The Estate Plan List (to get you started)

Will

Do you have a will?  If yes, is it up to date with people you chose to serve as executor and guardian?  Do you want to add or remove any beneficiaries?

Financial Power of Attorney

Do you have a durable financial power of attorney that names trusted people to take care of your financial matters if you are unable to?  How will your bills get paid if you are in the hospital?

Living Will

A living will is a healthcare document that details your end-of-life decisions.  Do you want to be kept alive by artificial means?  Are there some procedures you want to refuse (typically for religious reasons)?  For your living will to take effect, two doctors must agree that you have a terminal condition or are in a permanently unconscious state, and death is being prolonged with no reasonable chance for recovery.  The people you list in this document are merely for contact purposes–they have no decision-making authority.

Healthcare Power of Attorney

A healthcare power of attorney allows you to name people who will have authority to make healthcare decisions for you if you are unable to do so.  If you have a living will, your healthcare power of attorney cannot override your wishes in your living will.

Life Insurance

Why have life insurance?  Obvious reasons include providing money to those dependent on your income if you die.  Life insurance can also be used to pay off your debts so that you don’t burden your family with your financial liabilities, such as medical debt if you were hospitalized or had a lengthy illness.  You can purchase a policy designed to pay off the mortgage on the house if you want to be sure your children and family can keep the family home.  If you own a business, life insurance can be purchased to enable your business partners to buy out your shares and keep the business running smoothly.

There are more components to an estate plan, but the list above explains your first considerations when starting to plan.  This list is specific to Ohio.  Documents described above might be different in your state.

If you have any estate planning questions, email me at julie@juliemillslaw.com.

 

 

Coronavirus and your healthcare decision documents

In Ohio, we have “advance directives” that include a living will and a healthcare power of attorney.  A living will (not related to a Last Will & Testament which distributes your assets after you die) is an end-of-life document that details what medical treatment you want or don’t want if you are dying.  Death must be imminent.  Any treatment is only prolonging death.  A healthcare power of attorney gives a person you choose the power to make healthcare decisions for you if you can’t make them yourself.  This person cannot contradict your living will.

Most living wills state that we don’t want to be kept alive by artificial means such as a ventilator if death is imminent and there is no reasonable hope for recovery.  The scenario that comes to mind is one where someone’s organs are shutting down, breathing is labored, death is near, and the last thing we want is to be hooked up to a ventilator and have a machine breathe for us.  We state these wishes in our living will, and hopefully our agent in our durable power of attorney for healthcare ensures that our wishes are followed by medical personnel.

Some people are reconsidering their living wills in light of the coronavirus.  The need for a ventilator to help us breathe seems common for many of those being treated for coronavirus/covid-19, and there is concern that if you have a living will stating “no ventilator,” then you won’t get one if you are being treated for coronavirus.  This not true.

A living will applies only when death is imminent and a machine, such as a ventilator, will only prolong your death.  With coronavirus, a ventilator is used as treatment for recovery, and ventilators remain in use as long as there is a reasonable hope for recovery.  It is used as treatment to counter the effects of what the virus is doing to your lungs.  That is not a situation where a machine is simply prolonging death.  When you sign your living will, you are not stating that you do not want a breathing machine or ventilator under any circumstance.  A living will is not a document that doctors consult to determine a course of treatment.  It is a document that is used in determining end of life decisions.

If you have any questions regarding healthcare documents, and how coronavirus/covid-19 might affect when the documents are used, please email me at julie@juliemillslaw.com.

 

Before you die…

Or this post could have been titled “Ease the burden of loved ones.”  Because I’m an estate planning attorney, the “Before you die…” advice I’d typically give would be to have a will or living trust plan prepared.  I certainly always recommend that advice.  This post, however, is different.

I recently read an article I loved, “You Need to Make a ‘When I Die’ File–Before It’s Too Late.”  The article speaks to the side of estate planning that I rarely participate, and that’s the grieving family part of planning for what happens after you die.  I help my clients get all the documents they need, and advise on decisions that need made.  What struck me about the suggestions in this article though were actions to take that speak to people you love.  The article adds two items to the typical estate planning checklist, i.e., an ethical will and letters to loved ones: “[W]here a legal will transfers assets, an ethical will transfers immaterial things: your life lessons and values.”

An ethical will supplants a traditional will, and might be used to explain why you chose one child to serve as executor over the other child, or why you chose close friends as guardians for your child over your siblings.  “Letters to loved ones” is self-explanatory, and I highly recommend it if you have children who might have difficulty remembering you if you die when they are young.

As the author states:

The point of all this is to make a difficult thing like dying or loving someone who is dying less difficult. In that sense, creating a When I Die file is an act of love. It will always be too soon to tell your story and let people know how much they mean to you, until it is too late.

If you have any questions about estate planning, email me at julie@juliemillslaw.com.

Has a nursing home asked you to sign?

Your mother, father, aunt, etc., is moving to a nursing home.  You accompany your dad, for example, so he won’t be going through this alone, and he might need help completing paperwork.  The nursing home asks, or requires, that you sign as hi—STOP!  Don’t sign!

The nursing home asks you to sign as your dad’s “personal representative.”  Or to sign as guarantor.  Or to sign anything.  What you are likely doing is signing an agreement to be held financially responsible if your dad, through his insurance or Medicaid, does not or cannot pay his bill.  This might happen if his Medicaid application is not approved, or if insurance denies his claims, or any number of reasons.

But, the nursing home simply wants you to sign as the “responsible relative,” the person who will take steps to see that Medicaid or insurance pays your mother’s nursing home bills, right?  Or as the point person who will track down information, call the insurance company, provide information, right?  You would certainly agree to help your mother this way.  The problem is that you have unwittingly agreed to also be financially responsible to the nursing home for your mother’s bills.  Just ask Judy Andrien.

This practice by nursing homes occurs regularly, at least according to what I see and hear.  It happened to my family member, where the nursing home left his sibling lying out in the hallway on a gurney until the family member signed as “personal representative,” assuring this family member that “oh, it’s just a formality–we never pursue payment.”  They did pursue payment.

It is illegal under the federal “Nursing Home Reform Law” (summarized here) to require or request someone to sign as a guarantor as a condition of someone (usually a family member) being admitted, or of being permitted to continue to stay.  Nursing homes often get “crafty,” however, by asking family to voluntarily sign, whether as personal representatives, the responsible party, guarantor, etc.  “It’s just a formality….”

As an attorney, I have handled matters where stunned family members come to me with 5-figure bills from the nursing home, where the nursing home says that they signed as a financially-responsible party and now the bill is due.  At this point, one of the the only arguments is that my client did not sign voluntarily which can be a difficult argument to make, not to mention costly in attorney fees.

My advice if you accompany someone other than your spouse to a nursing home to be admitted?  Do not sign anything.  Period.

If you have any questions, contact me at julie@juliemillslaw.com.

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.