Your Estate Plan Needs to Be Customized – Annapolis and Towson Estate Planning

The only thing worse than having no estate plan, is an estate plan created from a ‘fill-in-the-blank’ form, according to the recent article “Don’t settle for a generic estate plan” from The News-Enterprise. Compare having an estate plan created to buying a home. Before you start packing, you think about the kind of house you want and how much you can spend. You also talk with real estate agents and mortgage brokers to get ready.

Even when you find a house you love, you do not write a check right away. You hire an engineer to inspect the property. You might even bring in contractors for repair estimates. At some point, you contact an insurance agent to learn how much it will cost to protect the house. You rely on professionals, because buying a home is an expensive proposition and you want to be sure it will suit your needs and be a sound investment.

The same process goes for your estate plan. You need the advice of a skilled professional–the estate planning lawyer. Sometimes you want input from trusted family members or friends. There other times when you need the estate planning lawyer to help you get past the emotions that can tangle up an estate plan and anticipate any family dynamics that could become a problem in the future.

An estate planning attorney will also help you to avoid problems you may not anticipate. If the family includes a special needs individual, leaving money to that person could result in their losing government benefits. Giving property to an adult child to try to avoid nursing home costs could backfire, making you ineligible for Medicaid coverage and cause your offspring to have an unexpected tax bill.

Your estate planning lawyer should work with your team of professional advisors, including your financial advisor, accountant and, if you own a business, your business advisor. Think of it this way—you would not ask your real estate agent to do a termite inspection or repair a faulty chimney. Your estate plan needs to be created and updated by a skilled professional: the estate planning lawyer.

Once your estate plan is completed, it is not done yet. Make sure that the people who need to have original documents—like a power of attorney—have original documents or tell them where they can be found when needed. Keep in mind that many financial institutions will only accept their own power of attorney forms, so you may need to include those in your estate plan.

Medical documents, like advance directives and healthcare powers of attorney, should be given to the people you selected to make decisions on your behalf. Make a list of the documents in your estate plan and where they can be found.

Preparing an estate plan is not just signing a series of fill-in-the-blank forms. It is a means of protecting and passing down the estate that you have devoted a lifetime to creating, no matter its size.

Reference: The News-Enterprise (June 23, 2020) “Don’t settle for a generic estate plan”

 

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What Can a Strong Estate Planning Attorney Help Me Accomplish? – Annapolis and Towson Estate Planning

The Legal Reader’s recent article entitled “When Should I Start My Estate Planning?” explains that, as we settle down, we should start considering how we will provide for and protect those you love.

Talk to an experienced estate planning attorney—one with the knowledge and skill to help you design a workable, legally binding estate plan that will keep your assets safe as they accumulate, protect your spouse and children and consider the possibility that you may become incapacitated when you least expect it.

No matter what your age, the estate planning attorney you hire should have outstanding credentials and testimonials to his/her efficiency and personal concern.

This legal professional must be able to:

  • Listen, understand, and address your individual needs
  • Clarify your options
  • Draft, review, and file all necessary estate planning documents
  • Make certain your estate plan covers all contingencies; and
  • Is prepared to modify your documents as your life circumstances change.

When you see that the future is unpredictable, you realize that estate planning can help you make that future as secure as possible.

Estate planning can be as complicated as it is essential. Accordingly, regardless of our age, speak with a highly competent estate planning attorney as soon as possible.

As the COVID-19 pandemic has dramatically shown us, planning for the unexpected can never be addressed too soon.

Reference: Legal Reader (June 23, 2020) “When Should I Start My Estate Planning?”

 

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Should I Have an Advance Directive in the Pandemic? – Annapolis and Towson Estate Planning

Advance directive is a term that includes living wills and health care proxies or powers of attorney. These are legal documents we all should have. A living will allows you to tell your family and doctors the types of medical care you want at the end of your life. Health care proxies or powers of attorney let you name someone to make medical decisions for you, if you cannot communicate.

WTOP’s recent article entitled “Advance medical directives vital during COVID-19 pandemic” says that you need both because not all medical situations will trigger a living will. In fact, a living will is only really applicable, if you have an end stage process, a persistent vegetative state, or a terminal illness. People often run into a situation where they have a health event, but it is not something that is going to end in their death.

An estate planning attorney can draw up advance directives, when they are creating your estate plan.

When selecting the individual to grant the power to make decisions for you, consider who would be most capable of advocating for what you want, rather than what they, other family members or a medical provider might want. You should also name a backup in the event your first choice cannot serve and make sure these advocates understand your wishes. Give copies of the documents to them and go through what you want.

Your attorney will follow your state’s rules about how to make these documents valid, such as having witnesses sign or getting the paperwork notarized.

Next, keep the originals in a safe place at home, along with your will, and tell your family where to locate them. Your physician and attorney should also have copies.

Tell your doctor to add the forms in your electronic health record. That way, other medical providers can access it in an emergency. You should also carry a card in your wallet that has your health care agent’s name and contact information, as well as where you keep the originals and copies.

If your choices could cause stress for your family, consider including a note explaining your thinking. Even if they disagree with your decisions, it is more comforting to hear it directly from you, rather than the person you named to act on your behalf.

Reference: WTOP (June 1, 2020) “Advance medical directives vital during COVID-19 pandemic”

 

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Your Children Wish You Had an Estate Plan – Annapolis and Towson Estate Planning

It is the adult children who are in charge of aging parents when they need long-term care. They are also the ones who settle estates when parents die. Even if they cannot always come out and tell you, the recent article, “Why your children wish you had an Elder Law Estate Plan” from the Times Herald-Record spells out exactly why an elder law estate plan is so important for your loved ones.

Avoid court proceedings while living. In a perfect world, everyone over age 18 will have an advance directive, including a power of attorney, a health care proxy, and a living will. These documents appoint others to make financial, legal, and medical decisions, in case of incapacity. Without them, the children will have to get involved with time-consuming, expensive guardianship proceedings, where a judge appoints a legal guardian to make these decisions. Your life is turned over to a court-appointed guardian, instead of your children or another person of your choosing.

Avoid court proceedings after you die. If you die and assets are in your name alone, then your estate will go through probate, a court proceeding that can be time consuming and costly. Not having any assets in trusts leaves your kids open to the possibility of wills being challenged, disputes among family members and litigation that can drag on for years.

Wills in probate court are public documents. Trusts are private documents. Do you really want a stranger to access your will and learn about your assets?

An elder law estate plan also plans for the possibility of long-term care and costs. Nursing home care costs can run between $12,000—$18,000 per month. If you do not have long-term care insurance, you can create a Medicaid Asset Protection Trust (MAPT) that protects assets in the trust from nursing home costs, once the assets are in the trust for five years. The MAPT also protects assets from homecare provided by Medicaid, called “community” Medicaid, once the assets are in the trust for 30 months under a new rule that starts on October 1, 2020.

The “elder law power of attorney” has unlimited gifting powers that could save about half of a single person’s assets from the cost of nursing homes. This can be done on the eve of needing nursing home care, but it is always better to do this planning in advance.

Having a plan in place decreases stress and anxiety for adult children. They are likely busy with their own lives, working, caring for their children and coping in a challenging world. When a plan is in place, they do not have to start learning about Medicaid law, navigating their way through the court system, or wondering why their parents did not take advantage of the time they had to plan properly.

You probably do not want your children remembering you as the parents who left a financial and legal mess behind for the them to clean up. Speak with an elder law estate planning attorney to create a plan for your future. Your children will appreciate it.

Reference: Times Herald-Record (May 23, 2020) “Why your children wish you had an Elder Law Estate Plan”

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Do I Really Need a Health Care Proxy? – Annapolis and Towson Estate Planning

The Pauls Valley Democrat’s recent article entitled “Advance directives and living wills” explains that an Advance Directive has three parts:

  •  A living will
  •  Naming of your health care agent; and
  •  Your directions for anatomical gifts.

The individual that you name as your Health Care Proxy will make decisions for your treatment and care, if you are unable to do so. These decisions may extend to all medical issues and are not limited to end-stage, life determining decisions that are mentioned in your living will. This is a form of power of attorney that authorizes your agent to act in your behalf to address issues like these:

  1. Accessing your medical information
  2. Discussing your treatment options with your healthcare providers
  3. Getting second opinions on your diagnosis
  4. Selecting and authorizing various medical tests
  5. Your placement in a hospital or care facility
  6. Transferring your care to a new physician; and
  7. Communicating your wishes on life support in terminal or unconscious situations.

For end of life decisions, your health care proxy is bound by your written wishes as expressed in your living will. Life support can be terminated, only if you so authorize in writing. Your healthcare proxy cannot make that decision for you, because that is “personal” to you. You may select one or more persons to act as your proxy, although if two are selected, you should predefine what to do in the event of a conflict.

A best practice is to choose a person who is younger than you and who is geographically close. A person with time to assist you and with whom you are willing to share in advance your wishes, likes and dislikes as to medical care. This person should be trusted to act and honor your wishes.

Because many decisions relate to your very personal concerns about religion, death and dying, these feelings should be shared with your health care proxy before any serious situation.

The Advance Directive is a very important document that pertains to your wishes, as they relate to medical care, end-of-life and death.

Parts I and II can discuss your wishes for care treatment, as well as your choice of a person to represent your wishes. These are two very important issues. Take the time to consider the advance written expression of your own wishes.

Reference: Pauls Valley Democrat (Feb. 12, 2020) “Advance directives and living wills”

Sims & Campbell, LLC – Annapolis and Towson Estate Planning Attorneys

Why Is Estate Planning more Complicated with a ‘Gray Divorce’? – Annapolis and Towson Estate Planning

The increasing divorce rates among Americans over the age of 50 is a problem, because minimizing discord among beneficiaries is one of the top three reasons why people engage in estate planning.

The Clare County Review’s recent article entitled “Rising Gray Divorce Rates Are Making Estate Planning Problems More Complicated” notes that along with prolonged life expectancy and rising healthcare costs, this upward trend in couples divorcing after the age of 50 has created activity and interest in estate planning.

According to the CDC, the divorce rate in the United States is 3.2 per 1,000 people. The ‘first divorce rate,’ or the number of marriages that ended in divorce per 1,000 first marriages for women 18 and older, was 15.4 in 2016, according to research by the National Center for Family and Marriage Research at the Bowling Green State University. As noted earlier, black women experience divorce at the highest rate, 26.1 per 1,000, and the rate is lowest for Asian women at 9.2 per 1,000.  In Michigan, the current divorce rate is 9%, but Tennessee is way up at 43%.

Gray divorce is adding another level of complexity to estate planning that already happens with blended families, designation of heirs and changing domestic structures. Therefore, it is more crucial than ever to proactively review and discuss the estate plans with your estate planning attorney on an ongoing basis.

According to the TD Wealth survey, 39% of respondents said that divorce effects the costs of retirement planning and funding the most. Another 7% said that divorce impacts those responsible for enacting a power of attorney and 6% said divorce impacts how Social Security benefits will be determined.

It is important to communicate the estate plan with family members to reduce family conflict during the divorce process.

The divorce process is complicated at any age. However, for divorcing couples over the age of 50, the process can be especially tough because the spouse is frequently designated as a beneficiary on many, if not all, documents. Each of these documents will need to change to show new beneficiaries after the divorce has been finalized. It means that wills, trusts, retirement accounts, life insurance policies and listed assets will need to be revised.

Reference: Clare County Review (Feb. 10, 2020) “Rising Gray Divorce Rates Are Making Estate Planning Problems More Complicated”

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If Not Now, When? It is the Time for Estate Planning – Annapolis and Towson Estate Planning

What else could possibly go wrong? You might not want to ask that question, given recent events. A global pandemic, markets in what feels like free fall, schools closed for an extended period of time—these are just a few of the challenges facing our communities, our nation and our world. The time is now, in other words, to be sure that everyone has their estate planning completed, advises Kiplinger in the article “Coronavirus Legal Advice: Get Your Business and Estate in Order Now.”

Business owners from large and small sized companies are contacting estate planning attorney’s offices to get their plans done. People who have delayed having their estate plans done or never finalized their plans are now getting their affairs in order. What would happen if multiple family members got sick, and a family business was left unprotected?

Because the virus is recognized as being especially dangerous for people who are over age 60 or have underlying medical issues, which includes many business owners and CEOs, the question of “What if I get it?” needs to be addressed. Not having a succession plan or an estate plan, could lead to havoc for the company and the family.

Establishing a Power of Attorney is a key part of the estate plan, in case key decision makers are incapacitated, or if the head of the household cannot take care of paying bills, taxes or taking care of family or business matters. For that, you need a Durable Power of Attorney.

Another document needed now, more than ever: is an Advance Health Care Directive. This explains how you want medical decisions to be made, if you are too sick to make these decisions on your own behalf. It tells your health care team and family members what kind of care you want, what kind of care you do not want and who should make these decisions for you.

This is especially important for people who are living together without the legal protection that being married provides. While some states may recognize registered domestic partners, in other states, medical personnel will not permit someone who is not legally married to another person to be involved in their health care decisions.

Personal information that lives only online is also at risk. Most bills today do not arrive in the mail, but in your email inbox. What happens if the person who pays the bill is in a hospital, on a ventilator? Just as you make sure that your spouse or children know where your estate plan documents are, they also need to know who your estate planning attorney is, where your insurance policies, financial records and legal documents are and your contact list of key friends and family members.

Right now, estate planning attorneys are talking with clients about a “Plan C”—a plan for what would happen if heirs, beneficiaries and contingent beneficiaries are wiped out. They are adding language that states which beneficiaries or charities should receive their assets, if all of the people named in the estate plan have died. This is to maintain control over the distribution of assets, even in a worst-case scenario, rather than having assets pass via the rules of intestate succession. Without a Plan C, an entire estate could go to a distant relative, regardless of whether you wanted that to happen.

Reference: Kiplinger (March 16, 2020) “Coronavirus Legal Advice: Get Your Business and Estate in Order Now.”

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Do You Need a Revocable Trust? – Annapolis and Towson Estate Planning

A will lets you determine how your property will be distributed when you die, and a revocable living trust also accomplishes that task. However, the owner of the trust can make strict stipulations about how specific assets should be distributed, says Barron’s in the article “Revocable Living Trusts Can Help Your Heirs Avoid Probate. Here’s How They Work.” Another advantage of a revocable trust—avoiding probate, which gives the trust owner far more control over asset distribution.

Remember, probate is a process that takes place under the supervision of a judge in a court. Things do not always happen the way the decedent may have wanted.

It is best for individuals or couples with complex estate planning needs to meet with an estate planning lawyer, who will discuss whether a living trust is the right option. One question couples should ask: does it make sense for them to have a living will, and should it be a joint trust, or should it be two separate ones?

When a trust is created, it needs to be funded. Assets such as real estate, bank accounts, taxable non-retirement investment accounts all need to be retitled so they are owned by the trust. The person who creates the trust has no restrictions as to how the assets within the trust are used while they are alive. The trust can also be revoked during the owner’s lifetime, but it is more common for owners to make tweaks to the trust.

Trusts are very popular in states like California and Massachusetts, which have more restrictive probate laws than other states. Trusts are very good for people who own property in multiple states and would otherwise have to deal with probate in multiple states. Trusts are also excellent for people who wish to maintain privacy about their assets, since the trust’s contents remain private. A will, once it enters the probate process, becomes a public document.

Someone who does not own his or her own home and has limited assets may prefer to use a will, which is less expensive and simpler than a trust. Once they do own a home and have more extensive assets, they can always have a trust created.

A living trust is part of a larger estate plan. Other estate planning documents are still needed, including a durable power of attorney for finances, an advance health care directive, a nomination of guardianship for families with minor children and a living will.

People who have revocable trusts should ask their estate planning attorney about something called a “pour-over” will. This is a will that ensures that any assets accidentally left out of the trust are added to the trust after the death of the owner. If the majority of assets are in the trust, the probate of the pour-over will should be much simpler and there may even be a “fast-track” option for assets under a certain dollar level.

Reference: Barron’s (February 22, 2020) “Revocable Living Trusts Can Help Your Heirs Avoid Probate. Here’s How They Work”

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Creating an End-of-Life Checklist – Annapolis and Towson Estate Planning

Spend the energy, effort, and time now to consider your wishes, collect information and, most importantly, get everything down on paper, says In Maricopa’s recent article entitled “Make an end-of-life checklist.”

The article says that a list of all your assets and critical personal information is a guarantee that nothing is forgotten, missed, or lost. Estate planning attorneys can assist you and guide you through the process.

Admittedly, it is an unpleasant subject and a topic that you do not want to discuss, and it can be a final gift to your family and loved ones.

When you work with an experienced estate planning attorney, you can add any specific instructions you want to make that are not already a part of your will or other estate planning documentation. Make certain that you appoint an executor, one you trust, who will carry out your wishes.

Have ready for your attorney all of your vital, personal information. This should include your name, birthday, and Social Security number, as well as the location of key documents and items, birth certificate, marriage license, military discharge paperwork (if applicable), and your will, powers of attorney, medical directives, ID cards, medical insurance cards, house and car keys and details about your burial plot.

In addition, you need to let your family now about the sources of your income. This type of information should include specifics about pensions, retirement accounts, 401(k), or you 403(b) plan.

Be sure to include company and contact, as well as the account number, date of payment, document location, and when/how received.

You also need to include all medicine and medical equipment used and the location of these items.

And then double check the locations of the following items: bank documents, titles and deeds, credit cards, tax returns, trust and power of attorney, mortgage and loan, personal documents, types of insurance – life, health, auto, home, etc. It is wise to add account numbers and contact information.

Another area you may want to consider is creating a list of online passwords, in printed form, in a secure place for your family or loved ones to use to access and monitor accounts.

Be sure to keep your End-of-Life Checklist in a secure place, such as a safe or safety deposit box because it has sensitive and private information. Tell your executor where it is located.

Reference: In Maricopa (Feb. 14, 2020) “Make an end-of-life checklist”

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Planning for Long-Term Care Before It’s Too Late – Annapolis and Towson Estate Planning

Starting to plan for elder care should happen when you are in your 50s or 60s. By the time you are 70, it may be too late. With the national median annual cost of a private room in a nursing facility coming in at more than $100,000, not having a plan can become one of the most expensive mistakes of your financial life. The article “Four steps you can take to safeguard your retirement savings from this risk” from CNBC says that even if care is provided in your own home, the annual median national cost of in-home skilled nursing is $87.50 per visit.

There are fewer and fewer insurance companies that offer long-term care insurance policies, and even with a policy, there are many out-of-pocket costs that also have to be paid. People often fail to prepare for the indirect cost of caregiving, which primarily impacts women who are taking care of older, infirm male spouses and aging parents.

More than 34 million Americans provided unpaid care to older adults in 2015, with an economic value of $522 billion per year.

That is not including the stress of caring for loved ones, watching them decline and needing increasingly more help from other sources.

The best time to start planning for the later years is around age 60. That is when most people have experienced their parent’s aging and understand that planning and conversations with loved ones need to take place.

Living Transitions. Do you want to remain at home as long as is practicable, or would you rather move to a continuing care retirement community? If you are planning on aging in place in your home, what changes will need to be made to your home to ensure that you can live there safely? How will you protect yourself from loneliness, if you plan on staying at home?

Driving Transitions. Knowing when to turn in your car keys is a big issue for seniors. How will you get around, if and when you are no longer able to drive safely? What transportation alternatives are there in your community?

Financial Caretaking. Cognitive decline can start as early as age 53, leading people to make mistakes that cost them dearly. Forgetting to pay bills, paying some bills twice, or forgetting accounts, are signs that you may need some help with your financial affairs. Simplify things by having one checking, one savings account and three credit cards: one for public use, one for automatic bill-paying and a third for online purchases.

Healthcare Transitions. If you do not already have an advance directive, you need to have one created, as part of your overall estate plan. This provides an opportunity for you to state how you want to receive care, if you are not able to communicate your wishes. Not having this document may mean that you are kept alive on a respirator, when your preference is to be allowed to die naturally. You will also need a Health Care Power of Attorney, a person you name to make medical decisions on your behalf when you cannot do so. This person does not have to be a spouse or an adult child—sometimes it is best to have a trusted friend who you will be sure will follow your directions. Make sure this person is willing to serve, even when your documented wishes may be challenged.

Reference: CNBC (Jan. 31, 2020) “Four steps you can take to safeguard your retirement savings from this risk”

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