How to Choose an Estate Planning Attorney

Estate planning is a critical part of financial planning, but it is something that many Americans prefer to procrastinate about. However, drafting a will, health care proxy, and power of attorney are too important to leave to chance, says Next Avenue in the article “How to Find a Good Estate Planner.” An experienced estate planning attorney can help prevent critical mistakes and help you adjust your plan as circumstances change.

Here are a few tips:

Look for an estate planning attorney. An attorney who practices real estate law is not going to be up on all of the latest changes to estate and tax laws.

Next, determine if the attorney deals with families who are in similar situations to yours. An attorney who works with family-owned businesses, for instances, will be more helpful in creating an estate plan that includes tax and succession planning.

Experience matters in this area of the law. The laws of your state are just one of the many parts that the attorney needs to know by heart. The estate planning attorney who has been practicing for many years, will have a better sense of how families work, what problems crop up and how to avoid them.

Ask about costs. Don’t be shy. You want to be clear from the start what you should expect to be spending on an estate plan. The attorney should be comfortable having this discussion with you and your spouse or family member. Remember that the attorney will be able to understand the scope of work, only after they speak with you about your situation. What may seem simple to you, may be more complicated than you think.

If a trust is added, the fees are likely to increase. A trust can be used to avoid or minimize estate taxes, avoid probate, save on time and court fees and create conditions for the distribution of assets after you die.

Don’t neglect to have the attorney create a Power of Attorney form and any other advance directives you need. These vary by state, and you don’t want them to get too old, or they may become out of date.

Recognize that this is an ongoing relationship. Make sure that you are comfortable with the attorney, how the practice is run and the people who work there—receptionist, paralegals and other associates at the firm are all people you may be working with at one point or another during the process. You will be sharing very personal information with the entire team, so be sure it’s a good fit.

This is also not a one-and-done event. Having an estate plan is a lot like having a home—it requires maintenance. Every four years or so, or when large events occur in your life, you’ll need to have your will reviewed.

Your estate planning attorney should become a trusted advisor who works hand in hand with your accountant and financial advisor. Together, they should all be looking out for you and your family.

Reference: Next Avenue (September 10, 2019) “How to Find a Good Estate Planner”

Three Different Kinds of Power of Attorney

Without a durable power of attorney, helping a family member or loved one who cannot act on their own becomes far more difficult and stressful. Powers of attorney, also known as POA, typically give the agent specific powers to conduct the person’s financial business, explains the Aiken Standard in the article “The durable power of attorney.”

There’s also a healthcare power of attorney, which gives the named person the authority to make medical decisions, usually when the person is not able to do so because of illness or injury.

There are three different powers of attorney: non-durable, springing and durable. A non-durable power of attorney becomes effective immediately upon execution by the person. It remains active until it is either terminated or revoked by the person themselves, the person becomes mentally incapacitated or if the person dies.

The durable power of attorney is in effect from the moment it is executed. It is not revoked if the person becomes incapacitated (hence the term “durable”), nor by the passage of time. The person can alter or terminate a durable power of attorney at any time before there is physical or mental incapacity, however, and it does end when the person dies.

Springing powers of attorney become effective at a future date. They “spring” into power, according to the terms of the document. That may be the occurrence of a particular event, like the person becoming incapacitated or disabled. They can be problematic, as there will be a need to prove that the person has become incapacitated and/or disabled.

The advantage of the durable power of attorney is that it remains in effect even after the person has become impaired. The agent has the ability to act right away. If time is of the essence (i.e., there is an emergency that requires quick action), there is no need to go to court to have the approval to act.

For many people, having a durable power of attorney for financial matters and another, separate document, for medical decisions, is the best way to go. Some states require that these two powers be embodied in two different documents. A local estate planning attorney will know what your state requirements are.

Power of attorney documents should be created and executed, along with a complete estate plan, long before an individual begins having problems in aspects of their lives. When they are signed, it is necessary for the person to have full mental capacity. They have to be able to be “of sound mind.” If they have been diagnosed with dementia or Alzheimer’s, it is necessary that all these documents be prepared as soon as possible. If they lack mental capacity, the will and all related documents are likely to be challenged.

Without a durable power of attorney, family and friends won’t be able to make important financial decisions, pay bills, make healthcare decisions and engage in any kind of Medicaid planning. Anyone who wanted to take on any of these responsibilities would have to go to court and be appointed the person’s guardian. It’s much easier to tackle these tasks in advance, so that the family can act on their loved one’s behalf in a timely and effective manner.

Reference: Aiken Standard (August 24, 2019) “The durable power of attorney”

Preparing for Alzheimer’s

Once there has been a diagnosis of dementia, there are a number of issues that families need to address, including legal issues. The best way to approach this task, says being patient in the article “Alzheimer’s and the Law” is to meet with an estate planning attorney who can guide the family in planning for the future, and creating the needed documents.

The conversation will start with who should be named to two different kinds of power of attorney. One is for the durable power of attorney, which will give the named person the ability to manage any business decisions, sign contracts and deal with insurance companies. This document will need to be inclusive, so the agent can act for the person who is going to be incapacitated.

Next, there will need to be a healthcare power of attorney. It should be complemented by a living will, which states what kind of lifesaving measures you would want, if you were to be declared terminally ill. The healthcare power of attorney also allows a person to be named to make medical decisions, if the person with dementia can no longer make good decisions on their own behalf.

As long as the doctor has not yet declared the person incapacitated, they can sign the power of attorney for financial and health care. If the person has been declared incapacitated, then the family will need to go to court for a guardianship proceeding, so the court can declare who will be in charge of the person with dementia.

Some families prefer to have one person in charge of the loved one’s financial affairs and a second person to be their healthcare power of attorney. If there is a family member who is good with money and business, that person will do a better job than someone whose heart is in the right place but doesn’t manage money well. A nervous or easily excitable family member may also not be the best choice for healthcare power of attorney, especially if important decisions need to be made in a crisis situation.

Make sure that the people who are being considered for these tasks live near enough, so they can be available when needed. A child who lives on the other side of the country may want to be the decision maker, but if they are too far away, it will create more problems than it solves.

Before naming anyone to the power of attorney roles, speak with them about the situation, and be clear about what they will be expected to do. Clarify the difference between the two roles, and that of the executor. The executor is the person who is in charge of the person’s estate after they pass. They do not have an active role, while the person is living.

People generally don’t like to think about times when they may not enjoy good health, but this is a situation where waiting to address the issue can become extremely costly. A skilled estate planning attorney who works with families with dementia will understand the situation. They can be a valuable resource of information about other related services that will become needed over time.

Reference: being patient (August 22, 2019) “Alzheimer’s and the Law”

Why Do I Need an Attorney to Help Me with Estate Planning?

Your estate plan can be simple or complicated. The New Hampshire Union Leader’s recent article, “Estate planning is important and may require help from a professional,” says that some strategies are definitely easier to implement—like having a will, for example. Others are more complex, like creating a trust. Whatever your needs, most strategies will probably necessitate that you hire a qualified estate planning attorney. Here are some situations that may require special planning attention:

  • Your estate is valued at more than the federal gift and/or estate tax applicable exclusion amount ($11.4 million per person in 2019);
  • You have minor children;
  • You have loved ones with special needs who depend on you;
  • You own a business;
  • You have property in more than one state;
  • You want to donate to charities;
  • You own valuable artwork or collectibles;
  • You have specific thoughts concerning health care; or
  • You desire privacy and want to avoid the probate process.

First, you need to understand your situation, and that includes factors like your age, health and wealth. Your thoughts about benefitting family members and taxes also need to be considered. You’ll want to have plans in place should you become incapacitated.

Next, think about your goals and objectives. Some common goals are:

  • Providing financial security for your family;
  • Preserving property for your heirs;
  • Avoiding disputes among family members or business partners;
  • Giving to a charity;
  • Managing your affairs, if you are disabled;
  • Having sufficient liquidity to pay the expenses of your estate; and
  • Transferring ownership of your property or business interests.

Ask your attorney about a will. If you have minor children, you must have a will to address guardianship, unless your state provides an alternative legal means to do so. Some people many need a trust to properly address their planning concerns. Some of your assets will also have their own beneficiary designations. Once you have you a plan, review it every few years or when there’s a birth, adoption, death, or divorce in the family.

Reference: New Hampshire Union Leader (July 27, 2019) “Estate planning is important and may require help from a professional”

Advance Planning Key for Alzheimer’s Patients

A retired physician and his wife have allowed a local television station to report their family’s journey with Alzheimer’s over the course of the last four years. The series continues with WCCO CBS Minnesota’s article “’All Lined Up Before You Need It’: Alzheimer’s Association Shares Steps for Estate Planning,” with four steps to take, if you notice that a family member is having memory lapses or trouble with simple tasks.

The Quinn family—Dr. Paul Quinn and his wife Peg—had some tough conversations years ago, when Paul’s memory was better, and when he was able to be completely honest with his wife about his wishes and what the couple would need to do moving forward.

Peg Quinn said that getting everything lined up long before it’s needed, is very important.

If there’s any sign of cognitive decline, there are legal and financial steps that must be pursued. Start with addressing the family budget and projected medical costs for long term care. If possible, gather all family members together for a planning session.

If they live in different parts of the state, or of the country, ask the family members to travel for a weekend family meeting. This is the kind of planning that is better when everyone is physically present.

Start by naming a power of attorney. It needs to be someone who is aware of the situation and will be able to make decisions on your behalf. An estate planning attorney can assist with making this decision.

Next, establish an advance directive with a focus on medical decisions. This may be the toughest part, since it is impossible to know how long someone will live with Alzheimer’s. The average patient lives four to eight years, according to the Alzheimer’s Association. The cost of care can add up fast—as much as $5,000 to $7,000 a month in some cases.

That’s why the next step—selecting an elder law estate planning attorney is so important. Planning for long-term care, qualifying for Medicaid and other benefits, is a complex challenge.

Dr. Quinn expressed his wishes to stay in his home as long as possible. However, his wife admits that he can’t stay focused on any projects for very long. The familiarity of their home makes life much easier for both of them, so they agreed early on to have in-home care, if it’s ever needed.

An estate planning attorney will help the family, by drafting estate planning documents and creating a plan as early as possible. A last will and testament must be created and executed before the person is legally incompetent. The same goes for a power of attorney and any health care power of attorney documents. Medicaid planning should be done as soon as possible, since there is a five-year look back period concerning transferring any assets.

Reference: WCCO CBS Minnesota (July 23, 2019) “’All Lined Up Before You Need It’ : Alzheimer’s Association Shares Steps for Estate Planning”

A Will, Power of Attorney and Health Care Power of Attorney: Three Documents Everyone Should Have

These three documents combined allow you to designate who you want to be responsible for your well- being, if you are unable to communicate to others on your own behalf and name who you want to receive your property. Having a will, power of attorney and health care power of attorney are the foundation of an estate plan and peace of mind, says the article “Simple steps to peace of mind” from the Traverse City Record Eagle.

If you die without a will, your state has a plan in place for you. However, you, or more correctly, your family, probably won’t like it. Your assets will be distributed according to the laws of inheritance, and people who you may not know or haven’t spoken to in years may end up inheriting your estate.

If your fate is to become incapacitated and you don’t have an estate plan, your family faces an entirely new set of challenges. Here’s what happened to one family:

A son contacted the financial advisor who had worked with the family for many years. He asked if the advisor had a power of attorney for his father. His mother had passed away two years ago, and his father had Alzheimer’s and wasn’t able to communicate or make decisions on his own behalf.

Five years ago, the financial advisor had recommended an estate planning attorney to the couple. The son called the attorney’s office and learned that his parents did make an appointment and met with the attorney about having these three documents created. However, they never moved forward with an estate plan.

The son had tried to talk with his parents over the years, but his father refused to discuss anything.

The son now had to hire that very same attorney to represent him in front of the probate court to be appointed as his father’s guardian and conservator. The son was appointed, but the court could just have easily appointed a complete stranger to these roles.

The son now has the power to help his father, but he will also have to report to the probate court every year to prove that his father’s well-being and finances are being handled properly. Having a will, power of attorney and medical power of attorney would have made this situation much easier for the family.

Guardianship is concerned with the person and his or her well-being. Conservatorship means a person has control over an individual’s financial matters and can make all decisions about property and assets.

There is a key difference between powers of attorney and conservatorship and guardianship. The person gets to name who they wish to have power of attorney. It’s someone who knows them, who they trust and they make the decision. With conservator and guardianship, it’s possible that someone you don’t know and who doesn’t know your family, holds all your legal rights.

A far better alternative is simply to meet with an estate planning attorney and have him create these three documents and whatever planning tools your situation calls for. Start by giving some thought to who you would want to be in charge of your life and your money, if you should become unable to manage your life by yourself. Then consider who you would want to have your various assets when you die. Take your notes with you to a meeting with an estate planning attorney, who will know what documents you need. Make sure to complete the process: signing all the completed documents, funding any trusts, retitling any accounts and finally, making sure your family knows where your documents are. This is a road to peace of mind, for you and your family.

Reference: Traverse City Record Eagle (June 23, 2019) “Simple steps to peace of mind”

More Reasons Why Everyone Should Have a Will

Most people aren’t going to have a large number of strangers show up after they die who pretend to be relatives, says the article “Here’s why you don’t want to die without leaving a will” from Arizona Central. However, there are many other reasons to have a will. In Arizona, an estate creditor can step in and become your personal representative after death, if you haven’t designated someone to administer your estate and your family members don’t step up to be involved.

Are you still not convinced? Without a will, you have no say in who inherits your money and possessions, which will be distributed according to the laws of your state.

Here are some tips to help get your estate plan started:

Work with an estate planning attorney. Using an attorney provides accountability, ensures that your wishes are reflected in the estate plan and makes sure that your will is deemed valid by the court. All too often, online documents are found to be deficient, declared invalid and the family is left with the laws of the state.

Name an executor. Your will should include the name of an executor, who will be responsible for handling your financial affairs after you die. She will manage your assets, identify what bills need to be paid, file state and federal tax returns and keep records of anything done on behalf of your estate.

Keep your will in a safe location. Make sure your executor has a copy and knows where it is. Tell your family where it is.

Don’t forget a residuary clause. If you forget to include any assets, a residuary clause will name someone who will receive them.

Don’t forget other important documents. That means a power of attorney and an advance directive. The advance directive spells out what kind of medical treatment you would want, if you are unable to communicate. Power of attorney gives a person you name the authority to act on your behalf.

What if my family fights a lot? Your best bet will be to name a private fiduciary to act as your personal representative. That way, no one can be accused of playing favorites, and a family history of sibling rivalry won’t undermine your wishes.

Make an appointment with a local estate planning attorney, who knows the laws of your state and can work with you to create an estate plan designed for your specific family situation. Both you and your family will enjoy the peace of mind of knowing that you are prepared for the future.

Reference: Arizona Central (June 21, 2019) “Here’s why you don’t want to die without leaving a will”

Why You Need a Last Will and Testament

A will and testament is the document that allows you to describe how you want your belongings and assets to be distributed after you die. It’s different than a “living will,” explains The Daily Sentinel, in the article “It’s important to have a Last Will and Testament.” A living will is a document used to detail how someone wants their end of life matters conducted.

In Colorado and some other states, the Living Will is referred to as an Advance Directive, which helps to avoid some confusion between what it accomplishes and the tasks of the will.

The will is also the document used to name the person who will be the personal representative, often referred to as the “executor”, to carry out the directions in the will.

When there’s no will, there is much more work to settle an estate. The distribution plan is determined by the laws of the state. It is not likely to be what the person had in mind, but by then, it is too late.

Every parent needs a will, because it is used to name a guardian for minor children or a child with special needs. This is not a decision that can be left to the law. There is no automatic solution based on state law, like there is for assets and belongings.

If there is a disagreement about who should care for the dependents, or how the assets should be used to care for the dependents, the only solution is to go to court and have the court decide what is in the children’s best interests. The time, expense and stress on the family is easily avoided, simply by having a properly prepared will.

There are occasionally questions about whether a general or special power of attorney can be used to name a person to handle affairs when someone dies. This is not true. The authority given to a person in a power of attorney automatically and legally terminates, when the person who gave that authority to another person has died.

Several years ago, a widow was preparing to create a will, but never did. She had no surviving parents or siblings, but she did have a son. She probably thought that the law would give him all her assets automatically.

Unfortunately, after the woman died, it was learned that the “son” was an informally adopted son who had never been legally adopted. According to the laws of the state, he had no legal right to her estate. She could have had a will prepared and he would have inherited everything. However, because she had no will, distant relatives who she did not even know, were the recipients of her estate.

This example may be a little extreme, but it is not uncommon. Many unexpected things occur when there is no estate plan, or an estate plan is prepared by an inexperienced person using a form they found online or at the local library.

Reference: The Daily Sentinel (June 1, 2019) “It’s important to have a Last Will and Testament”

What Does ‘Getting Your Affairs in Order’ Really Mean?

That “something” that happens that no one wants to come out and say is that you are either incapacitated by a serious illness or injury or the ultimate ‘something,’ which is death. There are steps you can take that will help your family and loved ones, so they have the information they need and can help you, says Catching Health’s article “Getting your affairs in order.”

Start with the concept of incapacity, which is an important part of estate planning. Who would you want to speak on your behalf? Would that person be the same one you would want to make important financial decisions, pay bills and handle your personal affairs? Does your family know what your wishes are, or do you know what your parent’s wishes are?

Financial Power of Attorney. Someone needs to be able to pay your bills and handle financial matters. That person is named in a Financial Power of Attorney, and they become your agent. Without an agent, your family will have to go to court and get a conservatorship. This takes time and money. It also brings in court involvement into your life and adds another layer of stress and expense.

It’s important to name someone who you trust implicitly and whose financial savvy you trust. Talk with the person you have in mind first and make sure they are comfortable taking on this responsibility. There may be other family members who will not agree with your decisions, or your agent’s decisions. They’ll have to be able to stick to the course in the face of disagreements.

Medical Power of Attorney. The Medical Power of Attorney is used when end-of-life care decisions must be made. This is usually when someone is in a persistent vegetative state, has a terminal illness or is in an irreversible coma. Be cautious: sometimes people want to appoint all their children to make health care decisions. When there are disputes, the doctor ends up having to make the decision. The doctor does not want to be a mediator. One person needs to be the spokesperson for you.

Health Care Directive or Living Will. The name of these documents and what they serve to accomplish does vary from state to state, so speak with an estate planning attorney in your state to determine exactly what it is that you need.

Health Care Proxy. This is the health care agent who makes medical decisions on your behalf, when you can no longer do so. In Maine, that’s a health care advance directive. The document should be given to the named person for easy access. It should also be given to doctors and medical providers.

DNR, or Do Not Resuscitate Order. This is a document that says that if your heart has stopped working or if you stop breathing, not to bring you back to life. When an ambulance arrives and the EMT asked for this document, it’s because they need to know what your wishes are. Some folks put them on the fridge or in a folder where an aide or family member can find them easily. If you are in cardiac arrest and the DNR is with a family member who is driving from another state to get to you, the EMT is bound by law to revive you. You need to have that on hand, if that is your wish.

How Much Should You Tell Your Kids? While it’s really up to you as to how much you want to share with your kids, the more they know, the more they can help in an emergency. Some seniors bring their kids with them to the estate planning attorney’s office, but some prefer to keep everything under wraps. At the very least, the children need to know where the important documents are, and have contact information for the estate planning attorney, the accountant and the financial advisor. Many people create a binder with all of their important documents, so there are no delays caused in healthcare decisions.

Reference: Catching Health (May 28, 2019) “Getting your affairs in order.”