Annapolis, Maryland Wills, Trusts & Estate Planning

How Old Do I Have to Be to Need an Estate Plan? – Annapolis Estate Planning

If an estate plan sounds like something that only an adult needs, and you’re over 18, then congratulations: you qualify. That is true if you have any assets, and if you have children, you definitely need an estate plan.

The truth is that everyone needs estate planning. If you have any assets and you intend to give those assets to a loved one, you need to have a plan. If you become ill or incapacitated and can’t make decisions on your own, you’ll need a healthcare proxy so that someone you trust can be involved in your medical care.

How do you start? An article from Forbes’, “Reviewing Your Financial And Estate Planning Checklist,” will give you some of the steps to take.

First, take inventory of your possessions, including your home, vehicle, stocks, life insurance policies, etc. There are many steps and documents that an estate planning attorney will suggest you put into place immediately for your protection.

The first of topic is a durable power of attorney for property, finances and health care. This document allows you to designate a trusted individual to make decisions and take action on your behalf with matters relating to each of the three areas above.

In addition to the importance of having all powers of attorney readily available, in case you become incapable of making decisions, beneficiary designations should also be looked at frequently to update any changes to family situations, like a birth or adoption, death, marriage or divorce.

Another topic to address is a living trust. A trust will give direction regarding where and how the assets are dispersed when you die. A great reason to use a living trust is that the assets in a trust do not pass through probate court, which can be an expensive and time-consuming process.

Another area is digital assets. It’s critical for your heirs to have access to digital files, passwords and documents. This can be easy to overlook. Create a list of your digital assets, including social media accounts, online banking accounts and home utilities you manage online. Include all email and communications accounts, shopping accounts, photo and video sharing accounts, video gaming accounts, online storage accounts, and websites and blogs that you manage. This list should be clear and updated for your heirs to access.

Lacking an estate plan, your wishes may not be followed, and your family may be subjected to a nightmare in settling your estate, which will take far longer and cost much more than if you had an estate plan in place.

Reference: Forbes (January 4, 2019) “Reviewing Your Financial And Estate Planning Checklist”

Holden & Campbell, LLC – Annapolis Estate Planning

Obscure South Dakota Law Puts Kids On the Spot for Aging Parent’s Care - Annapolis Estate Planning

A civil law that has been in place since 1939 is rarely used, but as the cost of long-term care and nursing facilities keeps rising, some experts think it might get dusted off.

South Dakota is one of 29 states that have an adult child payment requirement, commonly known as a “filial law,” that speaks to the responsibility of one person or a group of people to pay for the housing, feeding, and care of family members, reports KSFY.com in its article, “Little-known law forces adult children to pay for nursing home care for parents.”

Elder law experts are taking a look at the idea of using that law as care facilities face the challenges of unpaid nursing home bills.

This filial law in the Mount Rushmore State permits nursing homes to sue the children of patients who don’t pay and makes no reference to whether the families have close relationships, or whether the adult child received any financial assets of the parent.

Advocates of the laws contend that, in certain situations, they give nursing homes a remedy to collect outstanding bills rather than writing off those debts as a loss. These losses can lessen a facility’s ability to provide quality care to all patients. The laws are most commonly enforced when an adult child was given money or assets or misappropriated money from a parent, prior to admission into a nursing home.

Some believe these filial laws uphold a general sentiment in law that there’s a moral responsibility of those who can afford to pay for a family member’s care to do so.

Nursing homes don’t want to be providing long-term care for people who have the ability to self-pay, especially if there’s been inappropriate behavior by an adult child.

There have been opponents in other states who have tried to overturn the laws, basing their arguments on the fact that the statutes are broad and could be applied inappropriately. Critics say that the law is poorly written and could have a negative impact on family members, who may have already exhausted their own resources in trying to care for aging parents.

Reference: KSFY.com (December 20, 2018) “Little-known law forces adult children to pay for nursing home care for parents”

Holden & Campbell, LLC – Annapolis Estate Planning

Why Do I Need to Have Powers of Attorney? - Annapolis Estate Planning

There are a number of different estate planning documents that are easily confused, including “Power of Attorney.” Let’s get a look at the different types of “Power of Attorney,” and what they do.

Of the estate planning documents, most people have heard of a will and some have a health care proxy. The Power of Attorney is effective while you are still living, and is also known as a “Durable Power of Attorney” because it is effective, or durable, even after you become incapacitated. Your will only becomes effective when you die.

The Times Herald says in the article “Powers of attorney good for life and beyond” that there are two general types of powers of attorney, one for financial matters and the other for health care matters. They shouldn’t be combined in a single document, because they have different legal requirements. Unless they say otherwise in the document, powers of attorney don’t expire until the creator does. However, there are a few powers in both financial and health care powers of attorney that can survive the person who created the document.

The person who signs a financial power of attorney is called the principal. The person granted authority to act on behalf of the principal, is the agent or the attorney-in-fact. Without a valid executed financial power of attorney in place, if you become mentally disabled, your family would have to file for a probate court supervised conservatorship to have someone handle your property and financial affairs.

With a properly drafted durable power of attorney for health care (or health care power of attorney), you can avoid a guardianship and instead have the health care agent you selected make decisions for you when you are unable. Without a valid executed health care power of attorney, if you become mentally disabled, your family would have to file for a probate court supervised guardianship to have someone handle your care, custody and medical and mental health care treatment decisions, like where you’re going to live and who’s going to be the primary caregiver.

Some attorneys will set expiration dates in powers of attorney, such as five years, after which the power of attorney (POA) will expire and will no longer be valid. In many of these cases, it’s common for the creator of the POA to not know that the form was expired. You can typically revoke powers of attorney at any time, if you aren’t mentally disabled. Powers of attorney expire when you do.

You can include in your health care power of attorney the power to make an organ donation. You can also include the authority to resolve a conflict between the terms of your advance health care directive or living will and the administration of means necessary to ensure the medical suitability of the anatomical gift. If your health care POA says that these anatomical gift powers remain exercisable after your death, then the powers continue after your death and aren’t revoked.

An estate planning attorney can help you create all the documents you need, to ensure that you and your family are protected, while you are living and after you have passed. The idea is to do all the planning and make as many of the decisions as you can before anything occurs.

Reference: The Times Herald (December 21, 2018) “Powers of attorney good for life and beyond”

Holden & Campbell, LLC – Annapolis Estate Planning

The In-Between Stages of Competency - Annapolis Estate Planning

If you live far from your hometown, you may be used to seeing large changes in aging parents from year to year. However, if you are involved in their day to day life, you may not notice the changes or they may seem to come and go.

When you are close to your parents, it’s hard to judge their competency accurately. Your dad, who was the perfect driver, suddenly isn’t quite as good behind the wheel as he used to be. Or your mother, who never left the house without being perfectly groomed, seems to have become a little casual about her appearance. They aren’t big changes, but the change is rarely sudden.

Other examples can be if your father forget to pay a bill…. or forgot that you called him yesterday. You recognize all this and ask if he is okay. He doesn’t think there’s a problem.

Is there anything you can do? No one would ever say, at this time, that he is legally incompetent to make decisions, because he presents himself well. That’s the issue discussed in Forbes’ recent article, “Aging Parents At The In-Between Stage: Partially Competent and Partially Not.”

Here are some strategies to consider to help you to address this situation:

First, both the senior parent and the adult child must be in agreement that something has to change, and fast. Next, examine the parent’s legal documents, specifically the Durable Power of Attorney. In some cases, the daughter is appointed as the agent, and her power is unrestricted. She has legal authority to take over management of the father's accounts. Nevertheless, the daughter may not have discussed this with her father and, likely, she has not exercised any authority as agent. The daughter should review the Durable Power of Attorney with any siblings. She should then access her father's accounts, so she’d know if her father is giving away money or perhaps caught up in an elder fraud. If there’s a significant problem, she needs to approach her father.

The father might refuse any help in managing his finances. However, gentle and respectful persistence can win the day. The Durable Power of Attorney can be used to move most of his assets out of accounts where he had access. He still could give away money, but she then could restrict what he had available.

This shows the importance of doing estate planning and having at least one responsible person, the daughter, to act as the agent with power of attorney.

Be aware that even a slightly incompetent senior, who seems to be okay on the surface, may have lost their ability to make good decisions about their finances. You may have to step in to prevent themselves from doing damage, to protect their retirement and their finances. Speak with an estate planning attorney as soon as you can to make sure all the protections necessary are in place, including a Durable Power of Attorney. This is not a situation that can wait. If a plan is not already in place, start with a phone call today to start the process.

Reference: Forbes (December 3, 2018) “Aging Parents At The In-Between Stage: Partially Competent and Partially Not”

Holden & Campbell, LLC – Annapolis Estate Planning

Talking About Future Care Needs with Parents - Annapolis Estate Planning

It’s great to take a trip home and catch up with family, especially when you live far away.  However, if this is the year that you arrive to find big changes in your aging parents, here’s some help about what your next steps might be.

When nostalgia doesn’t quite match up with reality, it’s time for some challenging conversations with aging parents and, if you have them, your siblings. It’s not an easy topic, according to the article, “Making the best care decisions for aging parents,” from KARE 11 in Minneapolis, but it is better to have the conversation and make the plans for what’s next than it is to bury your head in the sand and pretend that nothing’s wrong.

Many families find this out the hard way. When a parent requires immediate urgent care, the family must jump into “go” mode. It can be overwhelming. There are many options, which range from various levels of in-home care, to independent living, to assisted living and even to skilled nursing care. You should understand the level of care you need and what you can afford.

Unless you qualify for Medicaid, you’ll need to pay for assisted living out of your own pocket. For most of us, this could drain assets in short order. Many people also aren’t planning for long-term care in retirement.

It’s best to plan early. If you're going to buy a long-term care policy, the best time to apply is in your 40s or 50s, when your health is good and the cost is cheaper.

Sit down with an elder law attorney, regardless of your assets, because the laws concerning Medicare and Medicaid are confusing. Every situation is different.

Many people aren’t aware that Medicare doesn’t cover many long-term care services. In fact, that limited benefit is designed to get somebody back to independent living, not help them with basic activities of daily living. Therefore, if it becomes a situation where somebody is going to need help with such basics as dressing, bathing and other activities of daily life for the rest of their life, Medicare is not going to cover it.

If you believe gifting your estate away now will stop you from losing it in the future, remember that most states have a five-year look back period. Any gifts of money or property in the 60 months before applying for Medicaid can be taken back to pay for the program or the applicant will be penalized.

There’s very little about this that is easy for aging parents or adult children. However, planning in advance, in an intelligent and sensitive manner, is better than having to make hard choices in an emergency.

Reference: KARE 11 (Minneapolis) (November 27, 2018) “Making the best care decisions for aging parents”

Holden & Campbell, LLC – Annapolis Estate Planning

Are Estate Planning Documents for the Living, Or the Dead? - Annapolis Estate Planning

Too many people don’t understand the importance of estate planning as a means of protecting themselves and their families, while they are living. There’s more to estate planning than meets the eye!

What happens when an adult is injured in a terrible accident and is in a coma? If the person was in charge of the household’s finances, how will bills get paid while they are recovering? If they are never going to recover, how will their family make financial or health care decisions on their behalf?

This unfortunate scenario is one of many life events that an estate plan can address.

AL.com’s recent article, “If You Don’t Have This, You Need It” says that a better solution is to be proactive and have your attorney create a Power of Attorney before you need one. Let’s look at the different types of POAs.

• Springing Power of Attorney. This only becomes effective under certain conditions, typically incapacity. A big disadvantage of this POA, is that when someone tries to use it on your behalf, they may be required to "prove" that you are actually incompetent, creating inconvenience and delays.
• General Power of Attorney. This document is one in which you give your attorney-in-fact the authority to act on your behalf at any time. However, if you become incapacitated, this document is null and void.
• General and Durable Power of Attorney. This document lets your attorney-in-fact continue acting on your behalf, if you become incapacitated.
• Limited Power of Attorney. Here, you appoint someone to act on your behalf, only under certain conditions, such as only when you’re out of the country.

Consider your own situation. Which Power of Attorney is most appropriate for you? An experienced estate planning attorney will make this decision more accurate and easier. You will then decide whom you’d appoint as your attorney-in-fact. If you’re married, a natural choice is your spouse. However, you should also have at least one successor attorney-in-fact.

Consult with an estate planning attorney to be sure the document conforms to state law. Your counselor can help you decide which Power of Attorney type is best for your situation.

Advance Directive for Healthcare. This document describes your wishes on end-of-life care. These documents aren’t legally binding agreements, but it’s seldom that their instructions aren’t followed and accepted by healthcare professionals. Talk to an attorney, because they do vary by state. They’re typically, divided into two parts:

• Living Will. In this, you'll give detailed instructions on the level of care, should you become incompetent and facing a potential end-of-life situation. This should talk about whether you’d want to stay on life-support, remain on a feeding tube, or if you’d want hydration or pain medicines administered or withheld, should you ever be in a vegetative state. It’s far better for you to make these calls, instead of leaving it to a physician or a family member.
• Healthcare Proxy. This document names the person who you entrust with your health decisions. You may also use a Living Will, depending on your state’s laws, to convey your wishes and in that document, express your desire that no one speaks for you but your wishes in that document be followed.

An estate planning attorney should be consulted to prepare these documents. They will have years of experience with families and understand how to best express your wishes, so that they will be followed.

Reference: AL.com (October 26, 2018) “If You Don’t Have This, You Need It”

Holden & Campbell, LLC – Annapolis Estate Planning

Preparing for the Realities of Aging - Annapolis Estate Planning

A healthy life where you retain all your faculties and enjoy yourself, is definitely preferred to decades of dementia. We don’t get to choose, but we can plan.

As Baby Boomers continue to change the face of aging, and so many embrace the idea of genetic testing, many are confronted with a harsh picture of what their future may bring. If that includes dementia, there are facts you need to know and myths that need to be uncovered.

The (Bryan TX) Eagle’s recent article, “Alzheimer’s disease: Five common myths, busted,” reports that, according to the Alzheimer’s Association, one in three seniors dies with Alzheimer’s or another type of dementia. There are up to 5.7 million individuals who live and die with the disease, which makes it the sixth leading cause of death in the United States. The article provides five common myths about Alzheimer’s disease.

Myth # 1: Memory loss is a normal part of growing older. A slip of the memory may well be a normal part of growing older. While these forgetful moments may cause a bit of frustration and embarrassment, they don’t affect our ability to live an independent life. However, if a loved one has trouble remembering commonly used words or loses the ability to communicate, it could be a potential symptom rather than a natural senior side-effect.

Myth # 2: Alzheimer’s can be reversed if it’s diagnosed early. No. Unfortunately, there's no treatment that will reverse the progress of Alzheimer’s disease. However, although there are therapies and drugs that can slow down the neurodegeneration associated with Alzheimer’s, there is no known cure. Even so, early diagnosis has its benefits, like better symptom management, a safer patient environment and the ability to plan for the future.

Myth # 3: Alzheimer’s just affects older people. Some Alzheimer’s patients can get diagnosed in their 40’s or 50’s. The early onset Alzheimer’s is uncommon (just 5% of patients are diagnosed before age 65); an accurate diagnosis is important to help the family cope with the realities of the disease.

Myth # 4: A diagnosis of Alzheimer’s means your life is over. Many people live years or even decades, before the disease claims their lives. Alzheimer’s effects each patient differently. The disease is commonly divided into three stages. The first or “mild” stage is where the patient is able to live a mostly normal life. The middle or “moderate” stage requires more extensive care. And in the late or “severe” stage, the patient needs 24/7 supervision and medical assistance. Life many never be the same with an Alzheimer’s diagnosis, but it’s far from over.

Myth # 5: There’s little you can do to protect yourself financially, if you are diagnosed with the disease. A serious diagnosis of any type can drastically impact a family, but it’s important to understand that there are things you can and should do to help your loved ones manage what comes next, emotionally as well as financially. Look at these ways you can help:

• Create a list of all financial accounts;
• Review the titles and names on each account;
• Look at your options for paying for medical care, such as existing insurance policies, Medicare coverage, or other sources of funding;
• Consider designating a Durable Power of Attorney for Healthcare, so that a trusted person can make decisions for the patient if there’s an accident or incapacitation;
• Communicating preferences for living arrangements, medical assistance, and end-of-life care; and
• Be sure your will is up to date.

Speak with an elder law attorney, who will be able to help you and your family navigate this process. He or she will also be able to recommend local resources that will help make this journey as good as it can be.

Reference: The (Bryan TX) Eagle (October 4, 2018) “Alzheimer’s disease: Five common myths, busted”

Holden & Campbell, LLC – Annapolis Estate Planning

Are You or Will You Become a “Solo Ager”? - Annapolis Estate Planning

“Solo agers face unique challenges, as their needs begin to change.”

Did you know that a study from the Pew Research Center says about 20% of the 75 million baby boomers don’t have children—a figure that’s double what it was in the 1970s and one that’s expected to keep rising.

We mention this because these people need someone to count on to always be there, if they need help making decisions and managing their affairs as they get older.

NH Magazine’s recent article entitled “The Difficulties That Come With Solo Aging” says that, for those without children or parents who’re estranged from them, it’s frequently a tough question to answer.

Our country’s 15 million “solo agers” or “elder orphans” now comprise a demographic that’s unprecedented in American history. This relatively new segment of society has a unique set of challenges.

As your physical, intellectual, and emotional capacities diminish, a person on his own must determine how he will be able to make sound decisions on financial and legal issues, relationships, housing and healthcare. There are also more cases being reported of elder fraud, and new scams are designed to take money from seniors. An elderly person could also wind up lonely and penniless.

However, there is help. Professional guardians can assist the elderly in reviewing their financial statements, creating budgets, paying bills, keeping keep them organized and sorting mail and email to see what’s a legitimate bill or a solicitation or potential scam.

A guardianship, which is also known as a conservatorship, is a legal process that’s used when a senior can no longer make or communicate safe or sound decisions about himself person and/or his property, he’s become susceptible to fraud or undue influence. The fact that establishing a guardianship can remove substantial rights from a person means that it should only be considered after other alternatives have proven ineffective or are unavailable.

In addition to a court-ordered guardianship, there are other options. There are also certified geriatric care managers, certified daily money managers, as well as attorneys who specialize in elder law.

Solo agers should arrange a future legal guardianship for themselves, a person who will assume control in a fiduciary capacity, if they’re unable to make decisions for themselves. This may be a relative or a friend, as well as a professional fiduciary or private guardian.

In addition, everyone should have a healthcare directive and an estate plan. However, solo agers have a more urgent need to have these important documents in place, while they’re still somewhat young and healthy—because they don’t have an adult child who will fly in from the other side of the country to provide that assistance and guidance.

Talk to several potential guardians or fiduciaries and go with the one whose skills most closely fit your needs and with whom you feel the most comfortable. Check their references and credentials thoroughly. You can also select different people for different tasks, which gives you a critical system of checks and balances. Be certain that you understand exactly what services each will provide and their fees and get it all in writing.

Reference: NH Magazine (October 2018) “The Difficulties That Come With Solo Aging”

Holden & Campbell, LLC – Annapolis Estate Planning

Dementia and Estate Planning, From a Voice of Experience - Annapolis Estate Planning

Professionals who have had clients with family members suffering from dementia have a greater understanding of the challenges these families face. However, living through the experience personally is totally different.

When a loved one receives a diagnosis of dementia, as described in this deeply personal article from Financial Advisor, “The Limits of Financial and Estate Planning for Dementia,” the family has to begin immediately planning for the present and the future. It is a difficult journey. This story shares the family’s experience to help others.

The father was an extremely intelligent man, with a master’s degree in engineering and an MBA from a prestigious business school. When diagnosed with dementia, he and family members moved quickly to ensure that the correct documents were in place, working with a trusted estate planning attorney. The family’s plan worked well, as his father was able to be active for the early stages of the disease and never injured himself or anyone else.

The elderly, and especially those with dementia, are very vulnerable. They can make poor decisions and are targets of scam artists. There were attempts to scam this gentleman, but the damage was minimal, because there was good planning and good execution of the plan, as well as safeguards.

The man’s wife used the power of attorney to get the bank to maintain strict controls over their funds. There were offers of new credit cards, personal loans and home equity loans coming from the family’s bank. She was able to stop those offers from entering the house.

As his disease progressed and he spent late nights watching infomercials and surfing the net, things started to arrive at the house that were not needed. Limits were put on his credit card. He was removed as a co-trustee for the family’s living trust. The trust document simply required two doctors to remove him as a trustee, so he could not access brokerage accounts, write checks or do any online banking.

His living will was a huge help, when he entered hospice care. When a sibling from out of town arrived, she was outraged to hear that he was not being fed. At that point, he was expected to live only a few days, and that had been his request, which was documented in the living will. After reading it, she understood that this was his wish, and a potential problem was averted.

It wasn’t all neat and tidy. The bank process took time and there was a struggle over the power of attorney, as is commonly encountered. The POA is an important document and banks preferred, as do many institutions, to have their own forms done. Some of the doctors were not as respectful of his wishes, and some were hesitant about putting in writing a recommendation that he no longer drive.

 However, despite the difficulties, three things got this family through their father’s journey. The legal documents were in place, the family was nearby and able to help out, and there were friends and others who gave tremendous emotional support.

If you suspect that a family member may be experiencing early symptoms of dementia or Alzheimer’s, it’s time to sit down with an estate planning attorney and start to prepare for what the future will bring. An experienced estate planning attorney knows the documents that will need to be prepared and will also be able to guide the family to various resources.

Reference: Financial Advisor (September 25, 2018) “The Limits of Financial and Estate Planning for Dementia”

Holden & Campbell, LLC – Annapolis Estate Planning

Can Someone Become My Guardian Without My Knowing It? - Annapolis Estate Planning

What would happen if someone who you don’t know—or someone you do—decides you are not competent and tries to become your legal guardian? Could it happen?

The concept of guardianship for a senior is a difficult thing to consider. Maintaining your independence and remaining in charge of your own life would be at risk, if someone wanted to become your legal guardian, says nj.com , “Worried someone may want to be your guardian? Here's what you need to know.”

Let’s start by understanding what guardianship is, and how it works.

Guardians are appointed by a judge, for both minors and incapacitated individuals. An application is required to be made to the court in the state and county where the minor or alleged incapacitated person lives or where his or her property is located. In either situation, once the minor becomes 18, she receives the property. If the incapacitated person returns to full or partial competency, the court (upon application) may restore that person’s rights, which would dismiss or limit the guardianship.

A guardianship can be of the person. This is limited to making medical or similar decisions on an incapacitated person’s behalf, or concerning the person's property, or both. A guardianship can also be limited. This means that the guardian is appointed to only make certain decisions, like financial ones. A guardianship can also be plenary, which means the guardian can be appointed to address all issues.

When a guardian of an individual's property is appointed, the property is usually re-titled into the name of the guardian for the benefit of the incapacitated individual. This gives third parties notice of the guardianship.

In New Jersey, prior to an individual being appointed as the guardian of an alleged incapacitated person, that person has to be given notice of the proceedings. That person is also appointed an attorney by the court to advocate for them or to report to the court on their situation. Therefore, a senior would be given notice and legal representation.

The records of these types of proceedings aren’t open to the public, because of the confidential information in them, like certifications from physicians on the physical and mental condition of the alleged incapacitated person.

But, information on the name of the guardian who has been appointed to represent the incapacitated person should be available, so that third parties, including creditors, can know who to contact if they are providing good or services to that person.

Speak with an estate planning or elder law attorney, if you are concerned that someone may be considering applying for guardianship for you. They’ll know how to find out if this is true, and how you can protect yourself.

Reference: nj.com (August 24, 2018) “Worried someone may want to be your guardian? Here's what you need to know”

Holden & Campbell, LLC – Annapolis Estate Planning