Essential Legal Documents Graduating Seniors Need

June 18, 2024

As new legal adults transition from high school to college or the workforce, they must understand the significance of having essential legal documents in place. There are some essential legal documents graduating seniors need. These documents can protect their interests and ensure their wishes are respected, especially in unexpected situations.

Many young adults think estate planning is only for older people, but it’s crucial for everyone. Once young adults turn 18, they are legal adults, and parents or guardians no longer have authority over their health or financial accounts or information. Accidents and illnesses can happen at any age, and having the right documents can make a big difference.

There are five essential legal documents that every young adult should have:

Healthcare Proxy: This document allows a trusted person to make medical decisions on your behalf if you can’t communicate your wishes. Choosing a reliable and nearby person is important for making quick decisions if needed.
HIPAA Authorization: This gives certain people access to your medical records. Without it, your loved ones might not be able to get the information they need to help you in a medical emergency.
Durable Financial Power of Attorney: This lets someone manage your finances if you cannot do so yourself. It can help ensure your bills are paid, and your finances are handled properly if you’re incapacitated.
Living Will: This outlines your medical treatment and end-of-life care preferences. It helps your family know your wishes regarding life support and other critical decisions.
Preneed Guardian Designation: This appoints someone to care for you or your dependents if you cannot do so. For young parents, it ensures that their children are cared for without waiting for court appointments.

Consider the story shared by the Financial Planning Association about a young adult who was in a car accident. Despite being healthy and active, the accident left them unable to make decisions.

However, they had a healthcare proxy and a durable financial power of attorney. This enabled their family to step in and make medical and financial decisions on their behalf. Good estate planning can make hard times a little more manageable, even for young and healthy people.

Without these essential documents, your family might face delays in managing your affairs. Courts could appoint someone to make decisions for you. While this may work out, there’s no guarantee a court-appointed agent’s views would align with your wishes. Being unprepared can make difficult times even more stressful and challenging.

Creating these documents is easier than you might think. Here are some steps to get started:

Talk to Your Parents or Guardians: Discuss your plans and get their input on who your healthcare proxy or financial power of attorney should be.
Consult an Attorney: Seek advice from an estate planning attorney who can draft these documents to ensure they meet legal requirements and accurately reflect your wishes.
Store Documents Safely: Keep your documents in a safe place, and make sure that your designated proxies know where to find them.
Review Regularly: Life changes might require updates to your documents. Events such as moving to a new state, getting married, or having a child should prompt you to revisit your documents.

If you’re a young adult or a parent of one, now is the time to start thinking about these essential legal documents graduating seniors need. If you would like to learn more about planning for young adults, please visit our previous posts.

Reference: Financial Planning Association (Oct. 2023) “Essential Estate Planning for Young Adults”

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Managing a Big Age Gap in Estate Planning

June 12, 2024

Even if it was never an issue in the past, managing a big age gap in your estate planning can present challenges. When one partner is ten or more years younger than the other, assets need to last longer, and the impact of poor planning or mistakes can be far more complex. The article in Barron’s “Big Age Gap With Your Spouse? What You Need to Know” explains several vital issues.

Examine healthcare coverage and income needs. Health insurance can become a significant issue, especially if one partner is old enough for Medicare and the other does not yet qualify. How will the couple ensure health insurance if the older partner retires and the younger depends on the older partner for healthcare? The younger partner must buy independent healthcare coverage, which can be a budget-buster.

Be strategic about Social Security. Experts advise having the older spouse delay taking Social Security benefits if they are the higher-income partner. If the older spouse passes, the younger spouse can get the bigger of the two Social Security benefits. Delaying benefits means the benefits will be higher.

Planning for RMDs—Required Minimum Distributions. Roth conversions may be a great option for couples with a significant age gap. Large traditional tax-deferred individual IRAs come with large RMDs. When one spouse dies, the surviving spouse is taxed as a single person, which means they’ll hit high tax brackets sooner. However, if the couple converted their IRAs to Roths, the surviving spouse could withdraw without taxes.

Estate planning becomes trickier with a significant age gap, especially if the spouses have been married before. Provisions in their estate plan need to be made for both the surviving spouse and children from prior marriages. An estate planning attorney should be consulted to discuss how trusts can protect the surviving spouse, so no one is disinherited. Beneficiary accounts also need to be checked for beneficiary designations.

Couples with a significant age gap need to address their own mortality. A younger partner who is financially dependent on an older partner needs to be involved in estate and finance planning, so they know what assets and debts exist. Life has a way of throwing curve balls, so both partners need to be prepared for incapacity and death.

Managing a big age gap in your estate planning really requires careful and consistent review of your planning. Plans should be reviewed more often than for couples in the same generation. A lot can happen in six months, especially if one or both partners have health issues. If you would like to learn more about estate planning issues for older couples, please visit our previous posts.

Reference: Barron’s (May 19, 2024) “Big Age Gap With Your Spouse? What You Need to Know.”

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Updating Beneficiaries after Gray Divorce

May 30, 2024

Navigating the complexities of estate planning after a mid- to late-life divorce, or “gray divorce,” requires meticulous attention to detail and proactive measures, according to Kiplinger’s article, Don’t Forget to Update Beneficiaries After a Gray Divorce. Updating beneficiaries after a gray divorce is critical to estate planning. This article explores essential considerations for those undergoing a gray divorce, emphasizing the importance of reevaluating estate plans to reflect current intentions and relationships.

While family law attorneys primarily focus on asset division during divorce proceedings, it’s imperative to consider the fate of these assets post-divorce, particularly concerning beneficiaries. Updating beneficiaries on investment accounts, retirement funds and life insurance policies is paramount. Failure to do so could result in unintended consequences, potentially leaving assets to a former spouse.

Many states have statutes that automatically revoke a former spouse as a beneficiary post-divorce. However, these laws vary, and some exceptions exist, notably under the Employee Retirement Income Security Act (ERISA) plans. Understanding the nuances of state laws and ERISA regulations is vital to ensure compliance and avoid costly mistakes.

In some divorces, waivers might be used in decrees to address survivorship benefits related to retirement plans. The effectiveness of these waivers relies on adherence to plan documents and detailed planning. Consulting with a knowledgeable estate planning attorney and incorporating specific language in property settlement agreements can mitigate risks and ensure comprehensive protection of assets.

Key Takeaways:

Proactive Approach: Do not wait until after your divorce is finalized to update your beneficiaries. Proactively review and revise beneficiary designations on all relevant accounts.
Understanding State Laws: Familiarize yourself with your state’s automatic revocation laws and how they affect beneficiary designations. Ensure that these laws align with your post-divorce intentions.
Consulting with Professionals: Consult with an experienced estate planning attorney to navigate the complexities of beneficiary updates and ensure compliance with state laws and ERISA regulations.
Detailed Planning: Use specific language in property settlement agreements to address survivorship benefits associated with retirement plans and other assets. Attention to detail is essential to avoid potential conflicts and ensure that your wishes are upheld.

In conclusion, updating beneficiaries after a gray divorce is critical to estate planning. By taking proactive measures, understanding relevant laws and seeking professional guidance, you can protect your assets and secure the financial future of your loved ones. Ready to embark on your post-divorce estate planning journey? Schedule a consultation today and gain peace of mind knowing that your assets are in trusted hands. If you would like to learn more about divorce and reevaluating your estate planning, please visit our previous posts.

Reference: Kiplinger (April 15, 2024) “Don’t Forget to Update Beneficiaries After a Gray Divorce”

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Estate Planning for Veterans and Active Military Is Important

May 7, 2024

Your dedication to your country is unwavering as a veteran or active military service member. While you’re committed to your duty, you must protect yourself and your loved ones and preserve your legacy. Veterans and active military personnel can and should create an estate plan to match their unique needs. Based on Trust & Will’s article, “Estate Planning for Veterans & Active Military,” we look at why estate planning for veterans and active military personnel is so important.

Military life is marked by unpredictability and uncertainty for you and your family, making estate planning a vital aspect of preparing for the future. Many individuals have plans to distribute funds and appoint trusted loved ones to handle medical and financial matters if the unthinkable happens. Estate planning is essential to help provide for your loved ones if you pass away or are incapacitated. Knowing that your family will be cared for can give you peace of mind.

A will serves as a cornerstone of your estate plan, allowing you to:

Protect Your Family: Specify guardianship for minor children, ensuring they’re cared for by trusted individuals in your absence.
Distribute Assets Seamlessly: Designate beneficiaries and outline asset distribution instructions, including real estate, retirement and financial accounts, sentimental items, and other property.
Plan for the Unexpected: Outline your preferences for medical care and end-of-life decisions to prepare for unforeseen circumstances.

In the military, adaptability is critical, but so is ensuring your affairs are managed in your absence. Powers of Attorney enable you to:

Delegate Your Decisions: If you are incapacitated, designate trusted individuals to handle your legal, financial, and medical decisions.
Manage Your Affairs: Maintain continuity in managing assets, paying bills, and making critical decisions, even during deployments or periods of incapacity.
Mitigate Financial Risk: Protect against financial exploitation and past-due bills by appointing reliable agents to act in your best interests.

For military families, asset protection and efficient wealth transfer are paramount. Trusts offer a range of benefits, including:

Asset Preservation: Safeguard assets during incapacity or deployment, ensuring financial stability for your family.
Probate Avoidance: Streamline the distribution of assets to beneficiaries, bypassing the lengthy and costly probate process.
Tax Efficiency: Minimize estate taxes and maximize tax savings, preserving more of your hard-earned assets for future generations.

Your dedication and sacrifice are unmatched as a veteran or active military service member. That is why estate planning is so important for veterans and active military personnel. By prioritizing estate planning and including will, trust, and power of attorney strategies, you can protect your loved ones and preserve your legacy for generations. Consult with an experienced estate planning attorney for peace of mind. If you would like to learn more about planning for veterans, please visit our previous posts.

Reference: Trust & Will “Estate Planning for Veterans & Active Military,”

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Last Will and Testament is different from Living Will

December 14, 2023

A Last Will and Testament is completely different from a Living Will, no matter where you live. Despite its title, “Do you understand the difference between a Living Will and a Last Will in Idaho?” this recent Coeur d’Alene/Post Falls Press article applies to all states.

A last will is the document most people think of when considering estate planning. Often called simply a “will,” this is the estate planning document used to give instructions about what should happen to your assets and possessions when you die and who you want to carry out your wishes in the document.

The will is only effective after you have died.

The person managing your estate after you pass is known as a “Personal Representative” or executor or executrix. Some states only use the phrase personal representative. However, the tasks are the same. Your executor (or your estate planning attorney) files your last will with the county probate court for review, ensuring that the will complies with your state’s laws and getting approval to serve as the executor. This is called “probating the will.”

There are ways to avoid having your entire estate go through probate. An experienced estate planning attorney may recommend trusts and other strategies.

The last will is also used to name a guardian for minor children, which is why every young family needs a last will, even if they don’t have a large estate. Doing so guides the court system and the family about your wishes for your children.

How is the last will different from a living will? It’s a completely different document, serving an entirely different purpose.

A living will is used while you are still alive and serves a very narrow set of circumstances. A living will is used to state what medical treatments you do or don’t want to be administered if you are terminally ill and death is imminent or if you are in what is called a “persistent vegetative state.” This means your body is alive, but your brain is no longer functioning.

In the living will, you can state whether or not you will receive CPR, artificial or natural hydration and nutrition, mechanical respiration and any other means used to keep your body alive. The Living Will is often used with another document, known as a Physician’s Order for Scope of Treatment, or POST, regarding options for medical treatments.

Understanding that a last will and testament and a living will are different is good starting point for your planning. An estate planning attorney can prepare a living will and other documents, including a Power of Attorney and a Health Care Power of Attorney, all of which are needed to protect you while you are living and a last will. If you would like to learn more about a will and living will, please visit our previous posts.

Reference: Coeur d’Alene/Post Falls Press (Nov. 19, 2023) “Do you understand the difference between a Living Will and a Last Will in Idaho?”

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Where Should You Store Your Will?

October 17, 2023

When you fail to plan for your demise, your heirs may end up fighting. With Aretha Franklin, three of her sons were battling in court over handwritten wills. The Queen of Soul, who died in 2018, had a few wills: one was dated and signed in 2010, which was found in a locked cabinet. Another, signed in 2014, was discovered in a spiral notebook under the cushions of a couch in her suburban Detroit home. This begs the question: Where should you store your will and other estate planning documents?

The Herald-Ledger’s recent article, “Aretha Franklin’s will was in her couch. Here’s where to keep yours,” says that a jury recently decided the couch-kept will is valid. However, Aretha didn’t clarify her final wishes. Her handwritten wills had notations that were hard to decipher, and she didn’t properly store the will she may have wanted to be executed upon her death.

The Herald-Ledger’s article gives some options for storing your will. First, don’t store your will in the couch.

You should keep your will where it is secure but easily located. Here are some options:

Safe-deposit box: The downside is that the box might be initially inaccessible when you die. If your will is in the box, that’s an issue. The executor may need a copy of the will to access the box. If so, and a court order is required, it could take some time before the executor can get the will from the safe deposit box. If you do this, include your executor or the person designated to handle your estate on the safe deposit box contract.
At home: Keep a copy of your will in a fireproof and waterproof safe, but make sure there’s a duplicate key, or you give the combination code to your executor or some other trusted person.
With an attorney: You could have a spare set of original documents and leave one with your attorney. But be sure your family knows the attorney’s name with the will.
Local court: Check with the local probate court about storing your will and tell someone that you’ve placed your will in the care of the court. For instance, in Maryland, you can keep your original last will and testament with an office called the Register of Wills. The will can then be released only to you or to a person you authorize in writing to retrieve it.
Electronic storage: You could store it online to keep your will safe. However, most states don’t yet recognize electronic wills. As a result, you’ll need to have the originally signed copy of your will even if you store a digital copy.

Speak with an estate planning attorney about where you should store your will. He or she may suggest an option you and your family had not considered. All options to store your will have pros and cons. Whatever you do, tell the person designated to handle your estate where to find your will. If you would like to learn more about storing and handling your estate planning documents, please visit our previous posts.

Reference: The Herald-Ledger (July 19, 2023) “Aretha Franklin’s will was in her couch. Here’s where to keep yours.”

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Checklist Helps Put Affairs in Order

August 15, 2023

As the Baby Boomer generation ages, so too come the very real conversations around end-of-life planning. It can be a daunting and emotionally difficult subject. A checklist helps put your affairs in order and provides you and your loved ones with some peace of mind. National Institute on Aging’s recent article, “Getting Your Affairs in Order Checklist: Documents to Prepare for the Future,” has some steps to consider when getting your affairs in order.

Plan for your estate and finances. Common documents include a will and a power of attorney. A will states how your property, money and other assets will be distributed and managed when you die. A power of attorney for finances names someone who will make financial decisions for you when you are unable.
Plan for your future health care. Many people choose to prepare advance directives, which are legal documents that provide instructions for medical care and only go into effect if you can’t communicate your wishes due to disease or severe injury. A living will tells doctors how you want to be treated if you can’t make your own decisions about emergency treatment. A power of attorney for health care names your health care proxy. This individual can make health care decisions for you if you cannot communicate these yourself.
Put your important papers and copies of legal documents in one place. You can set up a file, put everything in a desk or dresser drawer, or list the information and location of papers in a notebook. Consider getting a fireproof and waterproof safe to store your documents for added security.
Tell someone you know and trust the location of your important papers. Someone you trust should know where to find your documents in case of an emergency.
Talk to your family and physician about advance care planning. A doctor can help you understand future health decisions and plan the kinds of care or treatment you may want. Discussing this with your doctor is free through Medicare during your annual wellness visit, and private health insurance may also cover this. Share your decisions with your loved ones to help avoid any surprises about your wishes.
Give permission in advance to discuss your condition with your caregiver. You can give your caregiver permission to talk with your doctor, lawyer, insurance provider, credit card company, or bank. This is different from naming a health care proxy. A health care proxy can only make decisions if you cannot communicate them.
Review your plans regularly. Look over your plans at least once yearly and when any major life event occurs, like a divorce, move, or major change in your health.

A checklist helps put your affairs in order and gives you and your loved ones a roadmap to address any changes or issues that come up in the future. If you would like to learn more about end-of-life planning, please visit our previous posts.

Reference: National Institute on Aging (July 25, 2023) “Getting Your Affairs in Order Checklist: Documents to Prepare for the Future”

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Essential Estate Planning Documents every Caregiver Needs

July 31, 2023

Being a caregiver for a loved one can be one of the most emotionally challenging things you can do. There are so many aspects of your loved ones life that you are suddenly responsible for managing. So many important discussions about estate planning and writing a will are emotionally challenging as they ask those involved to come face-to-face with their mortality. But these are important discussions, says a recent article, “Elder Law Guys: All the documents to have in place when you’re an adult caregiver,” from Pittsburgh Post-Gazette. The sooner these conversations take place, the better. There are some essential estate planning documents every caregiver needs to have available.

Here are the documents needed:

General Durable Power of Attorney. The financial POA is the most essential estate planning document. An agent is named to stand in for the parent or other person and make all financial and legal decisions. Name not just one but two successor agents to serve if the primary agent cannot or will not serve when needed. If no POA or agent can serve, the family will need to petition the court to have a judge name a guardian to manage the person’s financial affairs. There’s no guarantee that the court will name a family member. POA law varies by state, so speak with an estate planning attorney to ensure the POA permits the specific actions you want the agent to be able to take.

Durable Healthcare Power of Attorney and a Living Will. In some estate planning practices, these two documents are combined, while in others, they are separate. For the Healthcare POA, an agent is named to make health care decisions for the person. It’s advised to name two successor agents in case the primary person cannot or does not wish to serve in this capacity.

A Living Will contains the person’s wishes regarding receiving life-sustaining treatment in the event they can’t make their own decisions and the treating physician has determined the patient is either suffering from an irreversible coma, is in a persistent vegetative state, or an end-stage medical condition not survivable even with treatment.

Last Will and Testament and Trusts. The last will and trusts both dictate how property will pass, but the will directs how property is passed upon death. A trust contains provisions to manage assets during a person’s lifetime. Assets owned by a trust don’t go through probate, so they transfer directly to beneficiaries, and their value and the identity of beneficiaries remain private.

Suppose there are family members who are disabled. In that case, the estate plan should include a Supplemental Needs Trust to hold any inheritance from a disabled beneficiary who receives needs-based government benefits. Otherwise, the disabled recipient will become ineligible for government benefits. Depending on the circumstances, parents may want assets to be held in trust for other beneficiaries until they can manage their inheritances wisely.

Asset Protection Trust. An irrevocable Asset Protection Trust holds assets to shelter them from the cost of long-term care and can reduce or eliminate estate taxes for beneficiaries. An estate planning attorney will know which type of Asset Protection Trust will be most effective for your situation.

Beneficiary Designation Forms. All accounts or assets with beneficiary designations should be reviewed to be sure the named beneficiary is correct.

These essential estate planning documents should be stored in a known location so the may be available for a caregiver to access, if they need. Documents must be reviewed every three to five years to ensure they align with the parent’s wishes. Estate and tax laws change, relationships change, and people move and pass on, so it’s important to keep these documents updated. If you would like to learn more about the role of a caregiver, please visit our previous posts.

Reference: Pittsburgh Post-Gazette (July 8, 2023) “Elder Law Guys: All the documents to have in place when you’re an adult caregiver”

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Legal Documents Every Senior Needs

June 21, 2023

There are legal documents every senior needs. Legal documents pertaining to health care, end-of-life treatments and allowing others to access medical records are vital to protecting adults at any age. However, they are especially important for seniors, says a recent article from The News-Enterprise, “All seniors need legal documents for medical issues.”

These documents include a living will, health care power of attorney and HIPAA authorization. In addition, they give you the ability to name the individuals you want access to secure medical information and who will be able to make decisions about your health care during incapacity.

The health care power of attorney is the broadest and most important medical estate planning document. Depending upon where you live, it may be known as medical power of attorney, healthcare proxy, or healthcare surrogate.

Here’s where an estate planning attorney is needed: like many estate planning documents, the health care power of attorney can be broad, encompassing both a living will, and a HIPAA authorization within one single document, or it can be extremely limited. By having a document created for you, rather than using a boilerplate form, you can ensure your exact wishes are followed.

The health care power of attorney generally makes specific determinations. The document needs to name one person or agent and a backup agent to act on your behalf. Many people think they can change their agent if the agent becomes incapacitated or unavailable. Still, all too often, they need to remember to have their document updated, and then, when they need to have an agent act on their behalf, no one can do so.

Without an appointed agent, court intervention becomes necessary, which is time-consuming and costly.

The health care power of attorney should specify when the agent may act on behalf of the person and address both access to information and decision-making. The ability to immediately make decisions is critical when the individual is at an advanced age or has urgent medical needs. In addition, other provisions are included to ensure the agent has the full ability to act.

A living will, sometimes called an advance medical directive, may be a separate document or contained within the health care power of attorney. It includes instructions for end-of-life decisions. These may be as detailed as outlining when artificial nutrition and hydration may be used or as simple as naming an agent with the right to remove the person from life support. If you have strong feelings about using life-prolonging devices, your wishes can be legally enforceable through a living will.

Lastly, a HIPAA authorization permits another person to have access to review medical records.

These are the basic legal documents that every senior needs built into their estate planning. These health care documents should be created with the help of an experienced estate planning attorney to ensure the person carrying out your wishes is the person whose judgment you trust and to clarify your wishes. Preparing for these tough decisions in advance is hard. However, this is a gift to those you love, who will otherwise be left hoping they did what you would have wanted. If you would like to learn more about health care planning, please visit our previous posts.

Reference: The News-Enterprise (May 27, 2023) “All seniors need legal documents for medical issues”

Estate Plans Require Preparation for Success

June 13, 2023

Making wishes clear to family members is never enough to satisfy legal standards, according to a recent article, “Preparation is essential part of estate plan” from The News-Enterprise. Quite the opposite occurs when family members refuse to follow verbal requests, especially when personal grievances come to the surface during times of grief. Estate plans require preparation for success.

A second misconception concerns the spouse or children being able to step in and take action for a loved one whose health is declining solely based on the family relationship.

Many parents have children who would make poor agents, so many don’t name their children to act on their behalf. Even if you want your spouse or child to act on your behalf, you have to name them in the proper legal documents.

A third frequent misconception is that documents can be created when needed. Not so! Documents like Power of Attorney, Health Care Power of Attorney, Living Will and others must be created well in advance. An incapacitated person cannot sign legal documents, so if no planning has been done, the family will have to petition the court to name a guardian—an expensive, time-consuming and complicated process.

Every adult should have three basic documents while they are in good health: a Health Care Power of Attorney, a Durable Power of Attorney and a Last Will and Testament.

The Health Care Power of Attorney gives another person the right to make healthcare decisions for you if you are unable to do so. It also gives another person the right to access protected health care information, including medical and health insurance records. It may also be used to authorize organ and/or tissue donation and set limitations for donation. Finally, the document may direct end-of-life decisions regarding artificial life support.

The Durable Power of Attorney allows another person to handle legal and financial matters. It can be effective upon signing or upon incapacity. Without correctly executed Powers of Attorney, the family will need to apply for guardianship.

The Last Will and Testament determines who should receive any specific property and how your property is to be divided and distributed. Wills are only effective upon death, so any property in the will continues to be yours until death. Wills are also used to name the executor who will be responsible for administering the estate. It can also be used to set up additional protections for disabled beneficiaries, minor children and others who are not good with finances.

Speak with an experienced estate planning attorney to be certain to have these essential documents to prepare for the times when life doesn’t go as expected. Preparation is required for the success of your estate plan and those you love. If you would like to learn more about drafting an estate plan, please visit our previous posts.

Reference: The News-Enterprise (May 13, 2023) “Preparation is essential part of estate plan”

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Category: Living Will

Essential Legal Documents Graduating Seniors Need

Updating Beneficiaries after Gray Divorce

Estate Planning for Veterans and Active Military Is Important

Last Will and Testament is different from Living Will

Where Should You Store Your Will?

Essential Estate Planning Documents every Caregiver Needs

Legal Documents Every Senior Needs

Estate Plans Require Preparation for Success

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