What Legal Documents Should You Have?

You might think that the coronavirus pandemic has caused everyone to get their estate planning documents in order, but the 20th annual Transamerica Retirement Survey of Retirees found that 30% of all retirees have nothing prepared—not even a will. That’s not good, for them or their families, says this timely article 6 Legal Documents Retirees Need—but Don’t Have from MoneyTalksNews.

The survey revealed some troubling facts:

Only 32% have a Health Care Power Of Attorney or Medical Proxy, which allows named persons to make medical decisions on the retiree’s behalf.

Only 30% have an Advance Directive or Living Will, sharing their end-of-life wishes for medical care.

A mere 28% have a designated Power of Attorney, so an agent can act on their behalf to pay bills and manage finances, if they are too sick to do so.

Worse, only 19% have written funeral and burial arrangements. Their families will be left to make all the decisions.

18% have a Health Insurance Portability and Accountability Act (HIPAA) waiver, which is needed so someone else may speak with health care and insurance providers on their behalf.

11% have a Trust of any kind.

The study shines a bright light on a big problem that will be faced by families, if their elders have not taken steps to prepare for incapacity or death. Ignoring the problem does not make it go away. It becomes more complicated, expensive and stressful for the loved ones left behind.

These documents and a last will and testament are needed, so families have the legal right to take care of their loved ones while they are living, as well as handle their estates after they pass.

Without them, the family may find themselves having to go to court to have a guardian appointed in the event their senior loved ones are too ill to manage their financial affairs.

If the loved one should die and there is no will in place, the court will rely on the state’s estate laws to determine who inherits assets. An estranged family member could end up owning the family home and all of its contents, regardless of their absence from the family.

An experienced estate planning attorney can work with the family in a safe, socially distanced manner to have the necessary documents created, before they are needed.

Reference: MoneyTalksNews (Dec. 16, 2020) 6 Legal Documents Retirees Need—but Don’t Have

Caring for a Loved One from a Distance

Trying to coordinate care from a distance becomes a challenge for many, especially since as many as 80% of caregivers are working. Add COVID-19 into the mix, and the situation becomes even more difficult, reports the article “When your parent is far away and you are trying to care for them” from the Pittsburgh Post-Gazette.

The starting point is to have the person you are caring for give you legal authorization to act on their behalf with a Power of Attorney for financial affairs and a Health Care Directive that gives you authority to receive health information under HIPAA (Health Insurance Portability and Accountability Act). It is HIPAA that addresses the use, disclosure and protection of sensitive patient information.

Next, have a conversation about their finances. Find out where all of their important documents are, including insurance policies (long-term care, health, life, auto, home), Social Security and Medicare cards. You’ll want to know where their tax documents are, which will provide you with information on retirement accounts, bank accounts and investments.

Gather up family documents, including birth, death, and marriage certificates. Make sure your loved one has completed their estate planning, including a last will and testament.

Put all of this information into a binder, so you have access to it easily.

Because you are far from your loved one, you may want to set up a care plan. What kind of care do they have in place right now, and what do you anticipate they may need in the near future? There should also be a contingency plan for emergencies, which seem to occur when they are least expected.

Find a geriatric care manager or a social worker who can do a needs assessment and help coordinate services, including shopping for groceries, medication administration and help with basic activities of daily living, including bathing, toileting, getting in and out of bed, eating and dressing.

If possible, develop a list of neighbors, friends or fellow worshippers who might create a local support system. If you are not able to visit with any degree of frequency, find a way to see your loved ones on a regular basis through video calls. It is impossible to accurately assess a person’s well-being, without being able to see them. In the past, dramatic changes weren’t revealed until family members made a trip. Today, you’ll be able to see your loved one using technology.

You may need to purchase a smartphone or a tablet, but it will be worth the investment. A medical alert system will provide further peace of mind for all concerned. Regular conference calls with caregivers and your loved one will keep everyone in touch.

Caring from a distance is difficult, but a well-thought out plan and preparing for all situations will make your loved one safer.

For more information about this or other topics, click here.

Reference: Pittsburgh Post-Gazette (Sep. 28, 2020) “When your parent is far away and you are trying to care for them”

 

Estate Planning Is For Everyone

Estate planning is something anyone who is 18 years old or older needs to think about, advises the article “Estate planning for every stage of life from the Independent Record. Estate planning includes much more than a person’s last will and testament. It protects you from incapacity, provides the legal right to allow others to talk to your doctors if you can’t and takes care of your minor children, if an unexpected tragedy occurs. Let’s look at all the ages and stages where estate planning is needed.

Parents of young adults should discuss estate planning with their children. While parents devote decades to helping their children become independent adults, sometimes life doesn’t go the way you expect. A college freshman is more concerned with acing a class, joining a club and the most recent trend on social media. However, a parent needs to think about what happens when the child is over 18 and has a medical emergency. Parents have no legal rights to medical information, medical decision making or finances, once a child becomes a legal adult. Hospitals may not release private information and doctors can’t talk with parents, even in an extreme situation. Young adults need to have a HIPAA release, a durable power of medical attorney and a power of attorney for their finances created.

New parents also need estate planning. While it may be hard to consider while adjusting to having a new baby in the house, what would happen to that baby if something unexpected were to affect both parents? The estate planning attorney will create a last will and testament, which is used to name a guardian for any minor children, in case both parents pass. This also includes decisions that need to be made about the child’s education, medical treatment and even their social life. You’ll need to name someone to be the child’s guardian, and to be sure that they will raise your child the same way that you would.

An estate plan includes naming a conservator, who is a person with control over a minor child’s finances. You’ll want to name a responsible person who is trustworthy and good with handling money. It is possible to name the same person as guardian and conservator. However, it may be wise to separate the responsibilities.

An estate plan also ensures that your children receive their inheritance, when you think they will be responsible enough to handle it. If a minor child’s parents die and there is no estate plan, the parent’s assets will be held by the court for the benefit of the child. Once the child turns 18, he or she will receive the entire amount in one lump sum. Few who are 18-years old are able to manage large sums of money. Estate planning helps you control how the money is distributed. This is also something to consider, when your children are the beneficiaries of any life insurance policies. An estate planning attorney can help you set up trusts, so the monies are distributed at the right time.

When people enter their ‘golden’ years—that is, they are almost retired—it is the time for estate plans to be reviewed. You may wish to name your children as power of attorney and medical power of attorney, rather than a sibling. It’s best to have people who will be younger than you for these roles as you age. This may also be the time to change how your wealth is distributed. Are your children old enough to be responsible with an inheritance? Do you want to create a legacy plan that includes charitable giving?

Lastly, update your estate plan any time there are changes in the family structure. Divorce, death, marriage or individuals with special needs all require a different approach to the basic estate plan. It’s a good idea to revisit an estate plan anytime there have been major changes in your relationships, to the law, or changes to your financial status.

Reference: Independent Record (March 1, 2020) “Estate planning for every stage of life

Living Together Isn’t as Simple as You Think

One reason for the popularity of living together without marriage, is that many in this generation have experienced one or more difficult divorces, so they’re not always willing to remarry, says Next Avenue in the article “The Legal Dangers of Living Together.” However, like many aspects of estate planning, what seems like a simple solution can become quite complex. Unmarried couples can face a variety of problematic and emotionally challenging issues, because estate planning laws are written to favor married couples.

Consider what happens when an unmarried couple does not plan for the possibility of one partner losing the ability to manage his or her health care because of a serious health issue.

If a spouse is rushed to the hospital unconscious and there is no health care power of attorney giving the other spouse the right to make medical decisions on his or her behalf, a husband or wife will likely be permitted to make them anyway.

However, an unmarried couple will not have any right to make medical decisions on behalf of their partner. The hospital is not likely to bend the rules, because if a blood relative of the person challenged the medical facility’s decision, they are wide open to liability issues.

Money is also a problem in the absence of marriage. If one partner becomes incapacitated and estate planning has not been done, without both partners having power of attorney, an illness could upend their life together. If one partner became incapacitated, bank accounts will be frozen, and the well partner will have no right to access any assets. A court action might be required, but what if a family member objects?

Without appropriate advance planning, courts are generally forced to rely on blood kin to take both financial and medical decision-making roles. An unmarried partner would have no rights. If the home was owned by the ill partner, the unmarried partner may find themselves having to find new housing. If the well partner depended upon the ill partner for their support, then they will have also lost their financial security.

Unmarried couples need to execute key estate planning documents, while both are healthy and competent. These documents include a durable power of attorney, a medical power of attorney and a living will, which applies to end of life decisions. A living trust could be used to avoid the problem of finances for the well partner.

Another document needed for unmarried couples: a HIPAA release. HIPAA is a federal health privacy law that prevents medical facilities and health care professionals from sharing a patient’s medical information with anyone not designated on the person’s HIPAA release form. Unmarried couples should ask an estate planning attorney for these forms to be sure they are the most current.

If one of the partners dies, and if there is no will, the estate is known as intestate. Assets are distributed according to the laws of the state, and there is no legal recognition of an unmarried partner. They won’t be legally entitled to inherit any of the assets.

If a married partner dies without a will in a community property state, the surviving spouse is automatically entitled to inherit as much as half the value of the deceased assets.

Beneficiary designations usually control the distribution of assets including life insurance policies, retirement accounts and employer-sponsored group life insurance policies. If the partners have not named each other as beneficiary designations, then the surviving partner will be left with nothing.

The lesson for couples hoping to avoid any legal complications by not getting married, is that they may be creating far more problems than are solved as they age together. An experienced estate planning attorney will be able to make sure that all the correct planning is in place to protect both partners, even without the benefit of marriage.

Reference: Next Avenue (Aug. 28, 2019) “The Legal Dangers of Living Together.”

Singles Need Two Key Documents, No Matter How Young

 

A woman is shopping, when suddenly she is struck by abdominal pains that are so severe she passes out in the store. When she comes to, an EMT is asking her questions. One of those questions is “Do you have a living will or a medical power of attorney?” That was a wake-up call for her and should be for other singles also, says Morningstar in the article “2 Estate-Planning Tools That Singles Should Consider.”

People who don’t have children or a married spouse, often think they don’t need any kind of estate plan. However, the truth is, they do. For singles, power of attorney, medical power of attorney and a living will are especially important.

What is a Living Will? A living will is sometimes called an advance medical directive. It details your wishes, if you are in a situation where life-sustaining treatment is the only way to keep you alive. Would you want to remain on a respirator, have a feeding tube or have other extreme measures used? It’s not pleasant to think about. However, this is an opportunity for you to make this decision on your own behalf, for a possible future date when you won’t be able to convey your wishes. Some people want to stay alive, no matter what. Others would prefer to turn off any artificial means of life support.

This spares your loved ones from having to guess about what you might like to have happen.

What is a Durable Power of Attorney for Healthcare? This is a legal document that gives a person you name the ability to make decisions about healthcare for you, if you can’t. To some people, this matters more than a living will, because the durable power of attorney for healthcare can convey your wishes in situations, where you are not terminally ill, but incapacitated.

Find someone you trust, whose judgment you respect and have a long, serious talk with them. Talk about your preferences for blood transfusions, organ transplants, disclosure about your medical records and more. Doctors have a hard time when a group of relatives and friends are all trying to help, if there is no one person who has been named as your power of attorney for healthcare.

What else does a single person need? The documents listed above are just part of an estate plan, not the whole thing. A single person should have a will, so that they can determine who they want to receive their assets upon death. They should also check on their beneficiary designations from time to time, so any insurance policies, investment accounts, retirement accounts, and any other assets that allow beneficiary designations are going to the correct person. Some accounts also do not permit non-spouses as beneficiaries. As unfair as this is, it does exist.

The takeaway here is that to protect yourself in a health care emergency situation, you should have these documents in place. Speak with an experienced estate planning attorney. This is not a complicated matter, but it is an important one.

Reference: Morningstar (April 23, 2019) “2 Estate-Planning Tools That Singles Should Consider”

Plan Before a Health Crisis Strikes

A woman wakes up to hear her husband gasping for breath, unresponsive and in full cardiac arrest. He was only 55, he biked 25 to 50 miles every day, he ate right and was one of the healthiest people she knew. Yet, he was having a heart attack. He did not have a health care directive in place, and she did not know what his wishes were in the case of a health crisis.

The story, as related in “START WITH A PLAN (not a heart attack)” from OakPark.com, is not as unusual as one would think. What does make it unusual, was that both of these individuals are attorneys. They had never had an estate plan created or drafted documents.

As the woman sat by his hospital bed in the critical care unit after his surgery, she started thinking about the practical realities. If he remained unconscious for some time, how would she access his individual finances, his paycheck or pay the monthly bills? She would need to hire an attorney and seek guardianship from the court to handle his financial affairs. If he died, she’d have to hire an attorney and open a probate case.

Without a will in place, her husband’s estate would be deemed intestate, and the laws of the state, in her case, Illinois, would be applied to distribute his property. Half of his property would be distributed to his children and the other half to her.

That might mean she would have to borrow money from her own children to pay bills and cover their college tuition.

Her husband responded well to the surgery, but at one point he needed to be transferred to another hospital. As they travelled by ambulance to another hospital, a terrible thought occurred to her: what if the ambulance were in an accident and they were both killed? Who would rear their children? How long would it take to settle the estate, with no will?

Thankfully, the ambulance arrived safely at the hospital, her husband recovered from his heart attack and the first thing they attended to when he recovered was their estate plan.

It’s a dramatic story, but a telling one: everyone, no matter how healthy, needs to have an estate plan in place. That means a will, power of attorney, healthcare proxy, HIPAA release form and any other planning tools that each family’s situation may need.

Make an appointment to meet with an estate planning attorney to put your plan in place. Don’t wait until you have time, because you never know when you may run out of time or when a health crisis may strike.

Reference: Oak Park.com (Feb. 27, 2019) “START WITH A PLAN (not a heart attack)”

Photo Credit: 123rf.com-42402908

Kids Grown Up? Protect Them with These Three Documents
Protect your family with these three documents.

Kids Grown Up? Protect Them with These Three Documents

Without the right documents in place, you do not have the legal right to protect your own children, once they turn 18, says The National Law Review in an unsettling but must-read article titled “Three Critical Legal Documents Every Parent Should Get in Place Now to Safeguard Their Adult Children.”

There are only three documents and they are fairly straightforward. There is no reason not to have them in place. If your adult child was incapacitated by an accident or an illness, you would want to speak with the medical staff to find out how they are and what decisions need to be made. Whether you were making a phone call or arriving at the hospital, a nurse or doctor would not be permitted to speak with you about your own adult child’s condition or be involved with making any medical decisions.

It sounds unreasonable, and perhaps it is, but that is the law. There are steps you can take to ensure that you are not in this situation.

HIPAA Authorization Form gives you the authority to speak with healthcare providers. This is a federal law (Health Insurance Portability and Accountability Act of 1996) that safeguards who can access an adult’s private health data. HIPAA prevents healthcare providers from revealing any information to you or anyone else about a patient’s status. The practitioners could face severe penalties for violating HIPAA.

This is why you want to have a HIPAA authorization signed by your adult child and naming you as an authorized recipient.  This will give you the ability to ask for and receive information about your child’s health status, progress and treatment. This is especially important, if your child is unconscious or in an unresponsive state. The alternative? Going to court. That’s not what you want to be doing during a health emergency.

A Healthcare Power of Attorney needs to be in place, so you can be named his or her “medical agent” and have the ability to view their medical records and make informed decisions on their behalf. Without this (or a court-appointed guardianship), healthcare decisions will be in the hands of healthcare providers only. That’s not a bad thing, if you implicitly trust your child’s doctor. However, if your child is incapacitated in an out-of-town hospital with healthcare providers you don’t know, you will want to be able to make decisions on his or her behalf.

Note that physicians prefer a single medical agent, not a handful. The concern is that if time is a critical factor and a group of family members do not agree on care, it may compromise the healthcare services that can be provided. You can name multiple agents in priority order. A mother might be listed as the medical agent, and if she is unable or unwilling to serve, the second person would be the father.

The third document is a General Power of Attorney. This would give you the right to make financial decisions on your child’s behalf, if they were to become incapacitated. You would have the legal right to manage bank accounts, pay bills, sign tax returns, apply for government benefits, break or apply a lease and conduct activities on behalf of your child. Without this document, you won’t be able to help your child without a court-appointed conservatorship.

Keep in mind that these documents need to be updated every few years. If you try to use an older document, the bank or hospital may not accept them. Your adult child also has the ability to revoke these documents at any time, just by saying they revoke them or by putting it in writing. If you have an adult child living out of state, you want to have these documents prepared for your home state and their state of residence.

Finally, this is not a time to download forms and hope for the best. An estate planning attorney will know more specifically what forms are used in your state and help you make sure that they are prepared correctly.

Reference: The National Law Review (Feb. 11, 2019) “Three Critical Legal Documents Every Parent Should Get in Place Now to Safeguard Their Adult Children”