Estate Planning for Your Children

If you have minor children, estate planning is a very important step when it comes to planning for your death. Failing to name guardians for your children in your will can lead to custody issues that are easy to avoid by simply taking the time to decide who you want to take care of your minor children in the event of your death. Determining who will raise your children if you die can be a difficult decision. For this reason alone many parents avoid the issue of custody decisions since they’re unable to find someone who they think will be the perfect guardian.

Avoiding the issue of guardianship is the number one reason why people fail to plan their estate or have a will. By procrastinating the decision about custody parents put their children at risk in the event of their death. Unless you name a guardian the courts will name someone they feel is right for the role of guardian. And this could be someone who you least wanted to have custody of your children. Court battles for custody can be long and drawn out, especially if there is more than one applicant who is seeking custody. This can place a huge financial and emotional strain on your children as well as deplete the assets from your estate. The worst case scenario is that no one applies to take custody of your children. The courts may decide to give custody to someone in your family who really doesn’t want the responsibility or your children may end up in foster care.

When planning your estate try to choose guardians for your children who you know will want to take them. Don’t feel that you have to choose a family member; friends you trust can also be ideal candidates. Consider separating guardianship of your children from the assets of your estate. By naming someone other than the guardian to be the trustee of your children’s money you ensure that there are some checks and balances in place when it comes to deciding how that money is spent.

Always have a backup named for the guardian in the event that your first choice is unable to accept the role. Keep in mind that if you name a couple as the guardian the issue of their breakup may become an issue and this can lead to a legal battle for custody. For this reason alone it’s a good idea to name individuals as guardians. If you’re divorced, consider your ex-spouse as the guardian. Most of the time, your ex will want to have custody anyway. Why make it more difficult by naming someone else as guardian and risking a lengthy court battle?

Estate Planning: When and Where to Start

Many people don’t know when and where to start when it comes to planning their estate. It seems there are so many things that you need to know about estate planning such as trusts to reduce taxes, issues about guardianship, and how to distribute your assets. And then you need to think about finding the time and money to hire a lawyer to help you draft a will. So where do you start? Perhaps the best place to start is simply by thinking about what you want to happen when you’re gone. Nobody likes to think about their own death. But death is an eventuality and needs to be planned for by everyone. The sooner you think about planning your estate the sooner you can act. Once you have your estate in order you’ll be able to enjoy your later years knowing that your family is taken care of in the way you want.

Organize and arrange all of your financial information. Take into account all of your assets as well as your debt. You need to have accurate information about how much your estate is worth. Remember to include your intangible assets such as any investments you’ve made, your insurance policies, any art collections you have, and your personal property such jewelry and furniture. When you have a full picture of what your estate is all about you can decide what’s at risk. A lawyer experienced in estates can help you draft your will. Some questions that you’ll want answered are whether or not your estate will be subject to taxes and whether it will have to go through a probate court. As well, find out what the risks are to your estate in the event that you’re incapacitated and unable to make decisions for yourself.

Talk to your family and discuss what effect your estate planning will have on them. Talk about their wishes and how they want to see your assets distributed. At the same time, make certain that you talk about your own wishes since what you want is just as important. The more you talk before your death the less likely there are to be problems after your death. If you think that there may be difficulties after your death regarding the decisions you’ve outlined in your will you can consider a Legacy Trust which will have a more advanced strategy for dealing with your assets. A Legacy Trust will be much harder for anyone to contest. Keep an eye on the future. Your estate will grow and change over time so it’s important that you review it on a regular basis.

Three Documents You Need for Healthcare Decision-Making

Dealing with a family member who’s incapacitated can be a very difficult and emotional experience. One thing that makes it even more stressful is having to make difficult decisions when that family member is no longer able to do so on their own due to being incapacitated. When multiple family members are involved this often leads to quarreling and drama over these decisions. In the absence of your documented wishes on your healthcare treatment, your family and loved-ones are left to speculate what treatment and healthcare decisions you would make if you could speak for yourself. That’s why its important to plan before you become incapacitated.

There are three essential legal documents for making health care decisions that must be in place prior to becoming incapacitated:

  1. Advanced Directive. This legal document, also called Medical Power of Attorney or Medical or Health Care Proxy, gives your agent the authority to make health care decisions for you if you cannot do so because you have become incapacitated.
  2. Living Will. This legal document allows you to state your wishes for end-of-life medical care, in case you become unable to communicate your decisions.
  3. HIPAA Authorization. Federal and state laws dictate who can receive medical information without the written consent of the patient.  This legal document gives your doctor or other health care provider the authority to disclose your medical information to the agent selected by you.

If you or any of your family members need assistance with preparing any of these documents feel free to give us a call at (205) 578-1597.

Four Steps to Take Right After an Alzheimer’s Diagnosis

If you or a loved one has been diagnosed with Alzheimer’s disease, it is important to start planning immediately. There are several essential documents to help you once you become incapacitated, but if you don’t already have them in place, you need to act quickly after a diagnosis.

Having dementia does not mean an individual is not mentally competent to make planning decisions. The person signing documents must have “testamentary capacity,” which means he or she must understand the implications of what is being signed. Simply having a form of mental illness or disease does not mean that you automatically lack the required mental capacity. As long as you have periods of lucidity, you may still be competent to sign planning documents.

The following are some essential documents for someone diagnosed with dementia:

  • Power of Attorney. A power of attorney is the most important estate planning document for someone who has been diagnosed with Alzheimer’s disease or some other form of dementia. A power of attorney allows you to appoint someone to make decisions on your behalf once you become incapacitated. Without a power of attorney, your family would be unable to pay your bills or manage your household without going to court and getting a guardianship, which can be a time-consuming and expensive process.
  • Health Care Proxy. A health care proxy, like a power of attorney, allows you to appoint someone else to act as your agent for medical decisions. It will ensure that your medical treatment instructions are carried out. In general, a health care proxy takes effect only when you require medical treatment and a physician determines that you are unable to communicate your wishes concerning treatment.
  • Advanced Directive for Health Care or Living Will. Advanced directives and living wills explain what type of care you would like if you are unable to direct your own care. An advance directive can include a health care proxy or it can be a separate document. It may contain directions to refuse or remove life support in the event you are in a coma or a vegetative state or it may provide instructions to use all efforts to keep you alive, no matter what the circumstances.
  • Will and Other Estate Planning Documents. In addition to making sure you have people to act for you and your wishes are clear, you should make sure your estate plan is up to date, or if you don’t have an estate plan, you should draw one up.  Your estate plan directs who will receive your property when you die. Once you are deemed incapacitated, you will no longer be able to create an estate plan. An estate plan usually consists of a will, and often a trust as well. Your will is your legally binding statement on who will receive your property when you die, while a trust is a mechanism for passing on your property outside of probate.

In addition to executing these documents, it is also important to create a plan for long-term care. Long-term care is expensive and draining for family members. Developing a plan now for what type of care you would like and how to pay for it will help your family later on. Your attorney can assist you in developing that plan and drafting any necessary documents.

If you would like more information feel free to contact our office today.

Where Should I Store My Estate Planning Documents?

One of the most common questions that estate planning attorneys are asked is where original estate planning documents – Wills, Trusts, Powers of Attorney, and Health Care Directives – should be stored for safekeeping.  While there is no right or wrong answer to this question, there are a few things to consider: Continue reading Where Should I Store My Estate Planning Documents?

Integrating Long Term Care Into Your Estate Plan

What Is Long Term Care?

When most people think of estate planning they focus on how their assets will be disposed of when they are deceased. A well drafted estate plan, however, can and should take into consideration the need for long term care.

Long-term care provides a range of services and support for you individuals who are unable to care for themselves due to a chronic illness or disability. Most long-term care isn’t medical care, but rather help with basic personal tasks of everyday life, sometimes called activities of daily living. All too often, individuals and families wait until a medical crisis actually happens before considering long term care, which usually leads to throwing together a hasty estate plan in the face of mounting medical costs.

Why Consider Long Term Care?

Long term care costs can easily drain one’s finances in a relatively short time. According to the Harvard University Study in Compensation & Benefits Review, 72% of Americans become impoverished after just one year of nursing home care. Long term care isn’t typically covered by private medical insurance and major medical insurance plans. Medicare only pays for skilled and rehabilitative care after a three-day hospital stay; this excludes custodial care, the assistance someone needs for daily living. Medicaid only covers nursing home bills after a loved one is bereft of assets.

Whether the care you need takes place in a nursing home, assisted living facility, or with an in-home provider, the costs can mount with alarming speed. According to the Genworth 2016 Annual Cost of Care Study, the cost of receiving long term care continues to rise sharply year over year, especially for services in the home, where the vast majority of Americans receive long term care and for a longer period of time than facilities. The median monthly costs for the services of a homemaker or an in-home health aide for 44 hours a week are $3,813 and $3,861, respectively. The average monthly cost of a private nursing home room is $7,698, up 1.24 percent from 2015.  The cost of a semi-private room is up 2.27 percent to $6,844 per month.  Assisted living communities saw a slight increase in costs of .8 percent to $3,628 per month.

Long Term Care Planning in Your Estate Plan

As with all major life situations, careful planning will ensure the financial resources are available when they are needed. If your estate plan does not consider long term care, chances are you haven’t taken a realistic look at your assets and how the potential need for long term care may affect them. Talk to an estate planning attorney about the following factors to get on the right track:

  • Set Reasonable Expectations for Long Term Care

While we can’t predict what will happen to us and when it will happen, we can take an educated guess. For example, are there any major diseases that run in your family? Are you involved in any kind of activity that could affect your body long term? While considering these things may feel uncomfortable, it is far better to consider them early on and plan accordingly, rather than face the reality of long term care with no plan at all.

  • Consider a Long Term Care Insurance Policy

Since it is highly likely that Medicare or medical insurance will not cover long term care costs, a long term care insurance policy can ensure that your financial assets are not drained due to long term care costs. Most people assume that long term care will be covered by Medicaid and face the rude awakening of having their financial assets drained after learning that it doesn’t.

Consider and discuss long term care insurance policies with affordable premiums that won’t rise drastically over time. Begin this process as early as possible, as the younger you are when you apply, the lower the long term care insurance premiums are.

Benefits of Long Term Care Insurance Policies Include:

– Preserve savings and assets for family and friends;

– Help maintain one’s financial independence from family and friends, often    eliminating the need to borrow money for long-term care costs;

– Relieve family and friends of caregiving tasks, as paying for professional care becomes an affordable option;

– Allow a loved one to choose where he receives care. If Medicaid pays for care, a nursing home is the only option. People can design their policy depending on where they want to receive care: in a nursing home, in the community, at home, or in an assisted living facility; and

– Expand the range of services a loved one receives, including: care from visiting nurses, home health aides and friendly visitors programs; home-delivered meals and chore services; and time in adult daycare centers and respite services for caregivers.

  • Have Your Advanced Medical Directive, Power of Attorney, and Trust(s) Drafted

In the event that you are unable to make medical decisions for yourself, the last thing you want is for your family and/or friends to fight over them. Have an estate planning attorney draft you an Advanced Medical Directive outlining the treatment you want to be given if you are unable to do so. Otherwise, you run the risk of a lengthy court process in which a court will appoint someone to make decisions on your behalf.

Revocable or irrevocable trusts, such as a life insurance trusts have proven to be effective long term care planning tools for individuals of all ages, as they provide tax benefits and allow the donor to direct how the life insurance proceeds will be disposed of at the donor’s death.

While planning for long term care may seem like a daunting task, those who do plan are able to live with the peace of mind of knowing that they are covered if a need for long term care ever arises. Contact our office today to learn how we can help you create an estate plan that includes long term care.