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New Years Resolutions?

Is an estate planning tune up on your list of New Years Resolutions?

If yes, you’re in good company!

Check out this fun “punch list” from Above the Law: Estate Planning Resolutions For 2019: How To Be A Grown-Up In The New Year.

This is a great list and includes items I’ve written about here and here.  A short summary of their list:

  1. Write a Last Will and Testament.
  2. Make a Power of Attorney.
  3. Execute a Health Care Proxy.
  4. Purchase a life insurance policy.
  5. Check beneficiary designation forms.
  6. Consider long-term care and disability insurance.
  7. Consult with a financial advisor.
  8. Talk to your parents and grandparents about their estate plans.
  9. Consider burial options.
  10. Inventory your assets.
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Estate Planning Considerations for Mothers

How should a mother provide for her children in her will?  A recent article asks this question, pointing out that many women live alone and need to make decisions on their own, and not with a spouse or partner, regarding their estate planning, finances, and inheritance for their children.

“There are 26.7 million women who are aged 65 or older, according to the 2016 profile of older Americans by the U.S. Department of Health and Human Services. Nearly half (46%) of women who are aged 75 or older live alone. These women have homes, financial resources and children, requiring them to make these decisions on their own.”

The author points out that a mother’s desire to treat her children “equally” in her estate planning, may not match the realities faced by her children.  “For many, dividing the inheritance equally among their offspring is a deeply held value. But it isn’t always easy: What if one child is a successful professional with a good pension plan, and the other is a struggling artist who may never have adequate health coverage? Or perhaps one daughter has a special-needs child, and the other has chosen not to have children? What then is the process of balancing their value of equal distribution and the contradictory need to make financially realistically decisions?”

 

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A Celebrity’s Daughter’s Death and Estate Planning for Young Adults

A few weeks ago, I wrote about the importance of having your now adult child get his or her estate planning documents prepared.  The idea may seem unnecessary at first blush — your now 18 year old (or twenty-something) “adult” child has just reached the legal age of adulthood and likely has yet to accumulate significant assets.  He or she may in many ways seem still like a child to you, and not yet ready for important adult documents.  However, under the law, they are adults, and you are no longer their default decisionmaker nor are you automatically granted access to your adult child’s medical records.  This is an important time for your child to designate whom he or she wishes to make these types of decisions.

A celebrity death serves as reminder to us of all the necessity of getting these documents in place.  Bobbi Kristina Brown, the twenty-two year old daughter of Whitney Houston and Bobby Brown, died recently after several months in a comatose state.  You can read more about the tragic story here and here.  Unfortunately, her lack of incapacity planning documentation and resulting legal protections (not unusual, given her age) resulted in a family legal fight during her incapacity.  A reminder to talk with your young adult children about the necessity of getting, at a minimum, their incapacity documents in place under the counsel of an estate planning attorney.

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What Can Celebrity Deaths Teach Us?

High profile celebrity deaths are regularly in the headlines. The ongoing legal battle faced by Anna Nicole Smith, and now her Estate, continues.  That case included allegations of interference with inheritance.  Casey Kasem‘s last months raise questions about guardianship, elder abuse, fiduciary roles, and end of life decision making.  Philip Seymour Hoffman‘s estate plan, lacking in planning for the Federal Estate Tax and failing to include a child born after the his Will was executed, was largely seen as incomplete protection for his family.  Similarly, James Gandolfini’s Will was panned.  As one commentator summarized, “the most common tag-line is that his will is a tax disaster.”   In contrast, Robin Williams’ estate plan, is viewed by some as an example of a solid planning.

These estates serve as reminders for all of us to revisit our estate plans.  Key among the lessons are that even if you have a plan in place, you need to revisit that plan every couple of years or after a change in life, such as after the birth of a child or a divorce.  Questions to consider:

Do you have an estate plan?  Do you have a Will?  Could a Trust be a helpful instrument for you?

When is the last time you reviewed your plan?

Are all of your children included in your plan?  Who do you name as their guardians?  Are these still the right people?

Do you have trusts to provide for your children until the are the appropriate ages to handle money?

Do you have incapacity documents in place?  Who have you named to be decisionmakers in the event you are incapacitated?  Are they still the right people?

Could your Estate be subject to Federal Estate Tax?  Do you have a plan in place to minimize potential Federal Estate Tax liability?

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Adult Guardianships in Indiana

Good planning for the possibility of future incapacitates, can decrease the likelihood of ever needing a guardianship.  However, if documents are not in place, or even if they are, a guardianship can be needed in certain situations.

What is an adult guardianship?

An adult guardianship is a court proceeding by which a court adjudicates whether a person has the capacity to make financial and medical decisions for herself.  It is a serious proceeding.  A determination of incapacity means the loss of many legal rights, including the ability to enter into contracts.  If the court determines that an individual is incapacitated, the court appoints a guardian to make decisions for the incapacitated person.  The guardian role is similar to that of an attorney-in-fact and health care representative, documents that can be prepared when an individual has capacity, for future incapacity planning.

When is a guardianship needed?

A guardianship may be needed when an individual is no longer able to make financial and health decisions for himself.  This may be due to illness, injury, or other cause.  Guardianship is also available for children due to their age of minority.  Even if Power of Attorney and Appointment of Health Care Representative in place, a guardianship can be necessary, particularly in cases of financial elder abuse or people seeking to take advantage of the incapacitated person.

Who can be appointed as guardian of an adult?

Under Indiana law, the court will first look to the individual named as in a Power of Attorney document as the Attorney-in-Fact to serve as guardian.  If there is no qualified Attorney-in-Fact, the court would next give priority to a spouse followed by an adult child, if that person is suitable and willing to serve.  An independent person or an corporate fiduciary could also serve in this role.

What is guardianship of the person?

A guardian of a person is responsible for the food, health, and shelter needs of an incapacitated person.  The guardian is responsible for the physical and emotional well being of the incapacitated person.  The guardian makes healthcare decisions for the incapacitated person and is responsible for making sure the living arrangements for the incapacitated person are appropriate for their needs.

What is a guardianship of the estate?

A guardian of the estate is responsible for the financial affairs of the incapacitated person.  The guardian will pay the incapacitated person’s bills and manage their finances.  The guardian has a duty to prepare and file an inventory with the court and file regular accounting.

Does a guardianship process require the assistance of an attorney?

In addition to the obtaining the assistance of an attorney in the guardianship filing and procedure with the court, once appointed, a guardian will benefit from the assistance and advise of legal counsel in carrying out their responsibilities and duties.  An attorney will prepare the guardianship petition, represent the potential guardian before the court, and will assist with the preparation of the inventory and accounting to be filed with the court.  The guardian serves in a fiduciary role, and an attorney can advise the guardian as to his responsibilities and duties in that role.

An alleged incapacitated person also has a right to be represented by counsel in the guardianship proceedings, and may wish for counsel to protect his rights.