How Do I Plan for End-of-Life Measures for a Loved One?

It’s not that uncommon for a senior to injure himself in the regular course of living at home as he ages. A broken hip will mean a stay at the hospital. In many cases, a senior recovering from a broken hip in the hospital will be released to a nursing home. Sometimes, things can take a downward turn. The elderly are susceptible to other illnesses, and often just being in a care facility, even the best ones, can expose an already vulnerable patient to other illnesses, like pneumonia or a staph infection.

When more than one family member shares power of attorney, says The Grand Forks Herald’s recent article, “Joint power of attorney complicated this couple’s wishes,” there can be emotional stresses that result from differing opinions about care.

In one situation, the wife alerted her adult stepchildren about her husband’s condition in a health crisis. He had been hospitalized for a broken hip, then released to a nursing home, where he developed pneumonia.

While she initially hoped that their arrival would be a comfort, the children had their own idea about what was best for their father. They basically took control of the situation and negated their father’s health care documents. They had him sent back to the hospital, thinking that would be best for his overall health.

Arriving at the hospital, the woman reported that her husband was weaker from the transfer and confused about why he was back in the hospital.

The children shared power of attorney, which was set up so that both the wife and the children could make decisions about the man’s medical care. The wife was troubled by the children’s insistence that he needed to return to the hospital. The children felt that his care at the nursing home was inadequate.

It’s hard to know what may motivate the stepchildren here, but an attorney who specializes in estate or elder law is the best resource for people when making decisions, while setting up powers of attorney. An attorney may not have advised that the wife and stepchildren share this decision-making power. Even when the intentions are good, sometimes its best when only one person is in charge.

Estates can be complex when there are adult children and a second marriage—even when the relationships are good.

It would have been better had the father spoken with his children beforehand to explain his overall wishes about his care, so that there would be less discord in the decision-making process. The treating physician might have been asked to speak with the children and explain the impact that a transfer would have on an already injured and ill person. In most cases nursing homes are just as able to treat pneumonia as a hospital, and it would have spared him the trauma of the move.

At this point, it may be better to forgive and move on for the wife, so that her relationship with the stepchildren is not difficult during what may be the last years of her husband’s life.

Reference: Grand Forks Herald (March 8, 2019) “Joint power of attorney complicated this couple’s wishes”

Aging in Place: Reality or Dream?
A geriatrician holds the hand of an elderly woman with arthritis.

Aging in Place: Reality or Dream?

Seniors crave their independence and a sense of place. Almost all wish to remain in their own homes and to “age in place.” Being independent in your senior years benefits everyone. However, if aging brings illness, professional home caregiving may be unaffordable, says The Winston-Salem Journal in the article “Who will help me to age in place?”

Even though they want to remain independent, family member participation may be necessary for this to happen. Family caregivers may live with aging parents, serving as guardians, trustees or power of attorney agents on their parent’s behalf. They may perform many tasks, including cooking, cleaning and monitoring their medical or home care. They may take care of the home and take aging parents on outings.

Loyalty to aging parents runs the gamut, from daily contacts and living together, to children who vanish as soon as they are financially independent. While our biology may dictate that close family members are genetically predisposed to care for us most, it’s not everyone’s experience.

If your goal is to have parents, children and grandchildren all spend time together as the generations move through their lives, the time to start is while you are parenting. The most important thing you can do to increase the likelihood of having family members who value each other and care for each other, is to raise children with love and kindness.

You should limit the amount of time that children spend with electronic devices. Making family connections and teaching caregiving skills within the family, requires time and attention. Teach your children empathy and caregiving through gardening, caring for plants and pets and letting them see how you take care of siblings, parents, grandparents, friends and the less fortunate through volunteer work.

Our children learn more from what they see, than what we say. By teaching your children to respect and care for those they love, you will be creating a family legacy based on your values. This will be as much a part of them, as any inheritance you can leave them.

Part of caregiving is taking care of the legal and financial side of your life. Ensure that your family members have an estate plan in place, including a will, financial power of attorney and health care power of attorney. Caregiving for others involves preparing for the ups and downs of life. This shows your children that there are things we do for ourselves and for others that make life easier for those we leave behind. It is an important life lesson for each generation.

Reference: The Winston-Salem Journal (March 5, 2019) “Who will help me to age in place?”

Hurt Feelings, Family Battles and A Royal Mess
couple arguing, argument.

Hurt Feelings, Family Battles and A Royal Mess

Without an estate plan in place, and that includes a will, power of attorney, and health care directives, dividing up an estate gets messy, fast. Preparing a will does not really take that much time, but it does require you to do some work, like making a list of your assets and sitting down with an estate planning attorney.

The title of this article from Zing! says it all: “What Happens If You Die Without a Will? You Might Leave Behind Hurt Feelings, Legal Battles and Chaos.” Dying without a will, means that your estate is “intestate,” and the rules of your state will dictate exactly what happens to your assets. You may not want your kid brother or the man you were divorcing to get anything but depending on your state’s laws and your marital state, that could happen.

In most states, your assets will pass to your kids and your spouse. If you don’t have any, your assets are passed on to your nearest living relatives. If your kids are minors, the court will decide who will raise them. A will is also about naming a guardian for your minor children and naming a person who will be in charge of your money to look after them.

When there’s no will, everything is decided by the court.

Having a complete estate plan is like a gift to your survivors. It tells them exactly what you want to have happen to your possessions, who you want to make decisions on your behalf for medical care if you are unable to, who you would want to raise your children and even what kind of funeral you want to have.

Here’s an example, let’s say that an adult is financially supporting a parent, even though the adult does not live with their parent. In New York State, if that person dies, their spouse inherits everything. If that person has a spouse and children, the spouse inherits the first $50,000 plus half the balance of the estate. The children inherit everything else.

The parent who was dependent upon the adult child, is left on their own. The parent would have to hope that her daughter-in-law (or son-in-law) would be willing to continue to help them. Basic estate planning could have set up a trust or other mechanism to support that adult.

Another concern: if you die without a will, it is more likely that people you don’t know, may try to fraudulently make claims on your estate. There may be bitter resentment, if one family member steps up to try to take charge of the process. That person will have to apply to the court to be appointed as the estate administrator. When that happens, your assets will be frozen. If no one wants to become the executor, the court will appoint a public trustee.

What if there’s not enough money to support the family and the family home needs to be sold? That would become a legal and financial nightmare for all concerned.

By sitting down with an experienced estate planning attorney, you protect yourself, your assets and your family and loved ones. You can determine how you want your assets to be distributed. You can also determine who you want to be in charge of your financial life and your health, if you should become incapacitated. With a will, power of attorney, power of attorney for healthcare, and other documents that are used, depending upon your unique situation, you can have a say in what happens and spare your family the legal, financial, and emotional stress that occurs when there is no will.

Reference: Zing! (March 4, 2019) “What Happens If You Die Without a Will? You Might Leave Behind Hurt Feelings, Legal Battles and Chaos”

Did Luke Perry Plan His Estate?

Fifty-two-year-old Luke Perry suffered a serious stroke recently and was hospitalized under heavy sedation. A few days later, his family made the decision to remove life support, when it was apparent that he wouldn’t recover and after a reported second stroke.

Forbes reports in its article, “Luke Perry Protected His Family With Estate Planning,” that he was surrounded by his children, 21-year-old Jack and 18-year-old Sophie, his fiancé, ex-wife, mother and siblings, when he passed.

The fact that the hospital let Perry’s family end life support, means that he likely had executed the proper legal documents, so his family could make the decision. Those documents were most likely an advance directive or a power of attorney. Without these legal documents, Luke’s family may have needed to obtain an order from a probate court to terminate life support—a public and emotional process that would have prolonged his suffering and made it even more stressful for his family.

Perry reportedly created a will in 2015. He left everything to his two children. According to a family friend, Perry discovered he had precancerous growths following a colonoscopy. This motivated him to create a will to protect his children.

Luke Perry had a reported net worth of around $10 million, so he may have created a revocable living trust, in addition to a will. If he had only a will, then his estate will have to pass through probate court. However, if he had a trust, and if his trust was properly funded (he transferred his assets into his trust prior to death), then his assets can pass to his children without court involvement.

One question is whether Perry would have wanted something to go to his fiancé, therapist Wendy Madison Bauer. Since his will was drafted in 2015, he likely did not include Bauer at the time. If the couple had married prior to his death, then Bauer would typically have received rights as a “pretermitted spouse.” These rights wouldn’t have been automatic, but would have depended on the terms of his will and/or trust, as well as whether the couple signed a prenuptial agreement that addressed inheritance rights. However, if the documents failed to show an intent to exclude Bauer as a beneficiary, then she would’ve been entitled to one-third of his estate under California law, if they’d been married.

Because Perry died before he married Bauer, she’s not entitled to inherit anything through his will or trust, assuming his children are his only beneficiaries, and no later will, trust, or amendment is found that includes her. Perry may have left money for Bauer in other ways, like life insurance, a joint bank account, or an account with a TOD (Transfer on Death) or POD (Payable on Death) clause.

Luke Perry’s death provides an important lesson: don’t wait until you’re “old” to do your estate planning. Perry’s 2015 cancer scare made him take action, which simplified the process for his family to terminate life support and will likely make the process of dividing his estate easier.

Reference: Forbes (March 8, 2019) “Luke Perry Protected His Family With Estate Planning”

Are You Retiring in 2019? Here’s What You Need to Know

There are more than few steps you’ll need to complete, before packing up your desk, cubicle or locker and saying good bye to your work family. Even if your 401(k) and IRA is in order, there are things you need to during the last few months of working, says Next Avenue in the article “Tips to Prepare for Retiring This Spring or Summer.”

There’s detailed planning, organization of documents, and additional financial details that need attending. You may also want to start creating your “bucket list” — a list of things you’ve always wanted to do, but never had the time to do while you were working. Getting all of this in order, will speed your waiting time and prepare you better, when the last day of your working life does finally arrive.

Whether you are three months or six months from retirement, here are some tips for your to-do list:

Social Security. Figure out when the best time for you to take Social Security benefits will be. Can you delay it until age 70? That’s when you’ll get the biggest payout. The earlier you start collecting benefits, the smaller your monthly check will be. Take it early, and you are locked in to this lower rate.

Health Care. Figuring out how to manage health care costs, is the single biggest worry of retirement for most Americans. An injury that puts you in a nursing care facility can make a huge dent in your retirement funds, even if it’s just for a short while. This is the time of your life, when focusing on your health is most important, even if you’ve been careless in earlier decades. Evaluate your health status and get check ups with your regular physician and your dentist.

Investments. Check with your HR department about when you’ll need to roll over your 401(k) plan. If you transfer the funds into a low-cost IRA, you may save in fees. Work with your financial advisor to determine what your withdrawal rate will be. You may need to reevaluate some of your retirement goals or consider working part time during retirement for a few years.

Medicare. If you’re almost 65, you can start enrolling in Medicare now. The government lets you start the process within three months of your 65th birthday. Start this process, so you are covered, once you are not on the company’s health care plan.

Expectations. The first six months to a year of retirement can be both wonderful and terrible. While enjoying freedom, many people find it hard to withdraw money from the same accounts they spent so many years building. What if they don’t have enough for a long life? Take a realistic look at your lifestyle, budget, and spending habits, before you retire to make sure you are financially ready to do so. If you think you might work part time, look into the positions that are available in your area and what they pay.

Lifestyle. Often, we are so busy planning for the financial side of retirement, that we forget to plan for the “soft” side: what will you do in retirement? Will you volunteer with an organization that has meaning for you? Write the novel you’ve started on a dozen times? Spend more time with your grandchildren? Travel? What will make you feel like your time is being well-spent, and what will make you fulfilled?

Don’t forget the legal plan. Retired or not, you need to have a will, power of attorney, and health care power of attorney to protect your family, whether you are preparing for retirement or in the middle of your career. Speak with an estate planning attorney to ensure that these important documents are in place.

Reference: Next Avenue (March 6, 2019) “Tips to Prepare for Retiring This Spring or Summer”

Estate Planning for Parents with Young Children

Attorneys who focus their practices on estate planning, know that not every story has a happy ending. For some of them, it’s a professional mission to make sure that young parents are prepared for the unthinkable, says KTVO in the article “Family 411: Thinking about estate planning while your kids are young.”

It’s a very easy thing to forget, because it’s so unpleasant to consider. The idea of becoming seriously ill or even dying while your children are young, is every parent’s worst fear. But putting off having an estate plan with a will that prepares for this possibility is so important. Doing it will provide peace of mind, and a road forward for those who survive you, if your worst fears were to come true.

Start with a will. In a will, you’ll name a guardian, the person who would be in charge of rearing your children and have physical custody of them. Don’t assume that your parents will take over, or that your husband’s parents will. What if both sets of parents want to be the custodians? The last thing you want is for your in-laws and parents to end up in a court battle over custody of your children.

Another important document: a trust. You should have life insurance that will be the source for paying for the children’s education, including college, summer camps, after-school activities and their overall cost of living. In addition, proceeds from a life insurance policy cannot be given to a minor.

However, what if your son or daughter turned 18 and were suddenly awarded $500,000? At that age, would they know how to handle such a large sum of money? Many adults don’t. A trust allows you to give clear directions regarding how old the child must be, before receiving a set amount of money. You can also stipulate that the child must complete college before receiving funds or reach certain milestones.

An estate plan with young children in mind, must have a Power of Attorney for financial decisions and one for medical decisions. That allows a named person to make important financial and medical decisions on behalf of the child. You may not want to have their legal guardian in charge of their finances; by dividing up the responsibilities, a checks and balances system is set into place.

However, for medical decisions, it is best to have one primary person named. In that way, any care decisions in an emergency can be made swiftly.

While you are creating an estate plan with your children in mind, make sure your estate plan has the same documents for you and your spouse: Power of Attorney, medical Power of Attorney, a HIPAA release form and a living will.

Speak with a local estate planning attorney who has experience in planning for young families.

Reference: KTVO.com (Feb. 6, 2019) “Family 411: Thinking about estate planning while your kids are young”

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 emergency.

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.

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

Why Should I Create a Trust If I’m Not 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, which could be family battles, unnecessary taxes and an extended probate process. These issues and others can be avoided by creating 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 an estate planning attorney about setting up a trust, also ask about your will, healthcare derivatives, a living will and powers of attorney.

Your attorney will have 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 an experienced estate planning attorney.

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

Why Is a Revocable Trust So Valuable in Estate Planning?

There’s quite a bit that a trust can do to solve big estate planning and tax problems for many families.

As Forbes explains in its recent article, “Revocable Trusts: The Swiss Army Knife Of Financial Planning,” trusts are a critical component of a proper estate plan. There are three parties to a trust: the owner of some property (settler or grantor) turns it over to a trusted person or organization (trustee) under a trust arrangement to hold and manage for the benefit of someone (the beneficiary). A written trust document will spell out the terms of the arrangement.

One of the most useful trusts is a revocable trust (inter vivos) where the grantor creates a trust, funds it, manages it by herself, and has unrestricted rights to the trust assets (corpus). The grantor has the right at any point to revoke the trust, by simply tearing up the document and reclaiming the assets, or perhaps modifying the trust to accomplish other estate planning goals.

After discussing trusts with your attorney, he or she will draft the trust document and re-title property to the trust. The assets transferred to a revocable trust can be reclaimed at any time. The grantor has unrestricted rights to the property. During the life of the grantor, the trust provides protection and management, if and when it’s needed.

Let’s examine the potential lifetime and estate planning benefits that can be incorporated into the trust:

  • Lifetime Benefits. If the grantor is unable or uninterested in managing the trust, the grantor can hire an investment advisor to manage the account in one of the major discount brokerages, or he can appoint a trust company to act for him.
  • Incapacity. A trusted spouse, child, or friend can be named to care for and represent the needs of the grantor/beneficiary. She will manage the assets during incapacity, without having to declare the grantor incompetent and petitioning for a guardianship. After the grantor has recovered, she can resume the duties as trustee.
  • This can be a stressful legal proceeding that makes the grantor a ward of the state. This proceeding can be expensive, public, humiliating, restrictive and burdensome. However, a well-drafted trust (along with powers of attorney) avoids this.

The revocable trust is a great tool for estate planning because it bypasses probate, which can mean considerably less expense, stress and time.

In addition to a trust, ask your attorney about the rest of your estate plan: a will, powers of attorney, medical directives and other considerations.

Any trust should be created by a very competent trust attorney, after a discussion about what you want to accomplish.

Reference: Forbes (February 20, 2019) “Revocable Trusts: The Swiss Army Knife Of Financial Planning”

How Do I Plan for a Blended Family?

A blended family (or stepfamily) can be thought of as the result of two or more people forming a life together (married or not) that includes children from one or both of their previous relationships, says The Pittsburgh Post-Gazette in a recent article, “You’re in love again, but consider the legal and financial issues before it’s too late.”

Research from the Pew Research Center study reveals a high remarriage rate for those 55 and older—67% between the ages 55 and 64 remarry. Some of the high remarriage percentage may be due to increasing life expectancies or the death of a spouse. In addition, divorces are increasing for older people who may have decided that, with the children grown, they want to go their separate ways.

It’s important to note that although 50% of first marriages end in divorce, that number jumps to 67% of second marriages and 80% of third marriages end in divorce.

So if you’re remarrying, you should think about starting out with a prenuptial agreement. This type of agreement is made between two people prior to marriage. It sets out rights to property and support, in case there’s a divorce or death. Both parties must reveal their finances. This is really helpful, when each may have different income sources, assets and expenses.

You should discuss whose name will be on the deed to your home, which is often the asset with the most value, as well as the beneficiary designations of your life insurance policies, 401(k)s and individual retirement accounts.

It is also important to review the agents under your health care directives and financial powers of attorney. Ask yourself if you truly want your stepchildren in any of these agent roles, which may include “pulling the plug” or ending life support.

Talk to an experienced estate planning attorney about these important documents that you’ll need, when you say “I do” for the second (or third) time.

Reference: Pittsburgh Post-Gazette (February 24, 2019) “You’re in love again, but consider the legal and financial issues before it’s too late”