Elder Law

The Importance of Having a Will in Place

November 23, 2020Filed Under: Elder Law, Estate Planning

Care.com’s annual estate planning survey for 2019 found that 57% of U.S. adults do not have a Last Will & Testament (a “Will”). The survey found that participants were more likely or less likely to have a Will depending on issues such as age, race, and education. For example, when broken down generationally, 66% of people aged 65 and older, comprising the Baby Boomer generation and The Greatest Generation, have a Will, better than the overall average. Only 39% of the participants that fell into Generation X and 18% of the Millennial participants have a Will, well below the overall average.

The survey participants that did not have a Will gave many reasons why. The overwhelming answer was that they just had not gotten around to it. This answer was given 52% of the time. The next most common reason, given 22% of the time, was that they did not think they had enough assets to need a Will. The cost of making a Will was given as a reason 6% of the time, which was one of the least given answers.

Understanding the Power of a Will

The survey points out a major flaw in understanding the power of a Will. Most people have a basic understanding that a Will transfers assets you own when you die to the people outlined in your Will. Based on this oversimplified explanation of a reason to have a Will, it is easy to understand why younger people and people who have not yet amassed many assets misbelieve they do not need a Will. Never mind that anyone can die at any time, or that you own more than you realize and you want to have someone named to deal with all your stuff.

More importantly, anyone with a minor child should use a Will to name a Guardian for that child. Whether you are married to or divorced from the child’s other parent, naming a Guardian in case of your death is paramount. If the child’s other parent or adoptive parent is alive and still has parental rights when you die, the child stays with that parent. However, if the child’s other parent is dead or does not have parental rights, then the person nominated as Guardian in your Will is the only person that can stand up in guardianship court and definitively say that you believed your minor child’s custody should transfer to them. Then, since you are making a Will, you might as well also state who should inherit any assets you might own.

Creating a Will is a simple process when you engage experienced attorneys like us. Sometimes you know the best person to care for your child. Sometimes you need help picking between family members, or you do not have family members to choose from. We are not here to just fill out a Will form for you. We are here to help you and guide you through whatever issue is preventing you from making a Will.

Estate Planning Checkup Article

November 16, 2020Filed Under: Elder Law, Estate Planning

You should check your estate planning documents every so often, to make sure they’re still good, especially with big life changes like births, marriages, divorces, and moving to another state. Children grow up, marriages dissolve, property gets sold, residences change. That’s why we recommend that you consult us for an estate-plan check-up every five years or so.

What Happens If You Retire in Another State?

If you retire to another state, your will would probably be good, but powers of attorney vary from state to state. Documents from the “old” state might not work in the “new” one, and your documents would not be there for you when you need them.

How Does a Spouse or Ex-spouse Effect My Estate Plan?

Suppose you willed your property to your spouse and appointed that person to be your power of attorney. You got divorced, but you never got around to changing your plan. The law would usually step in to prevent your ex-spouse from inheriting, but you might be stuck with that person holding power of attorney over your property and health care.

Maybe you named your ex-spouse’s father as your executor and agent. Now he can’t stand you and blames you for the break-up.

How Do I Divide my Assets Equally to my Children?

Perhaps you willed your property to your two children equally – but now one child is addicted to opioids. Your will did not restrict how money should be spent. If your addicted child inherits a lot of money in one chunk, that money could vanish to drugs and your child’s survival might be at risk.

Or, you deeded your house to one child and made a will leaving money to your other child. Then you forgot about the deed and made another will, years later. That will split everything equally. The law would invalidate the second will as to the house, because deeds supplant wills. Consequently, one child might end up receiving more value than the other. That unfairness might sour the children against each other forever.

If you got divorced, sold property, moved to another state, or did your documents more than five years ago, come see us for an estate plan check-up.

When it comes to estate planning, “once is not done.”

Who Should Make Financial Decisions For You?

September 28, 2020Filed Under: Elder Law, Estate Planning, Long Term Care

Who should you trust to manage your financial well being when you are no longer able to do so? A power of attorney (POA), otherwise known as an agent to your principal, has the legal authority to represent and make decisions on your behalf. What characteristics should you look for when designating a power of attorney? No matter what type of power of attorney you seek to arrange, your potential agent must be a person you deem to be trustworthy and honorable to conduct your affairs in your best interest.

Often the principal who designates the POA may prefer to choose a family member such as a spouse or adult child. If a family member is unable or unwilling to act when needed you can name a trusted friend or retain professional representation to ensure your interests are well looked after. Some people choose to have co-agents or name a secondary agent in the event another might pre-decease you.

Stipulations regarding the selection of a POA are minimal. Your chosen power of attorney must meet two legal thresholds; be an adult and not be incapacitated. There are no special qualifications regarding financial acumen or legal knowledge, and in fact, integrity is considered the most important attribute when selecting your agent.

Some questions to consider beyond your basic level of trust with this person(s) include:

How does this person manage their own legal and financial responsibilities? Are they financially responsible? Do they lead a steady life? Are they good at making decisions under pressure?
Will the person you select charge you a fee for their service? Generally, family members will not but, if you choose professional representation such as a financial planner or an attorney, there is usually a fee associated with their expertise and service.
Is the person you want to represent you willing to do so? Becoming an agent is a big responsibility to accept, and for many reasons, the person you want may not agree to serve as your agent.

Your power of attorney agent can have broad or limited legal authority to make decisions and transactions on your behalf about your property, finances, and medical care. The agent’s power is derived through your permissions, and if you are dissatisfied with your agent, you can terminate the POA/agent relationship and create a new one. Your power of attorney must comply with state law. When you work with us, we will make sure yours complies with all applicable laws.

There are a few misconceptions about the power of attorney. The first is you can create a POA on your behalf after you are incapacitated. You cannot as it is too late. For your power of attorney to be valid, your agent must be appointed before you become incapacitated through illness or disability. If you do not have your POA agent legally in place and are unable to manage your affairs, it may become necessary for a court to appoint someone to act on your behalf. People appointed to represent your interests in this manner are referred to as guardians, conservators, or committees, depending on your local state law. To avoid someone making decisions for you who you may not have chosen, it is imperative to have the proper power of attorney legally in place before you become incapacitated.

Another misconception is that your POA agent can make whatever financial decision they want to about your estate and that all power of attorney documents are the same. Your selected agent, by law, has an overriding obligation known as a fiduciary obligation to make decisions in your best interests. This responsibility is why it is imperative to choose a trustworthy agent as it can help avoid challenges to and litigation of your estate. You must have full confidence in the actions your agent will take on your behalf. You can appoint different agents for different POA document functions. We can help you figure out which powers should be given to particular agents. For example, you may want a different agent to handle real estate transactions on your behalf.

Selecting an agent and preparing a financial power of attorney is an important part of your overall plan. I am more than happy to help you and welcome your call.

How to Talk to Your Children About Their Inheritance

September 21, 2020Filed Under: Asset Protection, Elder Law, Estate Planning

Many parents are uncomfortable talking to their kids about their wealth. Talking about how much money or property you have is usually viewed as taboo. Asking someone else about what they have is often considered impolite. However, failing to talk to kids about how much they may inherit could leave them unprepared to handle even a modest amount, and often results in the money being squandered quickly.

Baby boomers are considered the wealthiest generation and are set to pass that wealth on to their children. It’s estimated that $68 trillion will be passed down from boomers within the next few decades. By 2030, millennials will hold five times as much wealth as they do today.

Many who have substantial wealth are concerned that if their children know the extent of their wealth, this will take away any motivation for the children to be productive and involved citizens. Parents with substantial wealth often want their children to learn how to live in the world as “normal” people, and to be productive and successful in their own right. Some may go so far as to hide their wealth to encourage their children to work and build their own wealth.

But the degree of wealth is relative. Even those who are not as wealthy may not want their children to know how much they have. With the rising costs of health care, they are concerned that all of their savings will be needed for retirement, medical expenses, and long term care. If this becomes a reality their kids would not receive an inheritance they may have been counting on.

Failing to prepare children for what they may inherit can hinder their ability to handle money wisely. Many find they suddenly feel separated from their friends, isolated, even confused about how to handle relationships. Others will be wasteful and spend their new found money irresponsibly. Those who inherit even a modest amount are likely to be just as irresponsible; stories of inheritances being squandered on an expensive sports car, lavish vacations, and fast living are all too common.

Experts agree it is important to talk to children about money and wealth during their adult years to help them learn how to be better stewards of wealth. This doesn’t mean parents have to take a show their children all of their bank accounts, business interests and other evidence of wealth. Instead, experts suggest talking to children about their values, the opportunities money can provide and what you as parents want to accomplish with the money you have. Most parents want their children to think about helping others, and many want to encourage entrepreneurship. It can be helpful to give children a small amount of money at a young age to teach them how to save and invest, spend wisely, and to show them the importance of supporting charities.

One of the most effective ways to teach children about values and spending and investing money is to be an example. Parents need to let their children see them using their money in ways that reinforce their values. Some parents show how they value family relationships by spending their money on family vacations or buying a second home where the entire family can gather for summers and holidays. Others involve their children in choosing charities to support and provide children their own money to donate. If your children see you living your values, chances are they will adopt similar values as well.

We help families determine how to leave money to children in a beneficial way, how to plan for unexpected health care issues, and how to make sure appropriate people are named to step in and help if needed. We welcome the opportunity to talk to you about your planning needs.