Advance Directives

Estate Planning For Aging Parents: Are Mom’s Affairs in Order?

Estate planning for aging parents
Discussing estate planning with your aging parents now will ease many transitions you are likely to face in the coming years

A few simple steps now, will greatly ease many of the transitions you are likely to face in the coming years with your parents. Estate planning for aging parents will help with the changes they face. What can you do to make sure your mother’s (or father’s) financial affairs are in proper order?

The Monterey Herald’s recent article, “Financial planning: Making sure Mom is taken care of,” says to first make sure that she has her basic estate planning documents in place. She should have a will and an Advance Health Care Directive. Talk to our experienced estate planning attorneys to make sure these documents fully reflect your mother’s desires. An Advance Health Care Directive lets her name a person to make health care decisions on her behalf, if she becomes incapacitated. This decision-making authority is called a Power of Attorney for Health Care, and the person receiving the authority is known as the agent.

Based on the way in which the form is written, the agent can have broad authority, including the ability to consent to or refuse medical treatment, surgical procedures and artificial nutrition or hydration. The form also allows a person to leave instructions for health care, such as whether or not to be resuscitated, have life prolonged artificially, or to receive treatment to alleviate pain, even if it hastens death. To limit these instructions in any specific way, talk to our attorneys.

Another option is to create a living trust, if the value of her estate is significant. In some states, estates worth more than a certain amount are subject to probate—a costly, lengthy and public process. Smaller value estates usually can avoid probate. When calculating the value of an estate, you can exclude several types of assets, including joint tenancy property, property that passes outright to a surviving spouse, assets that pass outside of probate to named beneficiaries (such as pensions, IRAs, and life insurance), multiple party accounts or pay on death (POD) accounts and assets owned in trust, including a revocable trust.  You should also conduct a full inventory of your parent’s accounts, including where they’re held and how they’re titled. Update the named beneficiaries on IRAs, retirement plans and life insurance policies.

Some adult children will have their parent name them as a joint owner on their checking account. This allows you greater flexibility to settle outstanding obligations, when she passes away. Remember that a financial power of attorney won’t work here, because it will lapse upon your mother’s death. However, note that any asset held by joint owners are subject to the creditors of each joint owner. Do not add your daughter as a joint owner, if she has marital, financial, or legal problems!

You also shouldn’t put your name as a joint owner of a brokerage account—especially one with low-cost basis investments. One of the benefits of transferring wealth, is the step-up in cost basis assets receive at time of death. Being named as the joint owner of an account will give you control over the assets in the account—but you won’t get the step up in basis, when your mother passes.

We invite you to request a consultation with one of our Madison area estate planning attorneys to discuss estate planning for your aging parents.

Reference: Monterey Herald (March 20, 2019) “Financial planning: Making sure Mom is taken care of”

Estate Planning 101: Should I Create a Trust If I’m Not Rich?

Trust Lawyer Madison
Trust are a fantastic tool for the average person or couple, not just the rich.

It’s probably not high on your list of fun things to do, considering the way in which your assets will be distributed, when you pass away. However, consider the alternative without estate planning; family battles, unnecessary taxes, and an extended probate process. These issues and others can be avoided if you create a trust.

Barron’s recent article, “Why a Trust Is a Great Estate-Planning Tool — Even if You’re Not Rich,” explains that there are many types of trusts, but the most frequently used for these purposes is a revocable living trust. This trust allows you—the grantor—to specify exactly how your estate will be distributed to your beneficiaries when you die, and at the same time avoiding probate and stress for your loved ones.

When you speak with our Madison area estate planning attorneys about setting up a trust, we will also discuss your will, healthcare directives, a living will and powers of attorney.

Our attorneys will retitle your probatable assets to the trust. This includes brokerage accounts, real estate, jewelry, artwork, and other valuables. Your attorney can add a pour-over will to include any additional assets in the trust. Retirement accounts and insurance policies aren’t involved with probate, because a beneficiary is named.

While you’re still alive, you have control over the trust and can alter it any way you want. You can even revoke it altogether.

A revocable trust doesn’t require an additional tax return or other processing, except for updating it for a major life event or change in your circumstances. The downside is because the trust is part of your estate, it doesn’t give much in terms of tax benefits or asset protection. If that was your focus, you’d use an irrevocable trust. However, once you set up such a trust it can be difficult to change or cancel. The other benefits of a revocable trust are clarity and control— you get to detail exactly how your assets should be distributed. This can help protect the long-term financial interests of your family and avoid unnecessary conflict.

If you have younger children, a trust can also instruct the trustee on the ages and conditions under which they receive all or part of their inheritance. In second marriages and blended families, a trust removes some of the confusion about which assets should go to a surviving spouse versus the children or grandchildren from a previous marriage.

Trusts can have long-term legal, tax and financial implications, so it’s a good idea to work with our experienced Madison estate planning attorneys.

Reference: Barron’s (February 23, 2019) “Why a Trust Is a Great Estate-Planning Tool — Even if You’re Not Rich”

Power of Attorney, Living Wills: Before a Crisis Strikes

Health care directives
Make sure your health care directives are in order before a crisis strikes.

The last thing you want to be doing at three in the morning when you are heading to the hospital to meet up with your frail mother-in-law is wondering if anyone has signed a health care directive.  However, all too often, this is how the scenario unfolds, says Expert Click in the article “How to Get Power of Attorney for Aging Parents.

A health care power of attorney permits another individual to make medical decisions when a person is unconscious or unable to make a medical decision.  This is also often the time the adult child is asked if there is a living will.

Both the living will, and the medical and financial power of attorney documents should be created and executed well in advance of the emergency trip to the hospital. However, unfortunately, this is not always the case.

Planning for unexpected medical situations, by having the power of attorney and living will in place in advance is better. Even young people need these documents since accidents happen.

The problem of having these documents for elderly people is that they are sometimes resistant to having them created. You may need to have more than one discussion before they agree to complete the forms. While you are working on getting these documents for your parents, have them prepared for yourself and for your adult children.

No one plans to become sick or to be in an accident. However, the reality is, even if we are lucky enough to avoid accidents or illness, we all age. By having these documents in place, we can be assured that when help is needed, decisions can be made by someone you choose.

The power of attorney and living will require more than just signing off on a piece of paper. They need to include the person’s understanding of what the documents mean, finding the right person to appoint and discussing the medical and financial desires of the person, so the power of attorney agent agrees to fulfill that person’s wishes and has no qualms about following their directions.

Sometimes the person named on these two important documents is not a family member, but a respected and trusted friend or even a professional. Family members are often overcome by emotion at the time of a medical crisis and are unable to make critical decisions. You know your family best: will they be able to act in a time of crisis? If not, you’ll want to name someone else in these documents.

These decisions should be done in conjunction with preparing a will, so the estate plan is in place. Our estate planning attorneys can take you and your family through the process and will be able to answer any questions you or your aging parent may have. If you or your parents do not have these important documents in place, we invite you to request a consultation with one of our experienced estate planning attorneys.

 

Reference: Expert Click (Feb. 12, 2019) “How to Get Power of Attorney for Aging Parents.

 

When Should I Review My Estate Plan?

As life changes, you need to periodically review your estate plan and discuss your situation with your estate planning attorney.

WMUR’s recent article, “Money Matters: Reviewing your estate plan,” says a common question is “When should I review my documents?”

Every few years is the quick answer, but a change in your life may also necessitate a review. Major life events can be related to a marriage, divorce, or death in the family; a substantial change in estate size; a move to another state and/or acquisition of property in another state; the death of an executor, trustee or guardian; the birth or adoption of children or grandchildren; retirement; and a significant change in health, to name just a handful.

When you conduct your review, consider these questions:

  • Does anyone in your family have special needs?
  • Do you have any children from a previous marriage?
  • Is your choice of executor, guardian, or trustee still okay?
  • Do you have a valid living will, durable power of attorney for health care, or a do-not-resuscitate to manage your health care, if you’re not able to do so?
  • Do you need to plan for Medicaid?
  • Are your beneficiary designations up to date on your retirement plans, annuities, payable-on-death bank accounts and life insurance?
  • Do you have charitable intentions and if so, are they mentioned in your documents?
  • Do you own sufficient life insurance?

In addition, review your digital presence and take the necessary efforts to protect your online information, after your death or if you’re no longer able to act.

It may take a little time, effort, and money to review your documents, but doing so helps ensure your intentions are properly executed. Your planning will help to protect your family during a difficult time.

If you feel your estate plan is in need of a review, we invite you to request a consultation with one of our experienced estate planning attorneys.


Reference: WMUR (January 24, 2019) “Money Matters: Reviewing your estate plan”

Incapacity Management: Do I Have All The Right Documents?

If you’re in a tragic accident that leaves you in a coma, there will be financial decisions that will need to be made. If you don’t plan ahead for incapacity, a family member will have to hire an attorney and ask a judge to grant a Power of Attorney that will permit her to act on your behalf. That could be an expensive and time-consuming task.

AL.com’s recent article, “If You Don’t Have This, You Need It” says that a better solution is to be proactive and have your attorney create a Power of Attorney before you need one. Let’s look at the different types of POAs.

  • Springing Power of Attorney. This only becomes effective under certain conditions, typically incapacity. A big disadvantage of this POA, is that when someone tries to use it on your behalf, they may be required to “prove” that you are actually incompetent, creating inconvenience and delays.
  • General Power of Attorney. This document is one in which you give your attorney-in-fact the authority to act on your behalf at any time. However, if you become incapacitated, this document is null and void.
  • General and Durable Power of Attorney. This document lets your attorney-in-fact continue acting on your behalf, if you become incapacitated.
  • Limited Power of Attorney. Here, you appoint someone to act on your behalf, only under certain conditions, such as only when you’re out of the country.

Consider your own situation. Which Power of Attorney is most appropriate for you during times of incapacity? Our experienced estate planning attorneys help make this decision more accurate and easier. You will then decide whom you’d appoint as your attorney-in-fact. If you’re married, a natural choice is your spouse. However, you should also have at least one successor attorney-in-fact.

Consult with our estate planning attorneys to be sure the document conforms to state law. We can help you decide which Power of Attorney type is best for your situation.

Advance Directive for Healthcare. This document describes your wishes on end-of-life care. These documents aren’t legally binding agreements, but it’s seldom that their instructions aren’t followed and accepted by healthcare professionals. Talk to our attorneys, because they do vary by state. They’re typically, divided into two parts:

  • Living Will. In this, you’ll give detailed instructions on the level of care, should you become incompetent and facing a potential end-of-life situation. This should talk about whether you’d want to stay on life-support, remain on a feeding tube, or if you’d want hydration or pain medicines administered or withheld, should you ever be in a vegetative state. It’s far better for you to make these calls, instead of leaving it to a physician or a family member.
  • Healthcare Proxy. With this document, you appoint the individual you’d want to speak on your behalf concerning healthcare decisions. As an alternative, you can state that you’re requesting your Living Will instructions be strictly followed, and you explicitly indicate you don’t want someone to speak on your behalf.

Reference: AL.com (October 26, 2018) “If You Don’t Have This, You Need It”

Preparing for the Inevitable: End of Life Decisions

“Are you ready for the end of life? Many of us can resolutely answer “no.” I am not implying preparation for life after death, salvation or eternal darkness—I simply mean forethought in the medical care that you wish to receive in a life-threatening illness or injury.”

When most people think of preparing for the end of their lives, it’s accompanied by an image of an elderly person surrounded by loved ones. Not everyone is lucky enough to have what we call a “good death.” …

You Can Avoid Elder Financial Abuse, But How?

“While a longer life is a good thing, it will also present challenges – and unfortunately, sometimes financial predators.”

The prospect of a long, healthy and active life is a wonderful thing to consider. However, one in 10 seniors have suffered financial abuse, according to The Kansas City Star’s article “Five ways to avoid elder financial abuse.” The grandson of Brooke Astor spoke at a conference about how his grandmother’s last years were spent living in squalor, as a result of her son and guardian stealing from the estate and cutting the amount of money available for her care. The grandson and his brother sued their father to protect their beloved grandmother, a leading philanthropist and one of New York’s high-profile society figures.

If It’s Not on Paper, Your Wishes Won’t Come True

Do not buy into the myth that estate planning is only relevant for wealthy individuals who need tax planning. A comprehensive estate plan is an easy way to make sure your wishes are followed should you become incapacitated, and upon your death.

One of an estate planning attorney’s main responsibilities is ensuring that clients understand the importance of addressing these matters before they become an issue, reports the New Jersey Herald in the article “The importance of putting plans in writing.”

Who Would You Trust with Your Life? Health Care Power of Attorney

Selecting someone to make health care decisions for you when you are unable, requires a great deal of trust and is considered by many to be the most important estate planning tool, according to The Daily News in “Choose Health Care Power of Attorney Carefully.”  The Durable Health Care Power of Attorney—HCPOA—is similar to the general POA in that both can be used to provide your representative with either very broad or very limited acting authority.  However, they are also very different. The HCPOA can be drafted to retain its effectiveness, while you are alive and after you pass away. …

Facing the Worst News and Preparing for the Inevitable

“A bad medical diagnosis can make a person realize that he suddenly has far less time to get his affairs in order. What’s the best way to leave assets to your heirs? Should you pay off your mortgage?”

Receiving a terrifying medical diagnosis of a fatal illness, can leave you and your loved ones stunned and afraid. Once the initial shock has subsided and you have put the emotional and medical resources in place, it will be necessary to address the legal aspects, according to a recent article from CNBC titled “When end-of-life planning is suddenly a lot closer than you thought.”

Scroll to Top