only to determine that they are still in good order and do not need any further changes. Even fairly straightforward documents such as a health care proxy and power of attorney should be reviewed to assure that your health care proxy has been updated to provide for the HIPAA waiver language and that your power of attorney now includes the power to make gifts, including those to the agent under the power of attorney if that is your desired result.

Perhaps your spouse has passed away or become incapacitated and your documents need to be revised to provide for a contingent backup person. In addition, all your life insurance beneficiary designations, retirement plan benefits and designations and other jointly held assets should be reviewed to assure that the proper names are included or excluded as you desire.

A recent review of a client’s plan indicated that all of her children were named in equal shares, but one child had become estranged from the family. Therefore my client’s documents needed to be revised to specifically exclude that child, include no-contest language, and also remove him as a beneficiary from life insurance policies.

In any event, it is important to review your documents, all the details your plan, including names on accounts, beneficiary designations, and all other assets to assure that the plan is complete and updated.

By: Hyman G. Darling, Esquire

The benefits of Health Care Proxies and Durable Powers of Attorney for college age kids

Having a valid Health Care Proxy and Durable Power of Attorney is important for college-aged “kids.”

With the spring semester having just passed, many parents awaited the safe and exhausting trek home of their college-aged kids. Many kids are preparing to spend a semester abroad, in another state, or just take some time away from it all. Regretfully, we have all heard of the rare situations where a freak accident occurred during a long drive, scuba diving near Baja or having a bit too much fun out for the night with friends.

What happens when a medical emergency arises and your child cannot make or convey his or her own decisions? You, or you and your spouse or ex, rush to the hospital and want to know what is going on with your now adult child. Without a valid Health Care Proxy appointing you as the Health Care Agent or court appointed guardianship in place, the hospital is prohibited from releasing information or discussing the situation with you. Although you will find exceptions to how strictly medical providers implement this restriction, because of HIPPA Laws, medical facilities’ hands (and mouths) frequently are tied.

This topic is not made to create panic among parents or grandparents who know that a Health Care Proxy has not been signed, but rather, to encourage you to make time NOW while the student is home over the summer break to begin to broach the topic with your child.

It is hard to bring up the topic at a family dinner, but perhaps you just print out a copy of this article and leave it on your “child’s” desk, or bring it up during one of those rare evenings at home. In fact, many colleges encourage students to seriously consider signing such forms prior to leaving on semesters away from their home college.

Remember, although you consider this person your “child,” under the law, once he or she turns 18, under HIPAA, the medical care community treats him or her as completely separate and distinct from you, and owes that “child” full confidentiality unless he or she has executed a Health Care Proxy or a Medical Authorization form allowing you to make such decisions. True, there are circumstances where medical providers may still slip up and allow a parent or friend more information and input than warranted, but without the Health Care Proxy in-hand that appoints you as the Health Care Agent, the provider is prohibited from discussing the care and treatment of your child with anyone else, including you.

Remember, just because you are the parent of a child does not give you carte blanche to obtain information concerning your child’s medical circumstances with a health care provider, doctor or hospital. It is the properly signed and notarized HCP that documents the authority for a medical facility to release or share medical information. Once the document is signed, get copies of it to your child’s college health services, primary care physician, and possibly even consider putting a copy in the glove-compartment of his or her car.

One more thing that should be mentioned; even with a signed Health Care Proxy, a medical care provider may only discuss your child’s medical situation under very narrow circumstances, when there is a medical situation which requires action and your child cannot make informed decisions about his or her medical care or cannot communicate those decisions. Therefore, your child’s privacy is protected. For example, you can’t get information about pregnancy or eating disorders under this document as long as your child exhibits the ability to make informed decisions and communicate them.

By: Lisa L. Halbert, Esquire

PS - on a personal note, my son arrived in Costa Rica recently with an ATM card in hand and little other money. His card was rejected by the local banks. I am happy to report that just prior to leaving, he signed a Durable Power of Attorney, so I was able to shift his funds around and discuss with the bank the "now what," of his situation.