Varian Law LLC

Do Not Skip These Estate Planning Documents

What estate planning documents do you need in your lifetime?

When it comes to estate planning, people often focus on what is needed when you pass away. However, there are some key documents you do not want to go without in your lifetime, according to nwi.com in “Estate Planning: 3 important estate planning docs, and 2 maybes.” A key focus of the article is that everyone should have a POA, a Will, and an Advanced Medical Directive (including a Living Will).

How many times have you heard the story about someone’s aging mom becoming disabled and financial institutions asking if she has a POA? The problem is we are so reluctant to ask mom about a POA that we tend to neglect this difficult conversation. Then, when we are faced with an emergency, it is too late.    

An Advance Directive and Living Will are equally important to have in advance of a medical emergency. Among other things, with these documents in place to provide instructions for when you are terminally ill, you will have had the opportunity to state your wishes regarding medical care in advance.

The third must-have estate planning document is a Will.  Simply stated, the Will is the document where you tell your heirs exactly how you want your assets distributed.  If you have children who are not yet of legal age, you should also name a Guardian for them in your Will.

Another important estate planning document is a Trust. There are many different types of Trusts, and they all serve different purposes and achieve different goals.  Among other things, Trusts are used to protect assets.  An experienced estate planning attorney would be able to advise you on whether you should have a Trust.  Trusts are complex, and you will want to get one that best fits your needs.

Another document is called a “letter of instruction.” This is a set of directions that you leave to your family that tells them what you would like to happen. It is not legally binding, so it falls into the “maybe” document category. However, you may find it satisfying to put down on paper what you would like them to know, what you would like them to remember, etc.  If you want to dictate your funeral, memorial services and the like, work with an estate planning attorney to execute a funeral planning declaration, which can be legally enforced.

An experienced estate planning attorney can advise you in creating an estate plan that fits your unique circumstances and is specific to the laws of your state of residence.

Reference: nwi.com (Nov. 25, 2018) “Estate Planning: 3 important estate planning docs, and 2 maybes”

Preparing to Care for Your Parents Can Be Difficult

Life starts out with your parents taking care of you, but that scenario changes later in life and you often end up caring for your parents. Sometimes preparing for that situation is easy, but not always, according to Connecticut Magazine in “Senior Caregiving 101.”

The very idea of being in charge of the people who taught you how to tie your shoes and drive a car can be emotional, and many people put off having the talk about caregiving until an emergency presents itself -- and that is not a good plan.  Most of us in our 40s, 50s, and 60s will, at some point, need to be involved in taking care of a parent, including their finances, living arrangements, legal issues and medical care.

Where should you start? Take it one step at a time.

Begin with a conversation about these issues, long before anyone is sick. Getting started while in a crisis will lead to increased anxiety and sometimes outright panic.

If you are worried that your parents or siblings will think you are after their money, think again. How you approach these topics will make the difference. Once a caregiving plan, and legal and financial matters are addressed, you will all feel more comfortable. Start with a simple thought: “I/We want to make sure that your wishes are respected.”

Is there a lot of paperwork? Yes and no. By preparing in advance, you avoid digging through a scavenger hunt for insurance policies and bills and legal documents. Important legal documents include Wills, Powers of Attorney and Advance Directives.  By preparing ahead of time, you will already know where the legal documents are, and you will be free to focus on other important things, such as taking care of and spending time with your aging parents.

It would be a very good idea to meet with an estate planning (elder law) attorney to address your specific circumstances.

Reference: Connecticut Magazine (Nov. 23, 2018) “Senior Caregiving 101”

Decedent’s Estate Held Not Bound By Arbitration Agreement

The Alabama Supreme Court has ruled that the daughter of a deceased dementia patient does not have to submit to binding arbitration with a nursing and rehabilitation center because she did not have the authority to sign the agreement, according to Legal NewsLine in “Alabama Supreme Court: Daughter in wrongful death case didn’t have authority to sign arbitration agreement,”

The woman, Rhonda Stephan, signed an arbitration agreement when her father was admitted to a nursing home (the Millennium Nursing and Rehab center). This is something that many family members do since it is part of many nursing home’s admissions requirements.  However, the Supreme Court said that the woman did not have the power or authority to do so because she signed as a family member and not as a Power of Attorney.  Because of this, when the woman became the personal representative of her father’s estate, she was not bound by the arbitration clause.

By way of background, Stephan, on behalf of her father’s estate, sued the Millennium Nursing and Rehab center for wrongful death following her father’s death in 2015. The facility moved for the enforcement of the arbitration agreement and the Madison Circuit Court agreed when it granted Millennium’s motion to compel arbitration.  Subsequently, the State Supreme Court found that Stephan’s father had been too incapacitated to enter into any legally binding contract when he was admitted, and that Stephan had signed the agreement as a family member, not as a power of attorney.

This case presents an interesting legal issue - if a family member has power of attorney, which is frequently the case, and they sign all the admission papers to have their family member admitted to a care facility, in what capacity are they signing those papers?

If you are serving as someone’s power of attorney, you should consult with an experienced estate planning attorney regarding the responsibilities and liabilities of your role.

Reference: Legal NewsLine (Oct. 30, 2018) “Alabama Supreme Court: Daughter in wrongful death case didn’t have authority to sign arbitration agreement”

You Should Keep Your Estate Plan Current

When implementing an estate plan, make sure your estate planning attorney knows what is actually going on in your life, according to the Citizen Times in “Expert advice: 6 financial decisions to make now for your future.”  Here are some key points to consider:

Estate Planning. Estate Plans should be reviewed whenever you have had a significant change of circumstances in your life, which usually is about every 5 years or so.  A skilled estate planning attorney will ask you many delicate questions in order to make sure your plan is implemented properly.

How is your Health? It does not matter if you are as healthy as a horse, you still need to have a health care power of attorney because you never know when you might become incapacitated.  It could be an accident, an allergic response to a vaccination or a diabetic emergency. We cannot prevent emergencies, but we can prepare for them.  A living will, or advance directive, tells doctors and relatives more detailed information about how you want specific situations addressed.  For example, do you want a “DNR” or “do not resuscitate” order?

Splitting Up? Don’t Miss These Details. A clear picture of your financial status will be helpful for updating your estate plan. You should not wait until your divorce is final to do that! One of the first things an estate planning attorney will ask a divorcing client is whether their power of attorney has been updated recently?  Couples who have separated but not yet finalized their divorces often fail to change their estate plans.  

It is highly likely that your life will change as your life progresses, and so should your estate plan.

An experienced estate planning attorney can advise you on creating, and keeping up to date with, an estate plan that fits your unique circumstances.

Reference: Citizen Times (Oct. 8, 2018) “Expert advice: 6 financial decisions to make now for your future”

A Power of Attorney is Critical for Seniors

What many people do not realize is that perfectly healthy people can use a power of attorney document to give others the legal authority to take care of their financial matters, so they can do other things.

Many people think of a power of attorney document as something you set up in case something life-changing happens, such as, you are in a catastrophic car accident and cannot manage your own finances for a while. What many people do not realize, is that perfectly healthy people can use a power of attorney document to give others the legal authority to take care of their financial matters, so they can do other things.

Let’s say you found your dream house, but the sellers insist on a closing date right in the middle of your vacation. Before you cancel your cruise, have your lawyer write a limited power of attorney and designate someone to attend the real estate closing and sign the documents on your behalf. Just make sure you trust the person, and that you bring them back a souvenir.

You can also get a financial power of attorney for more than one transaction. For example, you signed on to serve for two years as a 50+ volunteer with the Peace Corps. You can name someone to collect your income, pay your bills, open your mail and manage your investments, while you are overseas. You can authorize the person to enter into contracts, rent out your house while you are away, handle insurance issues and move money around in your bank accounts, in case you are in a remote location with no reliable internet for online banking.

Durable Power of Attorney

The most common reason for people to set up a durable financial power of attorney is in case they are incapable of managing their money matters one day, due to an illness like Alzheimer’s disease, or a debilitating injury. The person named to take actions (the agent) on behalf of the incapacitated person (the principal) seldom reads the fine print in the document. The designated agent (usually a close relative) takes a copy to the bank and the nursing home to show that they have the authority to pay the person’s bills.

What the agent might not know is that (depending on the wording in the power of attorney instrument) she can also collect debts on behalf of the principal, and apply for public benefits for him, like veterans benefits and Medicaid. She can file his taxes, manage his property, buy or sell stocks and bonds and run his business, according to his instructions.

If the document authorizes it, he can buy and sell real property, personal property, digital property and intellectual property, and make gifts to individuals and charitable organizations. He can even designate someone to serve as the agent in her place.

To make sure that your power of attorney instrument is set up to control as many things as you want, be sure to talk with an estate planning attorney in your area.

References:

Aging Care. “Things You Can and Can’t Do with Power of Attorney.” (accessed August 15, 2018) https://www.agingcare.com/articles/things-you-can-and-cant-do-with-poa-152673.htm

American Bar Association. “Pick the Right Power of Attorney Instrument.” (accessed August 15, 2018) https://www.americanbar.org/publications/voice_of_experience/2017/march-2017/pick-the-right-power-of-attorney-instrument.html

What Happens When an Elderly Person Becomes Incapacitated?

 “An elder law attorney can help you protect yourself and your loved ones from having to settle for a court-appointed guardian.”

When an older adult loses the ability to take care of himself, make or communicate decisions, or handle their financial matters, someone needs to step in and help him, so that they do not suffer neglect or abuse.  What happens when an elderly person becomes incapacitated will depend on whether he has family to help, or has made the legal arrangements for someone to manage his care.  When a senior does not have any family members nearby who are able or willing to help, sometimes the courts have to get involved.

The Problem with Court-Appointed Guardians

Many court-appointed guardians are dedicated professionals who carry out their duties honorably, but some perpetrate what advocates for the elderly call “elder abuse” of epidemic proportions. Depending on the actual wording of the court order, a guardian can have relatively unfettered control over the life savings and home of the senior. If the elderly person raises suspicions of mismanagement of her funds, people usually disregard the concerns because of her diminished cognitive abilities.

There is little oversight of guardians. Even if they file accountings with the court, those documents are rarely verified for accuracy or truthfulness. The so-called accounting could be a work of fiction. A guardian can sell a person’s home, tap into the bank account and no one will ever know. When the senior who has no close family dies, an unscrupulous guardian can keep assets illegally appropriated, and no one will question the actions taken.

In addition to better oversight, elder-care experts advocate for stricter requirements for people seeking to serve as guardians.  There is no comprehensive database that maintains information about guardians, so tracking the “bad apples” is not possible.

Guardians are supposed to manage a person’s care, finances and even medical care, depending on the terms of the court order. Some states have reported guardian-to-ward ratios of 1-to-40. In one abuse case, a guardian had about 400 wards. Imagine the public outrage if one person was trying to raise 40 children, much less 400 – yet there is little societal concern about our vulnerable elderly, who are depending on the very people who end up taking their money.

How to Protect Yourself and Your Loved Ones from Unscrupulous Guardians

Make the necessary legal arrangements now, before you (or a loved one) become incapacitated, so you will not be left with a court-appointed guardian, who is a total stranger. Prepare a durable power of attorney to appoint someone to act as your representative and make decisions about your care and financial matters if you are ever unable to do so. While you are at it, execute a medical power of attorney and appoint someone to make medical decisions for you if you cannot do so.

Give your doctor and bank these documents so they can raise any objections while you are able to make changes. Some financial institutions want you to use their forms. Regardless what your state law says, some banks will object to a power of attorney that is more than a few years old, so redo the documents every few years to cover yourself.

An experienced elder law attorney can help you protect yourself and your loved ones from having to settle for a court-appointed total stranger as guardian.  Your state laws might be different from the general law in this article, so be sure to talk with an elder law attorney in your area.

References:

Huffpost. “The System of Court-Appointed Guardians Continues to Fail the Elderly.” (accessed July 19, 2018) https://www.huffingtonpost.com/entry/court-appointed-guardian-system-failing-elderly_us_59d3f70be4b06226e3f44d4e

Estate Planning Is Not Just For the Old and the Wealthy

If you are young, or you do not have many assets, you still need an Estate Plan.

Estate planning is about more than just death and taxes, according to the Times Herald-Record in "Everyone can benefit from an estate plan."

Almost all estate plans today include some legal documents that are traditionally considered “elder law” documents. Despite the term "elder law," even young people need these documents because they are more about planning for disability than they are about planning for death.  That is planning for the possibility that you could have an accident or illness that does not kill you; however, it can leave you legally incapacitated, even if it is only on a temporary basis. These documents include a health care power of attorney so someone else has the authority to make health care decisions on your behalf if you are unable to do so.  It also includes a general durable power of attorney so someone else can handle your finances if you are unable to do so.

Of course, there are numerous other estate planning issues that could arise for people of any age or economic status.

An experienced estate planning attorney can advise you on creating an estate plan that fits your unique circumstances.

Reference: Times Herald-Record (May 17, 2018) "Everyone can benefit from an estate plan."

Planning for Incapacity is an Essential Part of Estate Planning

You cannot prevent being incapacitated; however, you can make plans just in case it should occur.

There are no age requirements for disabling accidents or illnesses, so it would be wise for everyone to plan for what would happen if they were to become incapacitated, according to TC Palm in "Be as prepared as you can by planning for incapacity."

To get started, schedule an appointment with an estate planning attorney. The attorney can prepare the necessary documents for incapacity.  Among other things, you may need a general durable power of attorney so someone else has the authority to handle your day-to-day finances, a health care power of attorney that will allow someone else to make your health care decisions, and a living will that will let you decide ahead of time what medical means can be taken to prolong your life.

An experienced estate planning attorney can advise you on creating an estate plan that fits your unique circumstances, which could include preparing for a future disability or incapacity.

Reference: TC Palm (Feb. 20, 2018) "Be as prepared as you can by planning for incapacity."

Everyone in New Jersey Needs Basic Estate Planning Documents

Several basic estate planning documents will go a long way toward protecting you, your assets and your family.

While many people are concerned an estate plan has to be complicated, many people only need a few basic documents properly prepared by an estate planning attorney, according to the Brooklyn Daily Eagle in "Five legal documents you need by 55."

Among these basic estate planning documents are:

• A general durable power of attorney is a document that will allow you to designate someone to take care of your financial matters if you are unable to do so. The person you choose will be able to make sure your bills are paid, any business you have is handled appropriately and that your assets are protected and preserved.  A general durable power of attorney can also prevent the significant costs associated with guardianship proceedings if you were to become unable to manage your own affairs in the future.
• A health care power of attorney is also needed so that someone you designate can talk to your doctors and make medical decisions on your behalf if you are incapacitated. This powerful document also avoids the significant costs associated with guardianship proceedings.
• A living will is another necessary document that allows you to decide what will happen if you are terminally ill and unable to make your own health care decisions. This very important documents grants someone you choose the power to terminate life sustaining treatment under the circumstances allowed by law and protects your right to self-determination.
• A Will, of course, is also necessary so you can make sure your assets are distributed as you want after you pass away. A properly drafted Will can also appoint guardians for your minor children, create protective trusts for the benefit of your heirs, and reduce administrative costs.

              An experienced estate planning attorney can help you prepare the necessary documents that you will need to protect yourself and your family.

Reference: Brooklyn Daily Eagle (Feb. 6, 2018) "Five legal documents you need by 55."

Estate Planning in New Jersey Does Not Have to Be Complicated

Once you take the initial steps, estate planning often becomes an easy process.

You may only need a few essential documents to get your estate plan underway, but many people often delay because of the concern of complications, according to Forbes in "More Than Half of Americans Don't Have These Essential Estate Documents, Do You?"

A validly drafted general durable power of attorney can prevent the significant costs associated with guardianship proceedings if you were to become unable to manage your own affairs in the future.  And an Advance Directive (which includes a "Living Will") that is prepared in accordance with New Jersey law can help carry out your wishes with respect to the termination of medical treatment and, like a power of attorney, can also prevent significant costs in the event that you become unable to make your own medical decisions in the future.

In addition to those two basic documents, you would most likely need a Will and some form of Trust.  Both Wills and Trusts can vary tremendously in their complexity and purpose.

An experienced New Jersey estate planning attorney can advise you on creating an estate plan that meets your unique circumstances, which may include the creation of a Will and Trusts.

Reference: Forbes (Jan. 26, 2018) "More Than Half of Americans Don't Have These Essential Estate Documents, Do You?"