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.

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?”

 

An Estate Planning Reminder for Parents with Minor Children

I just tweeted an article by a Boston financial planner, Dee Lee, who discusses the importance of parents with minor children getting their estate plans in place.  I strongly feel that setting up an estate plan with protections for minor children is just as important as the other aspects of parenting for which we take so much care and concern.  I have written about this here and here.   Just like finding the right pediatrician, car seat, and child care, an estate plan is an essential protection for your children.  This writer said it so well, that I am posting here some highlights — and  a good reminder — from her article:

“Experts estimate that less than 35% of individuals have wills. This is one thing people procrastinate about, especially parents with young children.

These parents are focused on the safety issues around their home to keep the kids safe but have not done any estate planning to keep the kids safe if something should happen to them.

At the very least, you need a will naming guardians for your children if something should happen to you and your spouse.

Without a will you are leaving behind a messy situation to be handle by whoever the court appoints. And if there is life insurance involved I can guarantee even your cousin Vinny will offer to take the kids.”

By Dee Lee, Where There’s a Will, There’s A Way, August 27, 2015

 

 

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.

Health Care Representatives for Minor Children

It’s the stuff of parents’ worst anxieties when headed out of town for business or vacation, leaving their minor children at home in the care of a friend of family — their child is injured or becomes sick in their absence. Imagine, leaving with your spouse on a long-planned vacation, many states away or even out of country, leaving your children safely in the care of beloved grandparents. But, life happens, and one child breaks his arm at baseball practice, while you are thousands of miles away and cannot immediately return home. Grandma takes your son to the hospital, where all but necessary emergency treatment is denied because Grandma does not have legal authority to grant treatment on behalf of your minor child. You call the hospital in attempt to authorize treatment, but unfortunately, the hospital will not accept your verbal authorization, requiring a written authorization, properly executed and witnessed. After many phone calls, a faxed authorization form, and locating witnesses in your hotel lobby, hours after the accident you occurred, you finally get the documentation required by the hospital to proceed with treating your son. Unfortunately, I have heard first-hand stories of a real life occurrences of this very scenario.

This anxiety producing scenario can be avoided with advanced planning. Execute an Appointment of Health Care Representative for Minors, authorizing a trusted family member or care giver to make health care decisions in the event that you can not make these decisions for your minor child. I recommend that parents with minor children consider including preparation of an Appointment of Health Care Representative for Minors as part of their estate planning package.

My Child is 18 Years Old! Estate Planning for Young Adults

Having a child attain the age of 18 brings with it the legal age of majority and autonomy in her decisionmaking.  One aspect of this age of “adulthood” that may not be readily apparent to both the now-adult child and her parents is the immediate loss of the parents’ ability to serve as a decisionmaker.  Simply stated, as the “child” is now an adult, the young adults’ parents no longer have access to and ability to serve as a financial or medical decisionmaker for their child.  As this article explains, this can have serious implications in the case of an adult child who becomes incapacitated for any reason — illness or accident — even of a temporary nature.  Well planned parents and their adult children should consider getting, at a minimum, incapacity planning documents in place, which includes an Appointment of Health Care Representative and Power of Attorney document.

Estate Planning for Parents of Young Children

This is a topic of much passion for me.  Estate planning is a necessary protection for all parents with minor children.  Yet, national surveys reveal that less than 40 percent of Americans with children under the age of 18 have their estate planning documents in place.  (LexisNexis 2011 EZLaw Survey).

As a parent with young children myself, I understand that it may seem impossible to find the time to meet with a lawyer and get estate planning documents in place.  Life is busy!  Estate planning often seems like something that can wait to another, less hectic time.  Or, some parents, especially those with young children and just beginning their careers, feel that they have not yet accumulated sufficient assets to warrant the need for such a plan.  And, if I’m being honest, although I personally find estate planning to be a topic of great interest, most people do not particularly enjoy the topic or find it unsettling.  Who wants to talk about planning for death?

Estate planning is necessary!  It is as important as the other basic protections we have in place for our children and loved ones.  Here’s why:

1. Avoiding Intestate Distribution.  You likely do not want your Estate distributed according to the “intestate” or default distribution plans put in place by Indiana Probate law.

2.  Naming a Guardian For Minor Children.  You will want to name an individual(s) to care for your children in the event that both parents should pass.  In the absence of a written appointment by the minor’s parents (through a Last Will & Testament or other document), the Court will select a Guardian, most likely choosing among surviving family members who seek the appointment, and without the benefit of instruction from the child’s parents.

3.  Putting in Place a Plan to Manage Your Children’s Inheritance.  If something should happen to you (and your spouse) while your children are minors, you will want to put into place a trust to manage and distribute your children’s inheritance.  Without such a plan, the Court will appoint a custodian to manage the money while your child is a minor and, in most cases, your child will receive her inheritance outright at the age of 18.  Planning with trusts will allow you to put in place the management of your child’s inheritance until ages you determine are appropriate for distributions, holding it in trust beyond the age of 18.  In addition to managing and investing the inheritance funds, the trustee will use the inheritance to provide for your child’s care, support and education until the ages of distribution.

4. Planning with Beneficiary Designations.  An estate planning lawyer will help you set up your beneficiary designations to fully take advantage of trusts you put in place for the protection of your minor children.  Without such properly worded designations, your children will receive assets such as life insurance, 401(k)s, and IRAs, outright at the age of 18, and not protected by trust.

5.  Planning for Incapacity.  In addition to protecting your family in the event of death, an estate plan should also include incapacity planning documents, including a General Durable Power of Attorney, Living Will, and Appointment of Health Care Representative.  If you should become disabled or incapacitated, these documents will be essential to the continued function of your family and eliminate the public and potentially expensive and time-consuming process of a guardianship.

6.  Other Concerns.  A solid estate plan (and counsel of an estate planning attorney) affords other protections.  Additional topics that may be relevant to you and your family include Federal Estate Tax, avoidance of probate, second (or subsequent) marriages, blended families, children with disabilities requiring long-term care, and capital gains/income tax planning.

 

Estate Planning and Our Four Legged Friends

Yesterday I visited Indianapolis’s Cat Haven, a wonderful local non-profit that provides homes for abandoned cats.  Many of these cats are elderly (10 years old or older), which gave me pause to consider how a cat that age would end up abandoned.  It seems likely to me that those animals may very well have been loved by an owner who passed away, leaving no one to care for the beloved pet.

High-profile estates, such as Joan Rivers, often provide for well-funded pet trusts.  However, planning for your pet to be cared for upon your death does not  require large sums of money, great wealth, or celebrity.  Pet Trusts are legally-enforceable instruments under Indiana law.  You can set aside a certain sum of money to provide for your pet(s) in a Pet Trust, designating a person or persons to care for your pet(s) and providing funds for your pet’s welfare.  Upon your pet’s death, you can direct for any remaining Pet Trust funds (not used for your pet’s benefit during his lifetime) can be distributed to your human beneficiaries or charities.  Even if you do not wish to provide for a Pet Trust, your Last Will and Testament is an ideal place to identify the person(s) who will care for your pet after your death.   I enjoy assisting estate planning clients with Pet Trusts and planning for beloved pets and would be happy to answer questions about planning for pets.

Here are some additional sources of information about planning for a pet’s care in the event of the owner’s death:

Humane Society of the United States: Providing For Your Pet’s Future Without You

ASPCA: Planning for your Pet’s Future

Prof. Gerry W. Beyer: Frequently Asked Questions About Pet Trusts

 

 

Joan Rivers and End of Life Planning

Fellow legal bloggers Danielle and Andy Mayoras (find them here and here) have a great article today about end-of-life lessons to be learned from Joan River’s passing.  All estate plans should include planning for incapacity and end-of-life decision making.  The Mayoras’ article excellently explains why this is so important.

As they explain:  “Too many people think that estate planning is all about wills and trusts.  Far from it, end of life planning is often more important.  In fact, every adult over the age of 18 needs to have some type of advance directive in place.”   The consequences of not having such documents and place, can include a public and invasive guardianship proceedings through the courts, in order for the family to be legally appointed the decision makers.  In the case of facing an end of life decision, such as in Joan Rivers’ example, this process could be particularly painful and compound the grieving process of the family forced to make such decisions.  (Can you imagine the pain of having to go to court to obtain a guardianship while your loved one is near life’s end?)  Further, as the Mayoras explain, the guardianship process “can set the stage for a nasty family fight if people disagree on termination of life support (Terri Schiavo being a prominent example), or even a complete refusal to allow the life support to end, if the patient’s wishes were never reflected in writing.”

Bottom line: incapacity planning, including appointing a decisionmaker and stating your end-of-life wishes through a Living Will, are essential to any solid estate plan.  Such planning is an invaluable gift to yourself and your loved ones.

Estate Planning Beyond Documents

See the New York Times today for an article titled There’s More to Estate Planning Than the Will.  It is an excellent article and well worth the read.  I agree with the conclusion that documents are not enough.  While it is truly a gift to your family and loved ones to have all of your documents in place and up to date, the gift of well organized affairs — paperwork, passwords, records all in one place and organized — cannot be overstated.   I have seen firsthand the relief and deep appreciation of surviving family members when their deceased loved one has left everything “all in order.”  It is a true gift.

The article describes the book by author Erik A. Dewey.  His Big Book of Everything can be downloaded for free here.  What a nice gift!  His form, or a similar one, could be a good place to start — in addition to estate planning documents — to “get your affairs in order.”