Power of Attorney

Estate Planning 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 shows 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.

elderly couple ARAG members
Getting married for the second time? Don’t forget to review your estate planning documents.

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 estate planning 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”

Kids Grown Up? Protect Adult Children with These Three Documents

Without the right documents in place, you do not have the legal right to protect your own children once they turn 18, says The National Law Review in an unsettling but must-read article titled “Three Critical Legal Documents Every Parent Should Get in Place Now to Safeguard Their Adult Children.”

There are only three documents needed to protect adult children and they are fairly straightforward. There is no reason not to have them in place. If your adult child was incapacitated by an accident or an illness, you would want to speak with the medical staff to find out how they are and what decisions need to be made. Whether you were making a phone call or arriving at the hospital, a nurse or doctor would not be permitted to speak with you about your own adult child’s condition or be inv

Protect Your Adult Children
Without basic planning you can’t make decisions for your adult children or even speak with their healthcare providers.

olved with making any medical decisions.

It sounds unreasonable, and perhaps it is, but that is the law. There are steps you can take to ensure that you are not in this situation.

HIPAA Authorization Form gives you the authority to speak with healthcare providers about your adult children. This is a federal law (Health Insurance Portability and Accountability Act of 1996) that safeguards who can access an adult’s private health data. HIPAA prevents healthcare providers from revealing any information to you or anyone else about a patient’s status. The practitioners could face severe penalties for violating HIPAA.

This is why you want to have a HIPAA authorization signed by your adult child and naming you as an authorized recipient.  This will give you the ability to ask for and receive information about your child’s health status, progress and treatment. This is especially important, if your child is unconscious or in an unresponsive state. The alternative? Going to court. That’s not what you want to be doing during a health emergency.

A Healthcare Power of Attorney needs to be in place to protect adult children, so you can be named his or her “medical agent” and have the ability to view their medical records and make informed decisions on their behalf. Without this (or a court-appointed guardianship), healthcare decisions will be in the hands of healthcare providers only. That’s not a bad thing, if you implicitly trust your child’s doctor. However, if your child is incapacitated in an out-of-town hospital with healthcare providers you don’t know, you will want to be able to make decisions on his or her behalf.

Note that physicians prefer a single medical agent, not a handful. The concern is that if time is a critical factor and a group of family members do not agree on care, it may compromise the healthcare services that can be provided. You can name multiple agents in priority order. A mother might be listed as the medical agent, and if she is unable or unwilling to serve, the second person would be the father.

The third document needed to protect adult children is a General Power of Attorney. This would give you the right to make financial decisions on your child’s behalf, if they were to become incapacitated. You would have the legal right to manage bank accounts, pay bills, sign tax returns, apply for government benefits, break or apply a lease and conduct activities on behalf of your child. Without this document, you won’t be able to help your child without a court-appointed conservatorship.

Keep in mind, to properly protect adult children these documents need to be updated every few years. If you try to use an older document, the bank or hospital may not accept them. Your adult child also has the ability to revoke these documents at any time, just by saying they revoke them or by putting it in writing. If you have an adult child living out of state, you want to have these documents prepared for your home state and their state of residence.

Finally, this is not a time to download forms and hope for the best. An estate planning attorney will know more specifically what forms are used in your state and help you make sure that they are prepared correctly.

Reference: The National Law Review (Feb. 11, 2019) “Three Critical Legal Documents Every Parent Should Get in Place Now to Safeguard Their Adult Children”

Be Careful Granting Power of Attorney

Power of Attorney abuse has emerged as a serious problem for elderly people who are vulnerable to people they trust more than they should, reports the Sandusky Register in the article “Consumer beware: Understanding the powers of a Power of Attorney” The same is true for a Durable Power of Attorney for Health Care document, which should be of great concern for seniors and their family members.

Care should be taken when choosing an agent to act in your behalf

This illustrates the importance of a Power of Attorney document: the person, also known as the “principal,” is giving the authority to act on their behalf in all financial and personal affairs to another person, known as their “agent.” That means the agent is empowered to do anything and everything the person themselves would do, from making withdrawals from a bank account, to selling a home or a car or more mundane acts, such as paying bills and filing taxes.

The problem is that there is nothing to stop someone, once they have Power of Attorney, from taking advantage of the situation. No one is watching out for the person’s best interests, to make sure bank accounts aren’t drained or assets sold. The agent can abuse that financial power to the detriment of the senior and to benefit the agent themselves. It is a crime when it happens. However, this is what often occurs: seniors are so embarrassed that they gave this power to someone they thought they could trust, that they are reluctant to report the crime.

Similarly, an unchecked Health Care Power of Attorney can lead to abuse, if the wrong person is named.

The following is a real example of how this can go wrong. An adult child arranged for their trusting parent to be diagnosed as suffering from dementia by an unscrupulous psychiatrist, when the parent did not have dementia.

The adult child then had the parent admitted into a nursing home, misrepresenting the admission as a temporary stay for rehabilitation. They then kept the parent in the nursing home, using the dementia diagnosis as a reason for her to remain in the nursing home.

The parent had to hire an attorney and prove to the court that she was competent and able to live independently, to be able to return to her home.

Meet with an experienced estate planning attorney to discuss your situation and figure out who might become named as Power of Attorney and Health Care Power of attorney on your behalf. The attorney will be able to help you make sure that your estate plan, including your will, is properly prepared and discuss with you the best options for these important decisions.

Reference: Sandusky Register (Feb. 5, 2019) “Consumer beware: Understanding the powers of a Power of Attorney”

Suggested Key Terms: Power of Attorney, Health Care, Principal, Agent, Elder Abuse, Estate Planning Attorney,

What Parents of Minor Children Need to Know About Writing a Will?

Who wants to think about their own mortality? No one. However, it’s a fact of life. Failing to plan for your eventual passing by preparing a will — especially for parents of minor children — can result in issues for your loved ones. If you die without a will, it can mean conflict among your survivors, as they attempt to see how best to divide up your assets.

Naming a guardian is the most important thing you can do

Fatherly’s recent article, “How to Write a Will: 8 Tips Every Parent Needs to Know” says that families can battle over big assets like cars to small assets like a collection of supposedly rare books. They can fight over anything and everything. So, remember to prepare and sign a last will and testament to dispose of your property the way you want.

Dying without a will means your estate will be disposed of according to the intestacy laws in your state. That could leave your loved ones in the lurch that you may have wanted to provide for. For instance, in some states, your spouse may only get half your estate, with the remainder going to your children.

Writing a will is essential, and you should not try to do it yourself. Instead, hire an experienced estate planning lawyer. Along with this, keep these items in mind.

Plan for Every Scenario. When doing your estate planning, consider the various scenarios and contingencies that can happen after you’re gone. A well prepared will includes when and where you want your assets to go. Be wise in how to distribute your assets, to whom they will be going and the timing.

Family Dynamics. You must be very specific when drafting up a will, especially if family circumstances are unique, such when there are children from previous marriages who aren’t legally adopted by a spouse. They could be disinherited. Work with an attorney to make sure they receive what you intend with specific details. If you and your partner aren’t legally married, your significant other could find himself or herself disinherited from your assets after you’re dead.

Designating Your Children’s Guardian. Naming a guardian is the single most important thing that parents of minor children can do.  If you don’t name a guardian for your children (in cases of either single parenthood or where both parents pass away), the state will determine who will raise your children.

Specificity. Your will is a chance to say who gets what. If you want your brother to get the baseball card collection, you should write it down in your will or it’s not enforceable. In some states, including Florida, you can attach a written list of these personal items to your will.

Health Care. Begin planning your will when you’re healthy so that, in the event of disaster, you will have a financial power of attorney and a health care agent in place. If you become too ill to make decisions yourself, you’ll need to appoint someone to make those decisions for you.

Rules for Parents of Minors. Minors can own property, but they’ll have no control over it until they turn 18. If parents leave their home to their minor child, the surviving spouse will have issues if they want to sell it. Likewise, if a child is named the beneficiary of a life insurance policy, IRA, or 401(k), those assets will go into a protected account.

Don’t Do It Yourself. This cannot be over-emphasized. It’s tempting to create a will from a generic form online. But this may be a recipe for disaster. If your will is drafted poorly, your family will suffer the consequences. Generic forms found online are just that—generic. Families are not generic. Work with an experienced estate planning attorney to help you address your unique family needs.

Visit the Mastry Law website for a free copy of our report A Parent’s Guide to Protecting Your Children Through Estate Planning.

Reference: Fatherly (February 6, 2019) “How to Write a Will: 8 Tips Every Parent Needs to Know”

Market Volatility Got You Worried? Here’s Something You Can Control

When investors are faced with turbulent markets, there’s a human response to want to do something—sometimes, anything. We’re hardwired to try to take control. That doesn’t always help us make the best investment decisions. However, as reported in this Daily Camera’s article, there is something that you can do that may make you feel better: “Freaked out about the market? Resolve to get your estate in order.”

If you care about your health care, financial affairs, minor children and even your beloved pets, this is an important task to take care of. An estate plan includes legal documents that help you, when you are living and helps your heirs, when you die. In addition to a will, powers of attorney that will give your loved ones the ability to manage your affairs, if you become incapacitated. An updated will ensures that your assets go to the inheritors you chose. Don’t forget your beneficiaries.

Your beneficiaries are the people who are named on several accounts and life insurance policies. You may have named people on investment accounts, life insurance policies, IRAs, bank accounts, annuities and other assets. If you have not done a full review of those documents in a while, you want to take care of this right away. Life and relationships change over time, and the people you originally named as your beneficiaries, may no longer be the ones you would select today. Note that any changes must be made while you are living—when you are passed, the beneficiaries receive the asset, regardless of what is written in your will.

If you’re not sufficiently motivated to make an appointment with an estate planning attorney, you should be aware that if you don’t have a will, the laws of your state will determine who gets your assets and even, lacking a will that names a guardian, who rears your minor children. You may or may not be a fan of court proceedings, but if you don’t have a properly prepared will, the court is going to be making a lot of decisions on your behalf.

Contact an estate planning attorney to begin the process of putting your affairs in order. An attorney whose practice focuses in this area of the law, is most likely a better choice than one who does wills on the side. There are many complex laws in estate planning, and there are many opportunities available to make the most out of your assets and grow your legacy. An estate planning attorney will know what will work best for you and your family.

Reference: Daily Camera (Jan. 6, 2019) “Freaked out about the market? Resolve to get your estate in order”

Get These Three Estate Planning Documents In 2019

These may not be the first things you are thinking about as we launch into a brand-new year, but the idea is not to wait until you’re not thinking clearly or when it’s too late and you don’t have what you need to protect yourself, your family and your property. The details, from the Fox Business news article, “3 financial documents everyone needs,” are straightforward. Put this on your to-do list today.

A Will. The essential function of a will is to ensure that your wishes are carried out, when you are no longer alive. It’s not just for rich people. Everyone should have a will. It can include everything from your financial assets to life insurance, family heirlooms, artwork and any real estate property.

A will can also be used to protect your business, provide for charities and ensure lifelong care for your pets.

If you have children, a will is especially important. Your will is used to name a guardian for your minor children. Otherwise, the state will decide who should raise your children.

Your will is also used to name your executor (referred to as the Personal Representative in Florida). That is the person who has the legal responsibility for making sure your financial obligations are honored and your assets are distributed according to your wishes. Without an executor, the state will appoint a person to handle those tasks.

An Advanced Medical Directive. What would happen if you became ill or injured and could not make medical decisions for yourself? An advanced medical directive and health care proxy are the documents you need to assign the people you want to make decisions on your behalf. The advanced medical directive, also called a living will, explains your wishes for care, including end-of-life care. The healthcare proxy appoints a person to make healthcare decisions for you. As long as you have legal capacity, these documents aren’t used, but once they are needed, you and your family will be glad they are in place.

A Durable Power of Attorney. This document is used to name someone who will make financial decisions if you are not able to do so. Be careful to name a person you trust implicitly to make good decisions on your behalf. That may be a family member, an adult child or an attorney.

Once you’ve had these documents prepared as part of your estate plan they documents should be reviewed and updated every now and then. Life changes, laws change and what was a great tax strategy at one point may not be effective, if there’s a change to the law. Your estate planning attorney will help create and update your estate plan.

Reference: Fox Business (Dec. 19, 2018) “3 financial documents everyone needs”

Choose Power of Attorney Agents Wisely

For nearly four years, John Jerome O’Hara took charge of his mother’s care at a Kentucky nursing home. She suffered from Alzheimer’s disease.

O’Hara gained power of attorney over her affairs in June 2014. He was expected to manage thousands of dollars in income a month. In addition, O’Hara was supposed to use that income for his mom’s living expenses at Wesley Manor in Louisville.

However, reports The Washington Post in the article “He had power of attorney over his Alzheimer’s-afflicted mother—and stole $332,000, grand jury says,” for nearly four years, O’Hara robbed his mother instead. The charges contained 18 counts—ten of bank fraud, four of wire fraud and four of “access device fraud.”

The charges carry a maximum of several lifetimes in prison, the indictment said.

Each bank fraud count carries a maximum of 30 years in prison. In addition, there’s the potential for hefty fines and restitution.

O’Hara took the funds, in part, by writing checks to himself, according to the indictment.

He also wrote checks out to cash or signed “POA” for power of attorney. He withdrew money from her bank accounts to use for his expenses, prosecutors allege.

O’Hara’s alleged theft left a trail of financial distress, which was clear to investigators. Most significantly, he failed to pay his mother’s living expenses, the indictment said. This forced other family members to pay more than $100,000 to keep her cared for at the nursing home.

In addition, O’Hara left other obligations unpaid. He missed mortgage payments at his mother’s home in Lexington, the indictment said, and the home was foreclosed in March, as a result.

Reference: The Washington Post (December 9, 2018) “He had power of attorney over his Alzheimer’s-afflicted mother—and stole $332,000, grand jury says”

Here’s More Insight into Why Estate Planning is Critical

Fox 5 NY says in the article “Why estate planning is important regardless of your age or wealth” that this is great time to begin talking to your loved ones about estate planning, especially older relatives and parents.

The key to a successful discussion depends upon the right approach.

Try to always make suggestions, rather than demands. One great way to start the conversation with family members, is to mention what you’re doing. You might say something like, “I just took care of my own estate planning. Have you done anything? Maybe we should talk about it.” That might get the conversation rolling.

Many people believe that, as they get older, they need a will. However, that’s just one piece of the puzzle: core estate planning includes a will, power of attorney, health care surrogate and asset protection.

For most of us, the asset we most want to protect is our home. One of the best ways to do that is through a trust. Depending upon the type of trust you use, it may also have tax advantages, could protect your home during a healthcare crisis and protect your home from your children’s creditors.

You also need to find people you trust to help with finances and health care. A power of attorney is a legal document in which you grant a person the authority to handle finances on your behalf.

Similarly, a healthcare surrogate is an individual who makes healthcare decisions, if you get sick or are in an accident and can’t make decisions for yourself.

You can use one person to do both or separate individuals for each role. You can opt for a family member or a trusted friend. However, either way it should probably be a younger person, who won’t be dealing with the same aging issues as you.

You should also note that your will doesn’t cover everything. Make certain that any beneficiaries designated in your retirement plans or life insurance and any additional names on joint bank accounts are current. The beneficiaries you appointed by a designation form will get the money in those accounts, no matter what it says in your will.

If all of this sounds a bit complex, don’t worry because an experienced estate planning or elder law attorney can help you with all of the forms and all of your questions. Just understand these three things before you visit an elder law firm: your assets, whose names are on the accounts and your wishes.

Reference: Fox 5 NY (December 12, 2018) “Why estate planning is important regardless of your age or wealth”

Here’s Why You Need an Estate Plan

It’s always the right time to do your estate planning, but it’s most critical when you have beneficiaries who are minors or have special needs, says the Capital Press in the recent article, “Ag Finance: Why you need to do estate planning.”

While it’s likely that most adult children can work things out, even if it’s costly and time-consuming in probate, minor young children must have protections in place. Wills are frequently written, so the estate goes to the child when he reaches age 18. However, few teens can manage big property at that age. A trust can help, by directing that the property will be held for him by a trustee or executor until a set age, like 25 or 30.

Probate is the default process to administer an estate after someone’s death, when a will or other documents are presented in court and an executor is appointed to manage it. It also gives creditors a chance to present claims for money owed to them. Distribution of assets will occur only after all proper notices have been issued, and all outstanding bills have been paid.

Probate can be expensive. However, wise estate planning can help most families avoid this and ensure the transition of wealth and property in a smooth manner. Talk to an experienced estate planning attorney about establishing a trust. Individuals can name themselves as the beneficiaries during their lifetime, and instruct to whom it will pass after their death. A living trust can be amended or revoked at any time, if circumstances change.

With a trust, it makes it easier to avoid probate because nothing’s in an individual’s name, and the property can transition to the beneficiaries without having to go to court. Living trusts also help in the event of incapacity or a disease, like Alzheimer’s, to avoid conservatorship (guardianship of an adult who loses capacity). It can also help to decrease capital gains taxes, since the property transfers before their death.

If you have minor children, an attorney can help you with how to pass on your assets and protect your kids.

For more information about how to best protect your minor children, download a copy of Mastry Law’s FREE report, A Parent’s Guide to Protecting Your Children Through Estate Planning.

Reference: Capital Press (December 20, 2018) “Ag Finance: Why you need to do estate planning”

Get Estate Planning Details Done in 2019

Are you ready to resolve some of the things in 2019 that you really, really, did plan on doing in 2018? This article from the Pittsburgh Post-Gazette, “As a new year closes in, resolve to get those pesky estate details resolved,” offers to act as a reminder—or a kick in the pants—to get you to take care of these frequently overlooked estate planning details.

Health Care Plans. If you’ve got health care issues or a chronic condition, get your advance directive for health care done. The name of the documents vary by state (in Florida they’re called a Designation of Healthcare Surrogate and a Living Will), but whatever you call it, work with your estate planning attorney to create the documents that convey your wishes, if and when you are not able to communicate them yourself. That means your end of life wishes, so if you end up in the hospital’s intensive care unit your family or health care providers aren’t making decisions based on what they think you might have wanted, but what you have actually declared that you want.

Power of Attorney for Financial Affairs. You’re not giving up any power or control over your finances in having this created. Instead, you are preparing to allow someone to act on your behalf for financial matters, if for some reason you are unable to. Let’s say you become injured in an accident and are in the hospital for an extended period of time. How will your bills be paid? Who will pay the mortgage?

For both of these documents, talk with the people you want to name first, and make sure you are both clear on their responsibilities. Have at least one backup, just in case.

A will and if appropriate, trusts. If you don’t have a will or a trust, why not? Without a will, the state’s laws determine who will receive your assets. Your family may not like the decisions, but it will be too late. Speak with an experienced estate planning attorney to get your will and other documents properly prepared.

Check how your assets are titled. Are they in your name only, jointly titled, etc.? If you have trusts, have you retitled your assets to conform to the trusts? If you have beneficiaries on certain accounts, like life insurance policies and 401(k)s, when was the last time you reviewed your beneficiaries? Don’t be like the doctor who did everything but check beneficiaries. His ex-wife was very happy to receive a large 401(k) account, and there was no recourse for his second wife of 30 years.

Make a list so assets can be located. To finalize these details, you’ll need a list of assets, account numbers and what financial institution holds them. The information will need to be gathered and then organized in a way so key people in your life—your spouse, children, etc.—can find them. Some people put them on a spreadsheet in their home computer, but if your executor does not have a password, they won’t be able to access them. If they are in a safe deposit box that only has your name, they won’t be accessible.

Reference: Pittsburgh Post-Gazette (Dec. 24, 2018) “As a new year closes in, resolve to get those pesky estate details resolved”

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