A *Must* for Kids Going to College

Your child has selected a college.  In no time, your child will be starting classes.  Because he or she will technically be living at home (home over holidays and summers), perhaps still on your insurance, and possibly still driving one of your cars, it doesn’t really feel as if they’re off to adulthood, does it?

At age 18, under the law, they are adults.  (For children with disabilities, the age of majority might differ.)  They are legally no longer under your dominion.  They might even balk at that, since they are driving your car, to your house, covered by your insurance.  Regardless, they are legal adults.  And, as young adults heading off to college, they should have three critical documents: a HIPAA release, a healthcare power of attorney, and a financial power of attorney.  (In Ohio, some of these documents overlap.)

Many parents are genuinely shocked to learn that, when they call the hospital where they learn their daughter has been taken after being hurt, the hospital won’t release much information to the parents.  She might still seem like your young child, but she’s an adult now and the hospital needs a HIPAA release in order to provide you with information.  Or, the bank won’t permit you to access your son’s accounts to break a lease, sign for loan or scholarship documents, etc.  When I state “child” below, I am referring to an 18 year-old.

The Documents:

  1. HIPAA Authorization: most of us have heard of HIPAA.  The Health Insurance Portability and Accountability Act is a federal law that, among other things, protects the medical privacy of patients. If you are 18 or older, medical providers, hospitals, etc. will not provide your private medical information to a third party without a release from you.

Your child would list people he or she wants to be granted access to his or her health information, and your child would sign it.

  1. Healthcare Power of Attorney: a healthcare power of attorney grants the agent your child lists in the document with the power to make healthcare decisions for your child if he or she is unable to make them for yourself.  If your son is in a car accident and the hospital can pursue different courses of treatment, it is the healthcare power of attorney who will make the decision on what to do.  If there is no living will and end-of-life decisions must be made, it is the healthcare power of attorney who will make them.  Additionally, if your child is receiving care you believe to be substandard, or you prefer treatment at a hospital you believe is better equipped to provide, you can choose to change hospitals (or doctors) if you are the agent in charge of your child’s healthcare.

Your child lists one agent and two successors, then signs the document in front of two witnesses or a notary (Ohio requirements).

Note: in Ohio, a HIPAA release is included in the most recent version of Ohio’s Healthcare Power of Attorney.

  1. General Durable Power of Attorney (Finances): a financial power of attorney permits the person the child names as agent to make financial decisions on the child’s behalf.  If your child becomes incapacitated, whether it requires a lengthy hospital stay, or leg casts making it impossible to leave a house, a financial power of attorney permits the agent—likely you, the parent—to pay your child’s bills, enter or break a lease, manage bank accounts, pay taxes.  Likewise, it permits the parents to discuss other housing issues, educational and financial institution matters.

Your child lists an agent and two successors, and signs the document in front of two witnesses and a notary (Ohio requirements).

I recommend these documents for kids going off to college so that a parent can step in when needed.  Most attorneys offer these documents separately; and some attorneys offer them together as “New Adult” packages as I do.

Please contact me at julie@juliemillslaw.com if you want to arrange for these documents before your child goes off to college.

When should I update my estate plan?

An estate plan consists of a last will and testament, possibly a trust, along with additional documents necessary for situations involving incapacity or death.  Additional documents can include a financial power of attorney, advance directives (living will for end-of-life decision making, and a healthcare power of attorney), and a funeral declaration, among other documents.

You should review your estate plan every five years to see that it still reflects your wishes.  However, if any of the following occur, then you should review your estate plan sooner:

Marriage: if you get married, or particularly if you get re-married, you need to review your estate plan.  If you are married and die without a will, state laws of “intestacy” (dying without a will) might not result in a distribution of your assets as you would want.  Furthermore, divorce and re-marriage do not automatically remove your ex-spouse from existing documents.

Children (birth, adoption or marriage):  the critical reason for reviewing an estate plan after you add a child to the family is to name a guardian who will care for your child should you (and your spouse, if married) die.  This is not a decision that should be left to a judge you do not know.  Another reason is to direct assets to provide for your child if you are gone.

Divorce: many states have laws that treat ex-spouses as having “predeceased” their divorced spouse in certain situations with some estate planning methods.  It is best to not assume that such a law will pertain to your documents. Part of your divorce or dissolution journey should include an estate plan that removes your ex from your documents.

Death of a spouse: if a spouse dies, you want to be certain that you have successors listed in estate planning documents, and you want to update deeds and titles to property.  For example, if you have a financial power of attorney and your spouse is the only person you named to serve as agent, you will need to update this document with the names of others.  If you owned property jointly with your spouse, you will need to remove your spouse’s name if you intend to convey that property (you’ll need to have a new deed prepared to your home).

Change in assets:  when you acquire assets, you should ensure that your estate plan addresses where those assets will go upon your death.  If you have 8 acres that your two children will inherit and plan to divide equally, and then acquire 5 more acres, who will inherit the 5 acres if you do not specify it in your estate plan?

Relocation:  most estate plan documents are valid in other states if you move, as long as the documents were executed properly in the state where you lived when they were prepared.  There are special considerations in some instances, however, when you move.  For example, if you move from a community property state to a common law property state, or vice versa, then you should definitely have your current estate plan reviewed by an attorney in your new state.  Additionally, bond might be required for out of state executors and others, so you might consider choosing in-state people to serve in these fiduciary roles.

Change in status of guardian, trustee or executor:  did the person you named as the guardian of your child die?  Move to Europe?  Become incapacitated?  The same consideration is valid for an executor or trustee.  If yes, consider reviewing your documents to remove them and replace with alternatives.  Perhaps after you named your cousin to serve as the guardian of your three children, she has had four children—would she be able to care for seven children?  After you named your brother to serve as guardian of your child, he started a career where he travels more than he is home—would that be a suitable situation for your child?

Your estate plan reflects your wishes for the way everything will be handled at your death, and designates certain people to carry out those wishes.  Both the plan, and the people designated in the plan, should be current.

Contact me at julie@juliemillslaw.com to discuss reviewing and updating your estate plan.

The Classics: Fab Four of Estate Planning Mistakes

  1. “I’m not wealthy so I don’t have an estate: Everyone has an estate.  Estate planning is about what you own, not just what everything is worth.  If you have a car, a house, a bank account, or anything, you have an estate.  Estate planning encompasses how you plan for the distribution of your assets.  Estate planning can be a simple will, or it can be complicated trusts.
  2. Pets. Legally, pets are your personal property.  As with all property, you should plan for what will happen to them if you die.  Obviously this takes on critical importance with pets, since so many pets end up in cages in shelters when their owners become incapacitated or when they die.  Include instructions for the care of your pet in your will, or set up a pet trust.
  3. Designation of agents, naming of executors and trustees. Most clients do not want to “play favorites” with naming their children as agents to powers of attorney, executors in a will, trustees to a trust, so they want to name all three (or however many) children as “co-“ agents.  Under some states’ laws, co-agents can act independently of each other without requiring signatures on everything of, say, all three children.  This can still be a nightmare.  Financial institutions prefer one person for their own liability reasons.  Unless there’s an odd number to break a tie, disagreements can hamper efforts to care for an incapacitated parent or deal with estate matters.  If all three signatures are required, this can be burdensome if all three children live in separate states.  Choose one child—typically the closest geographically and most responsible financially—then list other children as successors.  (Choosing a guardian for your children is crucial also.  See this important post.)
  4. Buried or cremated? Where? Besides arguments over the distribution of belongings, the other main creator of arguments is decisions surrounding burial, cremation, and cemetery location.  Be absolutely clear in your estate plan about what you want.  Do you want buried?  If yes, in what cemetery?  Do you want cremated instead?  If yes, do you want your ashes scattered (and where), or stored in an urn (and with whom)?  Fights occur because of cemetery location first, since extended family want you in your hometown even if you’ve lived away for decades.  Disposition of your body is the second cause of fights, in my experience.  Some people are abhorrent to thinking of a loved one decomposing in a grave, or being reduced to ashes in an oven.  Finally, if you choose cremation and want your ashes scattered, be sure your wishes are legal.  The wish to “throw my ashes up in the air as you’re going down Space Mountain at Disney World” is not legal.

Contact me at julie@juliemillslaw.com to discuss your will or trust, or planning for your pet.

7 reasons to review your estate plan now

  1. You have no estate plan!  I cannot think of a reason why any adult should not have at least a Last Will and Testament, durable power of attorney, and advance directives (healthcare documents: living will [do you want artificial life support?] and healthcare power of attorney).  If you die or become incapacitated without having any of these documents, state law controls what will happen, not you (through your documents) or loved ones.  This could cause unnecessary and unexpected costs, delays, and loss of privacy.
  2. If any of these have occurred to you or, if married, to your spouse: marriage, death, birth, divorce, second marriage. These occurrences call for a review of your estate plan.  Not reviewing your will and/or trust after any of these events could lead to unintended beneficiaries or fiduciaries.
  3. Speaking of fiduciaries…review the people you designate as fiduciaries in your documents, such as executor of your will, trustee of your trust, guardian of your children, agent in your powers of attorney, to name a few. Are they still alive?  Are they still capable of serving?  Do you still want them to serve?
  4. Review your beneficiaries. Review who you listed to inherit from you.  Are they still alive?  Do you still want to bequeath to them, or add additional beneficiaries?  You should definitely review life insurance and retirement plans and other assets that have beneficiary designations, since the person you name on such a designation will inherit regardless of what your estate plan states.
  5. Your current plan is more than a decade old. There have been many tax and other changes that could affect older plans, but a major change with my practice is that my clients now plan for their “digital assets.”  What happens to your pictures on Shutterfly, or your Facebook and LinkedIn accounts?  What happens to money in your etsy or ebay store’s PayPal account?  Do you want your spouse to have access to your Facebook account at your death?  Or your emails?  These “assets” should be reviewed, and you should consider what you want to happen to them at your death.
  6. Trust funding. There have been so many people who have created a trust plan but did not fund the trust, which meant at death the trust was useless.  You must fund a trust, which means you put assets into the trust—typically by re-titling or deeding assets from you personally, to you as trustee of your trust.  You can fund while living, or set it up so that this funding occurs at your death.
  7. Beneficiary becomes disabled. If a beneficiary has become disabled, or you wish to provide for a beneficiary who is disabled, then it is paramount that you discuss special needs planning, such as a special needs trust, with your attorney.  Leaving assets directly to a disabled beneficiary could jeopardize certain benefits they might receive, such as Medicaid.

If you would like to discuss your estate plan, contact me at julie@juliemillslaw.com.

STABLE accounts–savings accounts for people with disabilities

A child or adult with a disability can now save money without jeopardizing means-tested benefits with Ohio’s STABLE account.

“ABLE” accounts permit an individual with a disability to save money without having the savings jeopardize certain benefits such as Medicaid and Supplemental Security Income (SSI).  Historically, to receive Medicaid, SSI, and other benefits, you had to have a very minimal amount of savings, typically $1500-2,000.  Now, an eligible person with a disability can save money without worrying about losing these necessary benefits.  Ohio’s version of this special savings account is called a STABLE account.

STABLE account specifics:

  • STABLE accounts permit you to deposit up to $14,000 a year into an account that you choose from accounts with varying investment options.
  • To be eligible for opening a STABLE account, the person with a disability had to have onset of the disability prior to age 26.
  • Additionally, the person must be either entitled to SSI, or entitled to Social Security Disability Insurance (SSDI), or have a condition listed on the Social Security Administration’s “List of Compassionate Allowances Conditions,” or can self-certify (see website for requirements to self-certify).
  • You do not need to reside in Ohio to open a STABLE account—enrollment is open to eligible people nationwide.
  • A person with a disability can open their own account. A parent, legal guardian, or agent in a power of attorney authorizing actions with STABLE accounts can also open an account for an eligible person.

Contact me at julie@juliemillslaw.com with any questions.

Terminal condition. Permanently unconscious state.

No one wants to think about being gravely injured in an accident, or having a terminal illness.  If you have definitive thoughts about being kept alive–or not–on artificial life support, then you should plan for what you want done or not done should you become in a “terminal condition” or “permanently unconscious state” using a living will and a healthcare power of attorney.

Karen Ann Quinlan and Terri Schiavo were both women who fell into comas after differing medical events.  Both were put on artificial life support and received nutrition (feeding tube) and hydration.  Despite efforts from family members to remove artificial life support, both women lived for 10 years in a persistent vegetative state.  As with many people, neither woman put any end-of-life wishes in writing.

The stories of Quinlan and Schiavo scare people who fear living for years in a coma, kept alive by machines.  To make it known that you would not want to be kept alive artificially, you need to prepare a living will, which memorializes your end-of-life decisions in writing.  A healthcare power of attorney accompanies a living will, and provides for you to name an agent for making healthcare decisions for you.  This “agent” can make medical decisions if you are unable to make them yourself, but cannot override your end-of-life wishes in your living will.

A living will document makes your end-of-life healthcare wishes known.  A healthcare power of attorney names an agent (you choose) to enforce your living will and make healthcare decisions for you if you are unable to do so.  These documents should be a part of your estate plan, and should be freely to distributed to the people you name, doctors, and hospitals.

Five ways to make your survivors miserable

You have died, so your survivors are already grieving.  No one wants to “tie up loose ends” and take care of standard post-death things such as getting your death certificate, distributing your possessions, selling your house, etc.  These five ways will almost ensure that their job is made worse.

  1. Die without a will.  Dying without a will is called dying “intestate.”  Without a will directing what goes where, the person in charge of administering your estate needs to distribute according to statute.  This process could be easy, or could be difficult, but will almost definitely be more of a hassle.  If you have minor-age children, quadruple the “hassle quotient.”  Now the Court will need to determine who cares for your children (guardian) with no guidance from you–the person who knows best who the guardian should be.
  2. Have a trust prepared but do not fund it or put assets in it.  If you wisely have a revocable living trust prepared to, among other things, avoid probate, and you fail to re-title or deed the assets to your trust, then these assets will need to go through probate.  (This is not true if held in survivorship deed.)  I have seen probate estates opened just to probate a house or other deeded or titled property when the deceased had a trust prepared, but the trust was “empty”(unfunded).
  3. Fail to designate a point person to hold passwords to social media, email and other accounts.  Survivors might want access to your pictures, or to let others know you have passed.  At one point one company that stored pictures online would not let a surviving husband access his wife’s account.  Her account happened to contain almost all of their childrens’ pictures from birth.  For a professional with a LinkedIn account, notifying colleagues of your death might be critical to clients or matters.  In some circumstances a court order can lead to accessing the account.  Lessen the workload of your survivors by leaving a list of accounts and passwords in a secure place with a trusted person.
  4. Fail to leave instructions regarding cremation or burial.  This is one area that can turn amicable survivors into feuding adversaries.  Some people have strong feelings against being cremated while others have strong feelings against being buried.  Families often argue over which cemetery will be chosen, or where ashes are to be stored or scattered.  Do your family members a favor and specify these instructions.
  5. Neglect to provide for the care of pets.  Who will care for your dog, cat, horse, or other pets if you die?  Leaving a relative to distribute your assets and close your accounts is enough work without also leaving it up to him or her to find homes for your pets, or to be put in the heart-wrenching position of having to take them to the pound or shelter.  Leave provisions for pets in your will or have a pet trust prepared.