Michigan Estate Planning Blog

Where Do You Score on Estate Planning Checklist?

 

Make sure that you review your estate plan at least once every few years to be certain that all the information is accurate and updated. It’s even more necessary if you experienced a significant change, such as marriage, divorce, children, a move, or a new child or grandchild. If laws have changed, or if your wishes have changed and you need to make substantial changes to the documents, you should visit an experienced estate planning attorney.
Kiplinger’s recent article “2021 Estate Planning Checkup: Is Your Estate Plan Up to Date?” gives us a few things to keep in mind when updating your estate plan:
Moving to Another State. Note that if you’ve recently moved to a new state, the estate laws vary in different states. Therefore, it’s wise to review your estate plan to make sure it complies with local laws and regulations.
Changes in Probate or Tax Laws. Review your estate plan with an experienced estate planning attorney to see if it’s been impacted by changes to any state or federal laws.
Powers of Attorney. A power of attorney is a document in which you authorize an agent to act on your behalf to make business, personal, legal, or financial decisions, if you become incapacitated. It must be accurate and up to date. You should also review and update your health care power of attorney. Make your wishes clear about do-not-resuscitate (DNR) provisions and tell your health care providers about your decisions. It is also important to affirm any clearly expressed wishes as to your end-of-life treatment options.
A Will. Review the details of your will, including your executor, the allocation of your estate and the potential estate tax burden. If you have minor children, you should also designate guardians for them.
Trusts. If you have a revocable living trust, look at the trustee and successor appointments. You should also check your estate and inheritance tax burden with an estate planning attorney. If you have an irrevocable trust, confirm that the trustee properly carries out the trustee duties like administration, management and annual tax returns.
Gifting Opportunities. The laws concerning gifts can change over time, so you should review any gifts and update them accordingly. You may also want to change specific gifts or recipients.
Regularly updating your estate plan can help you to avoid simple estate planning mistakes. You can also ensure that your estate plan is entirely up to date and in compliance with any state and federal laws.
Reference: Kiplinger (July 28, 2021) “2021 Estate Planning Checkup: Is Your Estate Plan Up to Date?”

What Should I Know about Powers of Attorney?

Forbes’ recent article entitled “5 Power Of Attorney Clauses You Need to Focus On” explains that there are two types of powers of attorney. A durable power of attorney is valid when you sign it and stays valid, if you later become incapacitated. A springing power of attorney “springs” into effect, if you become incapacitated. No matter the type of power of attorney, here are some things to consider before signing.
1. Designating multiple agents. Selecting the person you want as your attorney-in-fact or agent can be a difficult decision because he or she will have control of your financial assets. You can name more than one person as your agent, but if you name two, specify if they’ll be required to act together or if either one can act independently.
2. Defining gifting parameters. Make certain that your agent will be authorized to make gifts, as this may be important if you want to reduce estate taxes or if you’ll need to apply for government benefits in the future.
3. Changing beneficiary designations. See if the document lets your agent change beneficiary designations. You should have already named beneficiaries of important assets, like life insurance and retirement accounts, but verify whether you want your agent to be able to change those designations. Most people don’t want their agent to be able to change these designations.
4. Amending a trust. If you’ve created a revocable trust during your lifetime, you may want to give your agent the ability to change important provisions of the trust, like the beneficiaries or the amounts that they receive. However, this could ruin your estate planning goals and disinherit family that you intended to provide for. Most people don’t want to give their agent the ability to change a trust.
5. Designating a guardian. The power of attorney often names a guardian, in case one is required. The guardian would be appointed by a court and is often the same person as the agent. If you trust someone enough to be your attorney-in-fact, you’ll probably also trust them as your guardian.
The power of attorney contains powerful authorizations, so make sure you read the document carefully before you sign it. It may be wise to sign a new power of attorney every few years. Otherwise, the power of attorney might become “stale” and your named agent may have trouble using it if it’s ever needed.
Reference: Forbes (July 19, 2021) “5 Power of Attorney Clauses You Need to Focus On”

Do Singles Need Estate Planning?

 

Pauls Valley Democrat’s recent article entitled “Even 'singles' need estate plans” tells us what might happen if you die intestate (without a last will and testament). In that case, your any assets without a surviving joint owner or designated beneficiary or titled in a revocable living trust may be required to pass through the probate process. As a result, they’ll be distributed by the court, according to the state's intestate succession laws.
Even if you don’t have children, you may have nephews or nieces, or even children of cousins or friends, to whom you’d like to leave some of your assets. However, if everything you own goes through probate, there’s no guarantee that these people will get what you wanted them to have. Therefore, if you want to leave something to family members or close friends, state this in your last will and testament.
However, you may also want to provide support to some charities. You can just name these charities in your will. However, there may be options that could provide you with additional benefits. One such possibility is a charitable remainder trust. With this trust, you’d transfer appreciated assets, such as stocks, mutual funds or other securities, into an irrevocable trust. Your named trustee could then sell the assets at full market value, avoiding the capital gains taxes you’d have to pay if you sold them yourself, outside a trust.
Moreover, if you itemize, you may be able to claim a charitable deduction on your taxes. With the proceeds, the trust can purchase income-producing assets and provide you with an income stream for the rest of your life. At your death, the remaining trust assets will go to the charities that you’ve named.
A single person also should have as part of his or her estate planning, a durable power of attorney and a health care proxy. A durable power of attorney allows you to designate an individual to manage your finances, if you become incapacitated. This is really important, if you don’t have a spouse to step in.
If you become incapacitated, your health care proxy – also known as a health care surrogate or medical power of attorney – allows you to name another person to legally make health care decisions for you, if you are unable to do so yourself.
Estate planning can be complex, so work with an experienced estate planning attorney.
Reference: Pauls Valley Democrat (June 24, 2021) “Even 'singles' need estate plans”

What are Top ‘To-Dos’ in Estate Planning?

 

Spotlight News’ recent article entitled “Estate Planning To-Dos” says that with the potential for substantial changes to estate and gift tax rules under the Biden administration, this may be an opportune time to create or review our estate plan. If you are not sure where to begin, look at these to-dos for an estate plan.
See an experienced estate planning attorney to discuss your plans. The biggest estate planning mistake is having no plan whatsoever. The top triggers for estate planning conversations can be life-altering events, such as a car accident or health crisis. If you already have a plan in place, visit your estate planning attorney and keep it up to date with the changes in your life.
Draft financial and healthcare powers of attorney. Estate plans contain multiple pieces that may overlap, including long-term care plans and powers of attorney. These say who has decision-making power in the event of a medical emergency.
Draft a healthcare directive. Living wills and other advance directives are written to provide legal instructions describing your preferences for medical care, if you are unable to make decisions for yourself. Advance care planning is a process that includes quality of life decisions and palliative and hospice care.
Make a will. A will is one of the foundational aspects of estate planning, However, this is frequently the only thing people do when estate planning. A huge misconception about estate planning is that a will can oversee the distribution of all assets. A will is a necessity, but you should think about estate plans holistically—as more than just a will. For example, a modern aspect of financial planning that can be overlooked in wills and estate plans is digital assets. It is also recommended that you ask an experienced estate planning attorney about whether a trust fits into your circumstances, and to help you with the other parts of a complete estate plan.
Review beneficiary designations. Retirement plans, life insurance, pensions and annuities are independent of the will and require beneficiary designations. One of the biggest estate planning mistakes is having outdated beneficiary designations, which only supports the need to review estate plans and designated beneficiaries with an experienced estate planning attorney on a regular basis.
Reference: Spotlight News (May 19, 2021) “Estate Planning To-Dos”

Should I Discuss Estate Planning with My Children?

US News & World Report’s recent article entitled “Discuss Your Estate Plan With Your Children” says that staying up-to-date with your estate plan and sharing your plans with your children could make a big impact on your legacy and what you’ll pay in estate taxes. Let’s look at why you should consider talking to your children about estate planning.
People frequently create an estate plan and name their child as the trustee or executor. However, they fail to discuss the role and what’s involved with them. Ask your kids if they’re comfortable acting as the executor, trustee, or power of attorney. Review what each of the roles involves and explain the responsibilities. The estate documents state some critical responsibilities but don’t provide all the details. Having your children involved in the process and getting their buy-in will be a big benefit in the future.
Share information about valuables stored in a fireproof safe or add their name to the safety deposit box. Tell them about your accounts at financial institutions and the titling of the various accounts, so that these accounts aren’t forgotten, and bills get paid when you’re not around.
Parents can get children involved with a meeting with their estate planning attorney to review the estate plan and pertinent duties of each child. If they have questions, an experienced estate planning attorney can answer them in the context of the overall estate plan.
If children are minors, invite the successor trustee to also be part of the meeting.
Explain what you own, what type of accounts you have and how they’re treated from a tax perspective.
Discussing your estate plan with your children provides a valuable opportunity to connect with your loved ones, even after you are gone. An individual’s attitudes about money says much about his or her values.
Sharing with your children what your money means to you, and why you are speaking with them about it, will help guide them in honoring your memory.
There are many personal reasons to discuss your estate plans with your children. While it’s a simple step, it’s not easy to have this conversation. However, the pandemic emphasized the need to not procrastinate when it comes to estate planning. It’s also provided an opportunity to discuss these estate plans with your children.
Reference: US News & World Report (Feb. 17, 2021) “Discuss Your Estate Plan With Your Children”

Why Do I Need Estate Planning?

Many people who failed to plan their estate with the help of an experienced estate planning attorney have their assets tied up in lengthy, and often messy, legal battles that were decided by people not of their choosing.
Forbes’ recent article entitled “Everyone Needs An Estate Plan: Here's What You Need To Know” says that although many of us don't have quite as much at stake financially, it doesn't mean that estate planning is any less important. In fact, leaving a legacy, passing down wealth and helping family aren’t things that are just for the ultra-rich.
The biggest misstep is not creating an estate plan at all. This is more than just a last will and includes powers of attorney, healthcare directives, a living will and a HIPAA waiver. People put this important responsibility off because they do not want to contemplate their own death. They try to avoid the subject. Some others may have complex family dynamics, and still others are hesitant to confide their complicated relationships with a lawyer. However, all these are just excuses.
We know that life is full of changes, and people get married, divorced, have children and grandchildren, relocate to different states, change careers and get inheritances. Each of these events could make you reconsider your goals. This may necessitate an update to your estate plan.
You need to review the beneficiaries on your IRAs, life insurance policies and pensions. You should look at how you want your heirs to receive your assets and any charitable or philanthropic notions. With powers of attorney, healthcare directives, living wills and HIPAA waivers, you need to think about who you’ll entrust to make important medical and financial decisions for you, if you become incapacitated. You see these critical questions and many others are fluid and prone to change every few years as your life changes.
Remember that your assets receive different treatment from the IRS based on the type and who owns legally owns them. For example, individual retirement accounts (IRAs), Roth IRAs, traditional brokerage accounts, life insurance policies and bank accounts are different than the family home. Therefore, it’s important to be mindful of which assets are left to whom.
Don’t wait. Speak to an experienced estate planning attorney to be certain that you give this process the attention it deserves for the well-being of you and your family.
Reference: Forbes (Feb. 26, 2021) “Everyone Needs An Estate Plan: Here's What You Need To Know”

If I Move to a New State, Do I Need to Update My Estate Plan?

The U.S. Constitution requires states to give “full faith and credit” to the laws of other states. As a result, your will, trust, power of attorney, and health care proxy executed in one state should be honored in every other state.

Although that’s the way it should work, the practical realities are different and depend on the document, says Wealth Advisor’s recent article entitled “Moving to a New State? Be Sure to Update Your Estate Plan.”

Your last will should still be legally valid in the new state. However, the new state may have different probate laws that make certain provisions of the will invalid. This can also happen with revocable trusts.

However, it’s not as common with powers of attorney and health care directives. These estate planning documents should be honored from state to state, but sometimes banks, medical professionals, and financial and health care institutions will refuse to accept the documents and forms. They may have their own, as is the case frequently with banks.

You should also know that the execution requirements of your estate planning documents may be different, depending on the state.

For example, there are some states that require witnesses on durable powers of attorney, and others that do not. A state that requires witnesses may not allow a power of attorney without witnesses to be used to convey real estate, even though the document is perfectly valid in the state where it was drafted and signed.

With health care proxies, other states may use different terms for the document, such as “durable power of attorney for health care” or “advance directive.”

When you move to a different state, it’s also a smart move to consult with an experienced estate planning attorney to make certain that your estate plan in general is up to date. There are also other changes in circumstances—like a change in income or marital status—that can also have an impact on your estate plan. Moreover, there may be practical changes you may want to make. For example, you may want to change your trustee or agent under a power of attorney based on which family members will be closer in proximity.

For all these reasons, when you move out of state it’s wise to have an experienced estate planning attorney in your new home state review your estate planning documents.

Reference: Wealth Advisor (Jan. 26, 2021) “Moving to a New State? Be Sure to Update Your Estate Plan”

What Estate Planning Documents Should I Have when I Retire?

Research shows that most retirees (53%) have a last will and testament. However, they don’t have six other crucial legal documents.

Money Talks News’ recent article entitled “6 Legal Documents Retirees Need — but Don’t Have” says in fact, in this pandemic, 30% of retirees have none of these crucial documents — not even a will — according to the 20th annual Transamerica Retirement Survey of Retirees.

In addition, the Transamerica survey found the following among retirees:

• 32% have a power of attorney or medical proxy, which allows a designated agent to make medical decisions on their behalf
• 30% have an advance directive or living will, which states their end-of-life medical preferences to health care providers
• 28% have designated a power of attorney to make financial decisions in their stead
• 19% have written funeral and burial arrangements
• 18% have filled out a Health Insurance Portability and Accountability Act (HIPAA) waiver, which allows designated people to talk to their health care and insurance providers on their behalf; and
• 11% have created a trust.

The study shows there is a big gap that retirees need to fill, if they want to be properly prepared for the end of their lives.

The coronavirus pandemic has created an even more challenging situation. Retirees can and should be taking more actions to protect their health and financial well-being. However, they may find it hard while sheltering in place.

Now more than ever, seniors may need extra motivation and support from their families and friends.

The Transamerica results shouldn’t shock anyone. That is because we have a long history of disregarding death, and very important estate planning questions. No one really wants to ponder their ultimate demise, when they can be out enjoying themselves.

However, planning your estate now will give you peace of mind. More importantly, this planning can save your heirs and loved ones a lot of headaches and stress, when you pass away.

Talk to an experienced estate planning attorney today to get your plan going.

Reference: Money Talks News (Dec. 16, 2020) “6 Legal Documents Retirees Need — but Don’t Have”

What Key Estate Planning Terms Should I Know?

Estate planning can help you accomplish several objectives, including naming guardians for minor children, choosing healthcare agents to make decisions for you should you become ill, minimizing taxes so you can give more wealth to your heirs and saying how and to whom you would like to pass your estate at death.

Emmett Messenger Index’s recent article entitled “13 Estate Planning Terms You Need to Know” provides some important terms to understand as you consider your own estate plan.

Assets: This is anything a person owns. It can include a home and other real estate, bank accounts, life insurance, investments, furniture, jewelry, collectibles, art, and clothing.

Beneficiary: This is an individual or entity (like a charity) that gets a beneficial interest in an asset, such as an estate, trust, account, or insurance policy.

Distribution: A payment in cash or asset(s) to the beneficiary who’s designated to receive it.

Estate: All of the assets and debts left by a person at death.

Fiduciary: An individual with a legal obligation or duty to act primarily for another person’s benefit, such as a trustee or agent under a power of attorney.

Funding: The process of transferring or retitling assets to a trust. Note that a living trust will only avoid probate at the trustmaker’s death if it’s fully funded. A trustmaker also may be known as a grantor, settlor, or trustor.

Incapacitated or Incompetent: The situation when a person is unable to manage her own affairs, either temporarily or permanently, and often involves a lack of mental capacity.

Inheritance: These are assets received from someone who has died.

Probate: This is the orderly court-supervised process of distributing the assets of a person who has died.

Trust: This is a fiduciary relationship where a trustmaker gives a trustee the right to hold property or assets for the benefit of another party, known as the beneficiary. The trust is a written trust agreement that directs how the trust assets will be distributed to the beneficiary.

Will: A written document with directions for disposing of a person’s assets after their death. A will is enforced by a probate court. A will can provide for the nomination of a guardian for minor children.

Reference: Emmett Messenger Index (Oct. 28, 2020) “13 Estate Planning Terms You Need to Know”

Is My Estate Plan Set with a Power of Attorney?

A June 2020 Transamerica Center for Retirement Studies survey showed that a mere 28% of retirees have a financial power of attorney (POA)—and many people don’t understand that there are two types of these advance directives that serve different purposes.

MarketWatch recently published an article “Does your estate plan use the right type of Power of Attorney for you?” that says knowing how both types work is crucial in the pandemic, especially in the event that you get sick with coronavirus.

A Durable Power of Attorney for Finance can be either “springing” or “immediate.” “Durable” refers to the fact that this Power of Attorney will endure after you have lost mental or physical capacities, whether temporary or permanent. It lists when the powers would be granted to the person of your choosing and the powers end at your death.

An “immediate” Durable Power of Attorney for Finance is effective, as soon as you sign the document. In contrast, a “springing” POA for Finance means two physicians must first examine you and confirm in writing that you can no longer manage independently.

Therefore, to begin paying your bills, your agent must have those two physicians’ letters, and he or she doesn’t automatically have the authority to ask for them.

When issues, such as doctors’ letters, are required before the agent you chose can serve you, ask your estate planning attorney for guidance.

An obstacle for a Durable Power of Attorney for Finance can come upon you very fast and possibly include you and your spouse at the same time. For example, you both might get COVID-19.

The powers granted by a typical POA for Finance are often broad and permit selling and buying assets; managing your debt, car and Social Security payments; filing your tax returns; and caring for any assets not named in a trust you may have, such as your IRA.

If you recover your capacity, your agent must turn everything back over to you when you ask.

Remember that your advance directive documents are only as good as the people who implement them. You should also make certain anyone named knows that they’ll have the job, if needed. They must know where to find your POA and all other important information.

Reference: MarketWatch (Oct. 9, 2020) “Does your estate plan use the right type of Power of Attorney for you?”

How Do You Ask Parents about Estate Planning?

How do you ask your parents about their estate planning? No matter how you slice it, it’s a touchy subject to bring up. You don’t want to come off as greedy when asking your parents about their estate planning. However, you need answers to certain questions to ensure that their financial wishes are carried out and there is a smooth transition of wealth and assets. Yahoo Finance’s recent article entitled “How To Talk to Your Parents About Their Estate Plan (Without Making It Awkward)” shows us how to approach this touchy subject and get the info that you need. Begin by asking your parents about whether they have an estate plan. You can tell them that they don’t need to share the numbers and that you just want to be able to follow their instructions. A good way to start this conversation, is to acknowledge how awkward and difficult this conversation is for you. You should emphasize that you don’t want to think about their deaths but are just trying to sort things out. Experts say that you’ll likely get a better reception from your parents, if you let the conversation happen organically and not schedule a time to talk. No matter how you approach the topic of an inheritance from your parents, the objective of the discussion is to make certain they have a plan in place, so there will be a clear path for whomever is left behind to go forward. You can start by asking if they have these key legal documents: A will A power of attorney; and A living will or health care directive. Ask where your parents keep these documents and how you can access them, if necessary. You should also ask if your parents have written funeral or burial instructions. You also need to ask them to give you other important information, so you can handle their finances if they are unable to or when they die. This includes account numbers and passwords, insurance policies, information on their retirement plan or pension administrator, as well as the contact information for their accountant, attorney, financial planner, or other financial professional. Reference: Yahoo Finance (Oct. 7, 2020) “How To Talk to Your Parents About Their Estate Plan (Without Making It Awkward)”

What College Did Not Teach You: Grads Need Estate Plans

Young people also should plan how their assets will be distributed in case something were to happen to them. Estate planning is more than just deciding how your assets will be distributed. That is a large part of it, but there are other documents every good estate plan should include. Regardless of your age, you might not think you have very much – but you probably have enough to want to have a say in who gets what. A recent article in the National Law Review, titled “Five Estate Planning Documents Every Young Professional Should Have,” lists the documents that every recent college graduate will want to include as part of his or her estate plan: • General Durable Power of Attorney – This is a simple document that lets you choose who will handle your finances in case you are in an accident or get ill and cannot do it yourself. • Health Care Power of Attorney – This document allows you to choose who will make medical decisions for you, if you are incapacitated and cannot make them for yourself. • Will – Your will does not have to be complicated. However, if you want your property or any piece of it to go to someone in particular, then you need a will to make that happen. • Beneficiary Designation – On many of your financial accounts, such as the retirement account and life insurance your first employer gives you, designating a beneficiary allows you to decide who gets the assets of the account after you pass away. • Beneficiary Deed – If you have an interest in real property, you might want to consider a beneficiary deed as they allow you to say who gets that interest after you pass away. However, these are not always appropriate so speak to an experienced estate planning attorney to see if a beneficiary deed is right for you. Estate planning is for everyone, recent graduates included.

Reference: National Law Review (July 7, 2014) “Five Estate Planning Documents Every Young Professional Should Have”

For more information, see www.jerryreiflawyer.com

A Plea To Put It Down On Paper

It can be hard to appreciate the kind of frustration a family can go through when someone’s affairs are not in order and the time comes. On the other hand, if you have been there and done that, or have seen it second hand, then you know what I mean. There are simply a lot of plans that need to be made, because there are a lot of things that can go wrong. For an impassioned voice on the matter and some advice you should heed, be sure to read a recent commentary published in The Washington Post titled “Put your estate plan on paper before it’s too late.” The author recounts her own experience with her mother, who wasn’t even suffering from old age. Her mother was moved to critical condition after an accident. Unfortunately, the author was left on the other side of a legal wall caused by the lack of a financial durable power of attorney and healthcare directive that might have allowed her to come to aid. Worse still, the mother had actively put-off or refused committing her wishes to paper, and that’s why there was no legal recourse. If you or a loved one have not committed your financial durable power of attorney and healthcare directive wishes to paper, then here’s one more story to remind you why they are so important. We plan because there is a reason for certain privacy, healthcare and even probate. It is our own personal responsibility. If nothing else, we plan because when the time comes there are more important things to think about, like the comfort of an ailing loved one or the memory of a recently passed one. The original article spells out the basics and brings the need to complete your own plan clearly into focus.

Reference: The Washington Post (March 20, 2014) “Put your estate plan on paper before it’s too late”

For more information, see www.jerryreiflawyer.com

A Plea To Put It Down On Paper

It can be hard to appreciate the kind of frustration a family can go through when someone’s affairs are not in order and the time comes. On the other hand, if you have been there and done that, or have seen it second hand, then you know what I mean. There are simply a lot of plans that need to be made, because there are a lot of things that can go wrong. For an impassioned voice on the matter and some advice you should heed, be sure to read a recent commentary published in The Washington Post titled “Put your estate plan on paper before it’s too late.” The author recounts her own experience with her mother, who wasn’t even suffering from old age. Her mother was moved to critical condition after an accident. Unfortunately, the author was left on the other side of a legal wall caused by the lack of a financial durable power of attorney and healthcare directive that might have allowed her to come to aid. Worse still, the mother had actively put-off or refused committing her wishes to paper, and that’s why there was no legal recourse. If you or a loved one have not committed your financial durable power of attorney and healthcare directive wishes to paper, then here’s one more story to remind you why they are so important. We plan because there is a reason for certain privacy, healthcare and even probate. It is our own personal responsibility. If nothing else, we plan because when the time comes there are more important things to think about, like the comfort of an ailing loved one or the memory of a recently passed one. The original article spells out the basics and brings the need to complete your own plan clearly into focus.

Reference: The Washington Post (March 20, 2014) “Put your estate plan on paper before it’s too late”

For more information, see www.jerryreiflawyer.com

Life, Death, Medical Ethics And The Law Mid-Michigan

It seems we only engage in a national conversation when something in the news brings us to a crossroads. So it is with two recent medical cases making headlines over the often blurry lines between life, death, medical ethics and the law. How does one (or one’s family) navigate it all when confronting issues like brain death and life support? CNN recently considered these two cases in the headlines and the surrounding issues in an article titled “When 'life support' is really 'death support'.” These two cases share at least two things in common: a patient pronounced “brain dead” and the wishes of their families thwarted by the law. In one case, the family of a young girl seeks to keep her on life support as they hold out for a miracle. Her family refuses to accept brain death as true death. In the other case, the husband of a pregnant woman seeks to remove life support, petitioning a court to allow his wife to pass away.

Reference: CNN (December 29, 2013) “When 'life support' is really 'death support'”

For more information, see www.jerryreiflawyer.com

However, the hospital is forced to comply with Texas law that outright bans the option. These are difficult cases. While parents are responsible for their minor children, adults have the responsibility to make their wishes known through proper legal planning in advance. With the start of a new year, this would be an appropriate time to create, review or update your own advance medical directives. Be sure to take the crucial next step and discuss your wishes with your loved ones. In the very least, this national conversation over these two tragic medical cases should stimulate conversation and action when it comes to your own life and those of your loved ones.

The Power of a Power of Attorney Mid-Michigan

Few legal documents are more fundamental than a Power of Attorney (POA). In fact, every “legal” adult should have one. Like most legal tools, the POA can be tailored to fit nearly every need. The broadest POA is the “General Durable POA.” This gives the agent you appoint authority to do nearly every legal and financial act you can do for yourself, even when you are incapacitated. That is broad authority. In the wrong hands, it can be more than dangerous. Think of it as “legal dynamite.” In the right hands, it can be a blessing to you – and your loved ones. On the other hand, it is possible to grant limited or specific POA authority. For example, you can limit the duration the POA is effective and even the specific acts you authorize. This can provide a degree of safety when you don’t want to grant open-ended authority. Practically speaking, senior loved ones oftentimes have IRA accounts that need ongoing management and from which minimum required distributions must be taken. If these loved ones become infirm or develop cognitive issues, then their IRA accounts will need to be managed and administered for them. The Slott Report explored this legal and financial fact of life in a recent article titled “Using a Power of Attorney for an IRA.” One if the key take-a-ways from the article is that not all IRA custodians will treat various POAs the same. In addition to appointing the right agent for your POA and selecting the right type of POA, be sure to confirm that your POA will be accepted by the third parties that will be asked to honor it. In this case, an ounce of prevention is worth more than a pound of cure.

Reference: The Slott Report (March 26, 2013) “Using a Power of Attorney for an IRA”

For more information, see www.jerryreiflawyer.com

 

 

The Power of a Power of Attorney Saginaw, MI

Few legal documents are more fundamental than a Power of Attorney (POA). In fact, every “legal” adult should have one. Like most legal tools, the POA can be tailored to fit nearly every need. The broadest POA is the “General Durable POA.” This gives the agent you appoint authority to do nearly every legal and financial act you can do for yourself, even when you are incapacitated. That is broad authority. In the wrong hands, it can be more than dangerous. Think of it as “legal dynamite.” In the right hands, it can be a blessing to you – and your loved ones. On the other hand, it is possible to grant limited or specific POA authority. For example, you can limit the duration the POA is effective and even the specific acts you authorize. This can provide a degree of safety when you don’t want to grant open-ended authority. Practically speaking, senior loved ones oftentimes have IRA accounts that need ongoing management and from which minimum required distributions must be taken. If these loved ones become infirm or develop cognitive issues, then their IRA accounts will need to be managed and administered for them. The Slott Report explored this legal and financial fact of life in a recent article titled “Using a Power of Attorney for an IRA.” One if the key take-a-ways from the article is that not all IRA custodians will treat various POAs the same. In addition to appointing the right agent for your POA and selecting the right type of POA, be sure to confirm that your POA will be accepted by the third parties that will be asked to honor it. In this case, an ounce of prevention is worth more than a pound of cure.

Reference: The Slott Report (March 26, 2013) “Using a Power of Attorney for an IRA”

For more information, see www.jerryreiflawyer.com

 

 

Powers of Attorney – Not A Good Idea for The Do-It-Yourselfer

The internet has become an unprecedented tool for legal research and empowerment. For example, I write here to advance public awareness of estate planning law through the power of the internet, after all. Nevertheless, too much information also can lead to a dearth of actual information, or at least a lack of good useful information. Beware of the simple estate planning tools you find online, as confirmed in a recent Elder Law Answers post. Off-the-shelf and stock power of attorney forms not only can be ineffective, but they also can prove a liability and a detriment to your plans. Such forms may purport to cover every conceivable situation only to find that they do not satisfy the statutory substance or format required by your state. Moreover, anyone who has had an encounter of the first kind with any aspect of a bureaucratic system (you’ve finished your taxes, right?) knows that one-size-fits-all forms have their limitations.

Reference: Elder Law Answers (February 2012) “Why Not Just Use an Off-the-Shelf Power of Attorney Form?”

Powers of Attorney – Not A Good Idea for The Do-It-Yourselfer

The internet has become an unprecedented tool for legal research and empowerment. For example, I write here to advance public awareness of estate planning law through the power of the internet, after all. Nevertheless, too much information also can lead to a dearth of actual information, or at least a lack of good useful information. Beware of the simple estate planning tools you find online, as confirmed in a recent Elder Law Answers post. Off-the-shelf and stock power of attorney forms not only can be ineffective, but they also can prove a liability and a detriment to your plans. Such forms may purport to cover every conceivable situation only to find that they do not satisfy the statutory substance or format required by your state. Moreover, anyone who has had an encounter of the first kind with any aspect of a bureaucratic system (you’ve finished your taxes, right?) knows that one-size-fits-all forms have their limitations.

Reference: Elder Law Answers (February 2012) “Why Not Just Use an Off-the-Shelf Power of Attorney Form?

IRS Changes Its “Power Of Attorney” Rule for Spouses

The IRS makes little changes all the time and while not all such changes are life threatening (or estate plan threatening, as is more likely) the devil is often in the details. In the interest of tracking changes, then, it’s worth noting that the IRS is changing its filing practices for power of attorney. As pointed out here in the Journal of Accountancy, the IRS will no longer be accepting the old version of form 2848 and will only be accepting the new version that has been available since October 2011. What’s interesting is that while the old form allowed a husband and wife who filed a joint tax return to also jointly file for power of attorney, the new procedure doesn’t allow this. Now, such couples will have to file their power of attorney documents “separately,” even if they file for the same individual and even if they file taxes jointly. This won’t affect couples who have already filed, and only marks a turning point in a certain kind of filing; that is to say that it seems minor at best. Nevertheless, this change means that the IRS is working to acknowledge spouses separately (at least to a certain extent). For estate planners it has to mean the opposite; that couples will have to work ever more intently together as a partnership. Is this a trend that will continue in all aspects? Further, it may also be worth thinking about whether this is how you and your spouse plan (or ought to plan).

Reference: The Journal of Accountancy (February 6, 2012) “Couples who filed joint returns must now file separate powers of attorney”

ESTATE PLANNING / POWER OF ATTORNEY

Some people who thought they had covered all their bases and acted responsibly to care for loved ones in the event of a debilitating illness or incapacity are finding their plans un-done by strict banking policies. Bank of America recently updated their online security procedures, and no longer accepts a power of attorney for online banking. As Bernard Krooks wrote last week for Forbes, this strict policy came to light when Chicago resident Eva Kripke was blocked from accessing her husband’s Bank of America account. According to Krooks, Mrs. Kripke had been handling her husband Sidney’s bank accounts as agent under a power of attorney ever since he was diagnosed with Lew body dementia four years ago. Suddenly now, however, she is denied access under the bank’s updated security procedures. The bank suggested she to go to her local branch and get a printout of her husband’s account information. Unfortunately, Mrs. Kripke felt this was unacceptable because her husband’s health status requires close financial oversight. Perhaps more unfortunate, her options are limited because her husband’s illness has rendered him incompetent. Rules such as these are becoming increasingly prevalent and significant as more people are called upon to care for an aging population and their attendant disabilities. An experienced elder law attorney can provide guidance in situations where powers of attorney are limited.

Reference: Forbes – Bernard A. Krooks (July 7, 2011) “Power of Attorney Does Not Grant Access to Online Banking, Says Bank of America”

ESTATE PLANNING / POWER OF ATTORNEY

Some people who thought they had covered all their bases and acted responsibly to care for loved ones in the event of a debilitating illness or incapacity are finding their plans un-done by strict banking policies. Bank of America recently updated their online security procedures, and no longer accepts a power of attorney for online banking. As Bernard Krooks wrote last week for Forbes, this strict policy came to light when Chicago resident Eva Kripke was blocked from accessing her husband’s Bank of America account. According to Krooks, Mrs. Kripke had been handling her husband Sidney’s bank accounts as agent under a power of attorney ever since he was diagnosed with Lew body dementia four years ago. Suddenly now, however, she is denied access under the bank’s updated security procedures. The bank suggested she to go to her local branch and get a printout of her husband’s account information. Unfortunately, Mrs. Kripke felt this was unacceptable because her husband’s health status requires close financial oversight. Perhaps more unfortunate, her options are limited because her husband’s illness has rendered him incompetent. Rules such as these are becoming increasingly prevalent and significant as more people are called upon to care for an aging population and their attendant disabilities. An experienced elder law attorney can provide guidance in situations where powers of attorney are limited. You can learn more about powers of attorney in the Fundamental Estate Planning Practice Center on our website. Reference: Forbes – Bernard A. Krooks (July 7, 2011) “Power of Attorney Does Not Grant Access to Online Banking, Says Bank of America”

ESTATE PLANNING / DURABLE POWERS OF ATTORNEY

Who will make your financial decisions when you no longer can? One of the most important, and often overlooked, aspects of estate planning is preparing for the possibility of your own incapacity – whether through illness or accident, and whether temporary or permanent. In the event that you are unable to make financial decisions – such as filing your taxes, selling property, or making investment decisions – have you given someone the legal authority to act on your behalf? You may have heard of a Durable Power of Attorney (DPOA), which is a legal document giving another person (the attorney-in-fact) the legal right to do certain things (powers) for another. A DPOA may be very broad, or very limited and specific. For example, you could designate someone to act on your behalf to make investment decisions and work with your IRAs, including taking distributions from them, converting them, and creating new IRAs from your current accounts. Forbes recently offered some food for thought with a hypothetical case: Take for example a situation where a terminally-ill father has decided that his gift to his children upon his passing will be the total of his IRA, converted to Roth and with the taxes paid from his other sources, so that the Roth account will be available tax-free to the children. The remaining balance of those other sources (a taxable investment account) is to be distributed to his alma mater per his will. He has discussed this with his children and his attorney, however, prior to enacting this maneuver he slips into a coma, which lasts until his passing. Now his children will still have the benefit of the IRA, but they will be paying tax on each distribution from the account during their lifetime(s). And since his will stipulates that the taxable investment account’s balance is to be distributed to his alma mater, those funds are not available to pay the tax on the IRA distributions. This isn’t what the father had hoped would occur at all. A properly drafted DPOA could have averted the problem by designating someone to act on the father’s behalf to complete the procedure. Note that Powers of Attorney terminate upon the death of the maker and may terminate when the maker (principal) becomes incapacitated. When the intent is to designate a back-up decision-maker in the vent of incapacity, then a Durable Power of Attorney should be used. You can learn more about Powers of Attorney in the Fundamental Estate Planning Practice Center on our website

Link: http://blogs.forbes.com/advisor/2011/04/25/who-will-make-your-investment-decisions-when-you-cant/

 From Forbes.com (April 25, 2011) “Who Will Make Your Investment Decisions When You Can’t?”

ELDER LAW / PRIVATE HEALTH CARE ADVOCATE

When a medical issue strikes you or your family, the world starts spinning a bit faster and begins to bear down hard. Even the best of us can’t always keep our heads above the rising tide of bureaucracy, legal snares, and other issues that can arise in the event of a medical-billings problem or an insurance coverage denial. A private health care advocate might be an option worth exploring, according to a recent article in the Wall Street Journal’s MarketWatch. An advocate cannot offer medical advice or address legal issues (like malpractice lawsuits) but they can help resolve medical billing problems, fight insurance-coverage denials, aid in complex medical decision-making and find the right specialist or hospital for a particular condition. Some even accompany patients to doctors’ offices and other care settings. Many are or were nurses or social workers – and can help push through a problem when you really need assistance or guidance. Most hospitals employ similar representatives that can help during your stay, but private advocates are often small businesses that can be called upon in far more circumstances. Advocates typically charge $50 to $200 an hour, says Joanna Smith, president of the National Association of Healthcare Advocacy Consultants (NAHAC), a professional group in Berkeley, CA. If you are looking to hire a health-care advocate, you should expect a written estimate of costs and services, and feel comfortable with the advocate’s style, experience and expertise before signing on. The NAHAC has designed a code of ethics, which you can find on their website. Be sure to ask about those when interviewing an advocate

Link: http://www.marketwatch.com/story/private-health-care-advocates-offer-other-options-2011-04-18

 From MarketWatch (April 17, 2011) “Private Health-Care Advocates Offer Other Options”

ESTATE PLANNING / POWER OF ATTORNEY

When someone asks you to serve as their agent, giving you power of attorney, you may feel quite honored or flattered at first. But after the weight of that responsibility sinks in, you may (and should) have some serious questions. Having power of attorney over another can be an awesome responsibility and may be too great a burden for just one person. For this reason, an individual may choose to select more than one agent to act in their place should they become incapacitated. But two heads are not always better than one. What do you do if you are one of these agents and, for whatever reason, you and your co-agent(s) just cannot agree? Worse yet, what if you suspect one of your co-agents is not acting in the best interest of your loved one? Conflicts can arise in your attempts to act as “attorney-in-fact.” ElderLawAnswers.com recently updated a short article on the problem with a list of potential solutions. • First check the wording of the power of attorney document to see if it sets up a procedure for resolving disputes. • If the power of attorney does not help, contact an elder law attorney, who can tell if your state’s power of attorney laws offer any guidance. There may be a state statute that deals with disputes. • Your final step may be to file a petition in probate court to let the court decide. The court can arbitrate or, if necessary, find one agent to not be acting in the best interest of the individual in question and so strip them of their power of attorney. If you are creating a power of attorney and want more than one agent to share responsibility, you can minimize potential conflicts by allowing the agents to act separately. An alternative to naming co-agents is to name your agents in sequence. The first-named agent acts alone, but if they cannot serve for some reason, power goes to the next person on the list. As you can see, situations can become quite complex. You can learn more about powers of attorney on the Fundamental Estate Planning Practice Center on our website. While you’re there, be sure to sign up for our free monthly estate planning e-newsletter at www.JerryReifLawyer.com.

Link: http://www.elderlawanswers.com/resources/article.asp?id=9079&Section=4&state=

 From ElderLawAnswers.com (April 13, 2011) “Resolving Conflicts between Co-agents on a Power of Attorney”