Guardian

When Do I Need a Power of Attorney?

Without a valid durable power of attorney, the answer to the question of “When do I need a Power of Attorney”, really depends on what documents need to be signed.

when do I need a Power of Attorney
One of the most common misconceptions in estate planning is that a power of attorney remains in effect after the principal passes away.

A power of attorney is a legal document signed by the “Principal,” granting the authority to another individual to make decisions on the Principal’s behalf. This document is only in effect during the lifetime of the Principal.

nj.com’s recent article on this topic asks “Who can sign for an incapacitated person if there’s no power of attorney?” The article noted that to have the authority to conduct financial transactions concerning the assets solely owned by the incapacitated person who failed to execute a power of attorney, a guardian will have to be appointed by the court.

A guardianship is a legal relationship established by the court, in which an individual is given legal authority over another when that person is unable to make safe and sound decisions regarding his or her person, or property.

If it’s not an emergency, a guardian also will need to be appointed to make medical decisions for an incapacitated person who hasn’t signed a health care proxy. This is a legal document that gives a surrogate the authority to make health care decisions for an incapacitated person. It will take effect, if the principal is incapacitated or unable to communicate. The agent will make decisions that reflect the wishes of the incapacitated individual.

It’s typically not necessary to be appointed as an agent under a power of attorney or health care proxy or legal guardian for another person to sign an assisted living or nursing home admissions contract or a Medicaid application.

However, prior to signing another person’s admissions contract, read the fine print to be certain that you don’t become responsible for the bills!

Talk with a qualified estate planning attorney to find out more about the power of attorney requirements in your state and to add this important document to your estate plan.

Reference: nj.com (July 22, 2019) “Who can sign for an incapacitated person if there’s no power of attorney?”

What Goes into an Estate Plan?

The thought of creating an estate plan can be intimidating, but this article from Brainerd Dispatch, “Navigating your estate plan,” wisely advises breaking down the process into smaller pieces, making it more manageable. By taking it step by step, it’s more likely that you’ll be comfortable getting started with the process.  The first step is understanding what goes into an estate plan.

What goes into an estate plan?
Deciding what goes into an estate plan that fits your life and accomplishes your goals should be done with the help of an estate planning attorney.

Start with Beneficiaries. This may be the easiest way to start. If you have retirement accounts, like IRAs, 401(k)s, 403(b)s or other retirement accounts, chances are you have already written down the name of the people you want to receive your assets after you pass away. The same goes for life insurance policies. The beneficiary designation tells who receives the assets on your death. You should also note that there are tax ramifications, if you don’t have a beneficiary. Your assets could become taxable five years after you die, without a named beneficiary.

Be aware that no matter what your will says, the name on your beneficiary designations on these accounts determines who gets those assets. You need to check on these from time-to-time to be sure the people you have named are still the people who you want to receive your accounts. You should review the designations every time you review your estate plan, which should be every three or four years.

You should also name a contingent beneficiary on all accounts that allow it.  The contingent beneficiary is the person who will receive the asset is the primary beneficiary is unable to receive it for any reason.

Where There’s a Will, There’s a Way. The will is a key ingredient that goes into an estate plan. It can be used to ensure that your family has the management assistance they need, and, if you have minor children, establish who will raise them is you’re unable to (in fact, a will is the only way you can name a guardian for your children.)

Not having a will leaves your family in a terrible position, where they will have to endure unnecessary expenses and added stress. Your assets will be distributed according to the laws of your state, and not according to your own wishes.

Directives for Difficult Times. Health care directives give your loved ones direction when a difficult situation occurs. If you become incapacitated, through an accident or serious illness, the health care directive tells your family members what kind of care you want—or do not want. You should also name a health care surrogate, so that a person can make medical decisions on your behalf if you’re unable to speak for yourself. Working with an estate planning attorney who is licensed in your state is is important for this item because different states have different laws concerning naming a healthcare surrogate and the decisions they can make.

In addition, you’ll need a financial power of attorney. This allows you to designate someone to step in and manage your finances in the case of incapacity. This is especially important if you are single, because otherwise a court may have to name someone to be your financial guardian.

What About Trusts? If you own a lot of assets or if your estate is complicated, a trust may be helpful. Trusts are legal entities that hold assets on behalf of your beneficiaries. There are many different types of trusts that are used to serve different purposes, from Special Needs Trusts that are designed to help families plan for an individual with special needs, to revocable trusts used to avoid probate and testamentary trusts, which are created only when you die. An estate planning attorney will know which trusts are appropriate for your individual situation.

Working with a qualified and experienced estate planning attorney will help you understand what goes into an estate plan that makes the most sense for you and accomplishes your goals.

Reference: Brainerd Dispatch (Aug. 11, 2019) “Navigating your estate plan”

Will the State Decide Who Gets Your Assets?

It’s something that everyone needs, but often gets overlooked. Estate planning makes some people downright uncomfortable. There’s no law that says you must have an estate plan—just laws that will determine how your property is distributed and who will raise your children if you don’t have a will.  So, will the state decide who gets your assets?

Will the state decide who gets your assets?
If you don’t have a will when you pass away, state laws will determine who gets your assets.

If you don’t at least have a last will and testament, state statutes will decide who gets your assets after you pass away.  Thats one of the biggest reasons planning is important, says WMUR 9 in a recent article “Money Matters: Estate planning,” if you want to be the one making those decisions.

An estate plan can be simple if you only own a few assets, or complicated if you have significant assets, more than one home or multiple investments. Some strategies are easier to implement, like a last will and testament. Others can be more complex, like trusts. Whatever your needs, an estate planning attorney will be able to give you the guidance that your unique situation requires. Your estate planning attorney may work with your financial advisor and accountant to be sure that your financial and legal plans work together to benefit you and your family.

The first step for any estate plan is to review your family finances, dynamics and assets.

  • Who are your family members?
  • How do you want to help them?
  • What do they need?
  • What is your tax picture like?
  • How old are you, and how good is your health?
  • Do you have minor children?  If so, who will care for them?

These are just a few of the things an estate planning attorney will discuss with you. Once you are clear on your situation, you’ll discuss overall goals and objectives. The attorney will be able to outline your options, whether you are concerned with passing wealth to the next generation, avoiding family disputes, preparing for a disability or transferring ownership of a business.

A last will and testament will provide clear, legal direction as to how your assets should be distributed and who will care for your minor children.

A trust is used to address more complex planning concerns. A trust is a legal entity that holds assets to be used for the benefit of one or more individuals. It is overseen by a trustee or trustees, who can be individuals you name or professionals.

If you create trusts, it is important that assets be retitled so the trust owns the assets and not you personally. If the assets are not retitled, the trust will not achieve your goals.

Some property typically has its own beneficiary designations, like IRAs, retirement accounts and life insurance. These assets pass directly to heirs according to the designation, but only if you make the designations on the appropriate forms.

Once you’re done with your estate plan, make a note on your calendar. Estate plans and beneficiary designations need to be reviewed every three to five years. Lives change, laws change and your estate plan needs to keep pace.

Don’t be left asking yourself whether the state will decide who gets your assets.  Take charge and work with an experienced estate planning attorney to make sure you are the one deciding who gets your assets and who will raise your children.

Reference: WMUR 9 (Aug. 1, 2019) “Money Matters: Estate planning”

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 attorney to help with your estate planning.

do i need an attorney to help me with my estate planning
There is a range of legal issues that should be considered when putting your estate plan together.

Here are some situations that may require special planning attention that an attorney can help you with:

  • 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 your own health care; or
  • You want 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 also want to have plans in place should you become incapacitated.

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

  • Making sure your family is taken care of when the time comes;
  • Providing financial security for your family;
  • Avoiding disputes among family members or business partners;
  • Giving to a charity;
  • Managing your affairs, if you become 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 name a guardian to raise your children if you can’t be there for them, 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”

Do I Need a Will?

Yahoo Finance’s recent article on this subject asks “Do You Really Need a Will?” As the article explains, without a will, you’ll be “intestate”—which means you’ll have no say in what happens to your assets and belongings once you pass away.

Do I need a will?
If you don’t have a will your assets will be distributed according to state law.

Many people ask the question, “Do I need a will?” Each state has its laws concerning the distribution of a person’s assets if they die without a will. These laws most likely won’t mesh with your personal wishes. If you don’t have a will, ask yourself why you don’t. Perhaps you think you don’t need one. However, more than likely you do. If you’re putting off starting this important estate planning task, here are some things to consider.

Just about everybody needs a will, but you definitely should have one if you’re married, you have minor children, you have real estate, or you have investments in the stock market. You should also have a will if you have possessions, such as cars, furniture, jewelry, paintings, and computers?

As far as your money and possessions, you probably have some thoughts as to who gets what. You may want to chip in on the education of some younger relatives or give specific pieces of jewelry to those who you know will appreciate them. If you have minor children, you probably have very definite ideas about who should be their guardians if you die.

With a will, you have control. Without a will, the state in which you live will distribute your assets according to its laws, regardless of your wishes.

After you pass away, there could be surprise money coming to you, and without a will, you have no control over where these funds go. Your estate could get some cash from returned security deposits, medical reimbursements, or refunds from utility companies. Furthermore, if you die in a car accident and there’s an insurance settlement, you have no say who gets those funds, which could be substantial.

You also need to think about your pets, and who would be the best person to care for your animals.

So, the answer to the question, “Do I need a will”, is almost certainly, yes.

Reference: Yahoo Finance (July 21, 2019) “Do You Really Need a Will?”

How Should Couples Begin the Process of Estate Planning?

About 17% of adults don’t think they need a will, believing that estate planning is only for the very wealthy. However, no matter how few assets it seems someone owns, completing a few documents can make a huge difference in the future.  Here’s how couples can begin the process of estate planning.

What should couples know about the estate planning process
Often, just getting started with the estate planning process is the most difficult part.

valuewalk.com’s recent article, “Couples: Here’s How To Start The Estate Planning Process” notes that although estate planning can seem overwhelming, taking inventory of assets is a great place to start.

Make a list of all your belongings valued at $100 or more, both inside and outside of the home. After that, think about how these assets should be divided among family, friends, churches or charities.

Drafting a will may be the most critical step in the estate planning process. A will serves as the directions for how assets are to be distributed, which can avoid unpleasant disputes.

A will can simplify the distribution of assets at your death, and it also provides instructions to your family and heirs.

A will can also set out directions for childcare, pet care, or any additional instructions or specifications.

Without a will in place, your assets will be distributed according to state law, rather than according to your wishes. Creating a will keeps the state from making decisions about how your estate is divided up—decisions you may not have intended.

Once you have your assets and beneficiaries set, see an experienced estate planning attorney and have your will drafted immediately. Hey, life is unpredictable.

Another important part of the process is to have a discussion with everyone involved to prevent any legal or familial disputes regarding the estate.

Failure of couples to start the estate planning process can lead to family fighting, misappropriated assets, court litigation and unneeded expenses. Get going!

Reference: valuewalk.com (July 22, 2019) “Couples: Here’s How To Start The Estate Planning Process”

How Do I Choose a Guardian in My Estate Plan?

Selecting a guardian to care for your minor child after you die isn’t a lot of fun. Who wants to think about a situation where their young children are left without their parents and live with friends or relatives? However, choosing a guardian in your estate plan to raise your children and manage their inheritance is crucial. If you don’t do it, the courts will make the decision for you.

choose a guardian in my estate plan
Choosing a guardian for your children is one of the most important decisions a parent will ever make.

U.S. News and World Report’s recent article “How to Choose a Guardian for Your Child” says that, at worst, forgetting to name a guardian can mean a long court proceeding. This can be expensive, cause stress in family relationships and put your children in guardianship limbo.

There are two types of guardianship to consider when deciding who will care for your children: guardian of the estate and guardian of the person.  The guardian of the estate is a person who’ll manage the minor child’s inheritance on their behalf. It’s a fiduciary responsibility, and this guardian must make sure he or she carefully and appropriately manages accounts, keeps receipts, reports back to the court and doesn’t comingle the child’s assets with his or her own. Another option is for a parent is to set up a trust and have a trustee manage the funds for the child. This can allow the parent more control over how and when money is distributed, especially if you anticipate leaving a substantial inheritance.

The guardian of the person is the daily caretaker who’ll make sure your child gets health care, educational, housing and has all other needs met.

These two guardians can be the same person or different people, depending on the skills and abilities of your family members and friends. A separate person managing the estate can provide a series of checks and balances that can help, if you are concerned about the misuse of your child’s funds.

You may want the guardian of the estate to have good money-management skills. The guardian of the person may be someone who shares your same values, has the energy to raise a child, and is close by so that your child doesn’t have to lose the familiar comforts of their school and neighborhood.

You should also name backup guardians, in the event that the primary guardian is unable or unwilling to take on the responsibility. You should also be sure to speak with your guardians ahead of time and make certain they understand the responsibility and are willing to take on the task of helping care for your children, if you pass away.

In most states, you’ll need to name your guardian or guardians as part of your will.

Talk to an experienced estate planning attorney with any questions and draft a legal will with the terms of guardianship included, along with a power of attorney and health care proxy. If you need to create a trust for your child(ren), don’t forget to fund it.

Reference: U.S. News and World Report (June 4, 2019) “How to Choose a Guardian for Your Child”

Here’s Why a Basic Form Doesn’t Work for Estate Planning

It’s true that an effective estate plan should be simple and straightforward, if your life is simple and straightforward. However, few of us have those kinds of lives. For many families, the discovery that a will that was created using a basic form is invalid leads to all kinds of expenses and problems, says The Daily Sentinel in an article that asks “What is wrong with using a form for my will or trust?”  

Basic Estate Planning Forms
Online estate planning forms often lead to more problems and expense that they’re worth.

If the cost of an estate plan is measured only by the cost of a document, a basic form will, of course, be the least expensive option — on the front end. On the surface, it seems simple enough. What would be wrong with using a basic estate planning form like a will or a power of attorney?

Actually, a lot is wrong. The same things that make a do-it-yourself, basic form seem to be attractive, are also the things that make it very dangerous for your family. A basic estate planning form does not take into account the special circumstances of your life. If your estate is worth several hundreds of thousands of dollars, that form could end up putting your estate in the wrong hands. That’s not what you had intended.

Another issue: any form that is valid in all 50 states is probably not going to serve your purposes. If it works in all 50 states (and that’s highly unlikely), then it is extremely general, so much so that it won’t reflect your personal situation. It’s a great sales strategy, but it’s not good for an estate plan.

If you take into consideration the amount of money to be spent on the back end after you’ve passed, that $100 will becomes a lot more expensive than what you would have invested in having a proper estate plan created by an estate planning attorney.

What you can’t put into dollars and cents, is the peace of mind that comes with knowing that your estate plan, including a will, power of attorney, and health care power of attorney, has been properly prepared, that your assets will go to the individuals or charities that you want them to go to, and that your family is protected from the stress, cost and struggle that can result when wills are deemed invalid.

Here’s one of many examples of how the basic, inexpensive estate planning form created chaos for one family. After the father died, the will was unclear, because it was not prepared by a professional. The father had properly filled in the blanks but used language that one of his beneficiaries felt left him the right to significant assets. The family became embroiled in expensive litigation, and became divided. The litigation has ended, but the family is still fractured. This couldn’t have been what their father had intended.

Other issues that are created when basic estate planning forms are used: naming the proper executor, guardians and conservators, caring for companion animals, dealing with blended families, addressing Payable-on-Death (POD) accounts and end-of-life instructions, to name just a few.

Avoid the “repair” costs and meet with an experienced estate planning attorney in your state to create an estate plan that will suit your needs.

Reference: The Daily Sentinel (May 25, 2019) “What is wrong with using a form for my will or trust?”

What Should I Keep in Mind in Estate Planning as a Single Parent?

Most estate planning conversation eventually come to center upon the children, regardless of whether they’re still young or adults.  So what should you keep in mind in estate planning as a single parent?

Talk to a qualified estate planning attorney and let him or her know your overall perspective about your children, and what you see as their capabilities and limitations. This information can frequently determine whether you restrict their access to funds and how long those limitations should be in place, in the event you’re no longer around.

Kiplinger’s recent article, “Estate Planning for Single Parents” explains that when one parent dies, the children typically don’t have to leave their home, school and community. However, when a single parent passes, a child may be required to move from that location to live with a relative or ex-spouse.

After looking at your children’s situation with your estate planning attorney to understand your approach to those relationships, you should then discuss your support network to see if there’s anyone who could serve in a formal capacity, if necessary. A big factor in planning decisions is the parent’s relationship with their ex. Most people think that their child’s other parent is the best person to take over full custody, in the event of incapacity or death. For others, this isn’t the case. As a result, their estate plan must be designed with great care. These parents should have a supportive network ready to advocate for the child.

Your estate planning attorney may suggest a trust with a trustee. This fund can accept funds from your estate, a retirement plan, IRA and life insurance settlement. This trust should be set up, so that any court that may be involved will have sound instructions to determine your wishes and expectations for your kids. The trust tells the court who you want to carry out your wishes and who should continue to be an advocate and influence in your child’s life.

Your will should also designate the child’s intended guardian, as well as an alternate, in case the surviving parent can’t serve for some reason. The trust should detail how funds should be spent, as well as the amount of discretion the child may be given and when, and who should be involved in the child’s life.

A trust can be drafted in many ways, but a single parent should discuss all of their questions with an estate planning attorney.

Reference: Kiplinger (May 20, 2019) “Estate Planning for Single Parents”

Do I Need to Update My Estate Plan if I Relocate for Retirement?

Update my estate plan when I relocate
Anytime you relocate to another state you should have your estate planning documents reviewed to make sure they comply with the law in the state you’ve moved to.

Anyone who moves to another state, for retirement, a new job or to be closer to family, needs to have a look at their estate plan to make sure it is valid in their new state, advises the Boca Newspaper in the recent article “I’ve Relocated To Florida…Should I Update My Estate Plan?”  

If an estate plan hasn’t been created, a relocation is the perfect opportunity to get this important task done. Think of it as preparation for your new life in your new home.

Because so many retirees do relocate to Florida, there are some general rules that make this easier. For one thing, most wills that are valid in another state are recognized in Florida. There’s a specific law in the Florida statutes that confirms that “other than a holographic or nuncupative will, executed by a nonresident of Florida… is valid as a will in this state if valid under the laws of the state or country where the will was executed.”

In other words, if the estate plan was prepared by an estate planning attorney and is legally valid in the prior state, it will be valid in Florida. Exceptions are a holographic will, which is a handwritten will that is signed by the person with no witnesses, or a nuncupative will, which is a verbal statement made in front of witnesses.

However, just because your will is recognized in Florida, does not mean that it doesn’t need a review.

There are distinctions in Florida law that may make certain provisions invalid or change their meaning. In one well-known case, a will was missing one sentence—known as a “residual clause,” a catch-all that distributes assets that are otherwise not specified. The maker of the will wanted everything to go to her brother. However, without that one clause, property acquired after the will was created was not included. The court determined that the property that was acquired after the will was created, would go to other relatives, despite the wishes of the decedent.

Little details mean a lot when it comes to estate plans.

It’s important to ensure that the last will and testament properly expresses intentions under the laws of your new home state. As you review or begin the process, this might be the time to speak with your estate planning attorney about whether any trusts are applicable to your estate. A revocable living trust, for example, would avoid the assets placed in the trust having to go through probate.

This is also the time to review your Durable Power of Attorney, designation of a Health Care Surrogate, Living Will and nomination of a pre-need Guardian.

Estate planning gives peace of mind, knowing that the legal side of your life is all taken care of. It avoids stress and unnecessary costs and delays to your family. It should be reviewed and updated, if needed, at big events in your life, including a relocation, the sale or purchase of a home or when you retire.

Reference: Boca Newspaper (May 1, 2019) “I’ve Relocated To Florida…Should I Update My Estate Plan?”

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