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Have a Plan for Life

Still Procrastinating about Your Estate Plan?

The continuing escalation of the COVID-19 pandemic has forced many people to finalize estate planning documents, even as their estate planning attorneys are working from home. People are coming to terms with the stark reality: they could be struck by the disease and need to have a plan in place, reports the article “Estate Planning In The Age Of Covid” from Financial Advisor.

Everyone should review their estate planning documents, including their wills, trusts and gifting techniques, to ensure that they are in line with their goals and the numerous tax law changes that have occurred in the last six months. The review of these estate planning documents is especially critical during these unpredictable times. Contact your estate planning attorney.

Here are the documents that may need to be updated:

Power of Attorney—This legal document gives a person you name the authority to handle financial affairs and protect property by acting on your behalf, if you become incapacitated.  Some of the typical tasks of your “agent” are paying bills, writing checks, selling or purchasing assets or signing tax returns.

You may name any competent adult you like. However, be certain to choose someone trusted who will put your interests above theirs. This person should possess common sense, ethics and financial acumen. Someone who lives near you, will be able to handle matters more expeditiously. Someone who is far away, may not be as effective. You should also name a back-up or secondary agent.  With no power of attorney, no one will be authorized to act on your behalf and your family will need to have the court appoint a conservator, which will take time and money.

Health-Care Proxy—This legal document gives an agent authority to make health-care decisions on your behalf, if you are unable to do so. Without one, the family of anyone over the age of 18 will need to go to court and have a guardian appointed.

Last Will and Testament—Your last will is the legal document that gives directions to how you want your property to be distributed after you die. It is used to appoint an executor to oversee the distribution of your assets. For parents of minor children, this is the document used to name a guardian to raise your children. If you don’t have a last will, the court will choose who will raise your child, who will distribute your assets and who will oversee your estate. It is much better to handle this in advance, so you are in control of these important decisions.

Living Trust—A revocable trust is a legal contract that creates an entity to hold title to your assets. As the grantor or creator of the trust, you can change it at any time. You can also set it to outlive you. If you become incapacitated, a successor trustee then steps in and manages your affairs without any court intervention. A trust also gives you privacy, since it avoids the probate process.

There are many estate planning tools that may be used to pass wealth to the next generation, minimize taxes, and ensure that your legacy continues, even during these unprecedented times. Reach out to an experienced estate planning attorney to create your estate planning tools.

Reference: Financial Advisor (June 16, 2020) “Estate Planning In The Age Of Covid”

 

What Must Be Done when a Loved One Dies?

When a member of a family dies, it falls to the people left behind to pick up the pieces. Someone has to find out if the person left a last will, get the bills paid, stop Social Security or other automatic payments and file final tax returns. This is a hard time, but these tasks are among many that need to be done, according to the article “How to manage a loved one’s finances after they die” from Business Insider.

This year, more families than usual are faced with the challenge of taking care of the business of a loved one’s life while grieving a loss. When death comes suddenly, there isn’t always time to prepare.

The first step is to determine who will be in charge. If there is a will, then it contains the name of the person selected to be the executor. When a married person dies, usually the surviving spouse has been named as the executor. Otherwise, the family will need to work together to pick one person, usually the one who lives closest to the person who died. That person may need to keep an eye on the house and obtain documents, so proximity is a plus. In a perfect world, the person would have an estate plan, so these decisions would have been made in advance.

Don’t procrastinate. It is hard, but time is an issue. After the funeral and mourning period, it’s time to get to work. Obtain death certificates, and make sure to get enough certified copies—most people get ten or twelve. They’ll be needed for banks, brokerage houses and utility service providers. You’ll also need death certificates for taking control of some digital assets, like the person’s Facebook page.

The first agency to notify is Social Security. If there are other recurring payments, like VA benefits or a pension, those organizations also need to be notified. Contact banks, insurance companies, and financial advisors.

Get the person’s credit cards into your possession and call the credit card companies immediately. Fraud on the deceased is common. Scammers look at death notices and then go onto the dark web to find the person’s Social Security number, credit card and other personal identification info. The sooner the cards are shut down, the better.

Physical assets need to be secured. Locks on a house may be changed to prevent relatives or strangers from walking into the house and taking out property. Remove any possessions that are of value, both sentimental or financial. You should also take a complete inventory of what is in the house. Take pictures of everything and be prepared to keep the house well-maintained. If there are tenants or housemates, make arrangements to get them out of the house as soon as possible.

Accounts with beneficiaries are distributed directly to those beneficiaries, like payable-on-death (POD) accounts, 401(k)s, joint bank accounts and real property held in joint tenancy. The executor’s role is to notify the institutions of the death, but not to distribute funds to beneficiaries.

The executor must also file a final tax return. The final federal tax return is due on April 15 of the year after death. Any taxes that weren’t filed for any prior years, also need to be completed.

This is a big job, which is made harder by grief. Your estate planning attorney may have some suggestions for who might be qualified to help you. An attorney or a fiduciary will take a fee, either based on an hourly rate for services performed or a percentage of the entire value of the estate. If no one in the family is able to manage the tasks, it may be worth the investment.

Reference: Business Insider (May 2, 2020) “How to manage a loved one’s finances after they die”

 

What Do I Do with My Late Mom’s Stimulus Check?

What do you do with a stimulus check delivered to your loved one who’s passed away? The word is that these checks will have to be returned. However, right now there’s been no official guidance on how to go do this.

U.S. Treasury Secretary Steve Mnuchin was quoted in the Wall Street Journal as saying heirs should be returning money sent in the name of someone who died. However, that’s it. No one will elaborate, says KOMO’s April article entitled “Heirs may have to return stimulus money sent to the deceased, but how and when?”

Payments to the dead have been trouble ever since the stimulus checks started to be sent out. The federal government isn’t telling anyone the number of dead people who got the checks, but consumers are reporting them from across the U.S. Even with the published reports that the government would like heirs to return the economic impact payments sent to the deceased, there still has been no official comment and no information addressing the issue on either the U.S. Treasury or IRS websites.

Add to this, the fact that some people are receiving conflicting information from tax professionals about their rights to the money. Some people say they were informed that if the person was living as of January 2, then their survivors could keep the cash. However, in a transcript of an April 17 White House briefing, President Trump was asked about checks to dead people.

Trump said, “we’ll get that back.”

If you still have stimulus money sent to someone who has passed away, don’t spend it. Keep it and monitor the IRS and Treasury websites for instructions on what to do with the stimulus check.

If you have questions about steps to follow regarding the passing of a loved one, contact an experienced estate planning attorney.

Reference: KOMO (April 29, 2020) “Heirs may have to return stimulus money sent to the deceased, but how and when?”

 

Keeping Yourself and Loved Ones Safe during the Pandemic

The numbers are frightening, especially for those over 80. By the time seniors with COVID-19 are admitted to the hospital, it’s usually too late to do anything about their legacy. This topic was taken up recently in the article “Tips for protecting seniors and their legacy in the pandemic” from My Edmond News. That includes creating a last will and testament, naming a health care power of attorney, or having a conversation about their end-of-life wishes. Here are thoughts on how to stay safe and prepare for the worst.

Follow the recommended health guidelines and be careful. Hand washing, social distancing, avoiding crowds, wearing masks and cleaning surfaces are very important for seniors. Online shopping or going to the grocery store during senior hours are better choices, if you have a choice.

Beware of scammers. Scammers who target the elderly use their fear of the pandemic to provoke action. One of the latest scams is a phone call from someone claiming to be a contact tracer, saying they are tracking people who have been exposed to COVID-19. They ask for Social Security numbers, birthdays and zip codes. No legitimate contact tracer will ask these questions.

Make a plan for your digital assets. Seniors are active on Facebook, use email and a variety of apps to stay in touch with grandchildren and manage their finances. Make a list of all of your online accounts and passwords, so that a trusted family member or friend will be able to help, if you are incapacitated or die. Untangling digital assets is much more complex than tangible assets—there’s no paper trail to follow.

Get your legal affairs in order now. Depending on your state of residence, you may be able to have documents witnessed and notarized remotely. Your estate planning attorney will know what the current rules are and be able to get documents prepared.

Create a Power of Attorney. This will let the person you name as POA take care of your finances, pay bills and keep your financial life from falling apart if you become ill.

Have a Health Care Power of Attorney created. This allows the person you name to get information on your medical decisions and make health care decisions, if you cannot.

Use an estate planning attorney to have these documents created. They are powerful documents, and their advice in helping select the right person can prevent a world of trouble in the future. The estate planning attorney who hears you say “Well, my nephew is the only one, but he’s been in and out of rehab for six years now,” can help you make a better choice!

Have a Will, or Last Will and Testament, created by an estate planning attorney. A professionally prepared last will sets out your wishes for distribution of your assets and is legally enforceable.

Update your beneficiaries. Distributions from accounts including IRAs, pensions and life insurance policies are not governed by your last will, but by the beneficiaries you name. As your life changes, these need to be updated. You really don’t want an old boyfriend or ex-spouse receiving your entire life insurance policy.

Once you have your estate plan done, you’ll realize it was easy to do, and well worth the peace of mind of knowing that you and your loved ones are protected.

Reference: My Edmond News (June 1, 2020) “Tips for protecting seniors and their legacy in the pandemic”

 

What are the Most Important Items in an Estate Plan During the Pandemic?

KCRA’s article entitled“5 things to know about estate planning” says that estate planning is a topic that people frequently don’t like to think about. However, more people now want to create a will or revise one that’s already in existence, because of the COVID-19 pandemic.

You should have a will. You can find forms online, or you can (in some states) use a holographic will, which is handwritten. However, a holographic will can be incomplete and unclear. Do It Yourself estate planning isn’t a good idea if you have any property, minor children, or want to save on taxes for your family. Use an experienced estate planning attorney to ensure that you are covering all of your bases.

Without a will, your “state” makes one for you. If you die intestate, state law will dictate how your probate estate will be distributed at your death. However, this makes it take longer to administer your estate, which extends the grieving process for family members.  It is also more expensive, more time-consuming and more work for those you leave behind. Lastly, you have no say in how you want your property distributed.

Why do I need a will? Everyone should think about estate planning and have an estate plan in place. This should include what would happen, if you’re incapacitated. With the coronavirus pandemic, this might mean contracting the disease and being in a hospital on a ventilator for weeks and unable to care for your children.

How long does a will take? Drafting your will is a very personal and customized process that usually happens over several meetings with a qualified estate planning attorney. It could be weeks or months, but the average length of time it takes to create a will is 30 to 60 days. However, in the midst of the pandemic, estate planning attorneys are able to get these completed much more quickly, when necessary.

What about COVID-19? When your will is complete, there’s usually a signing meeting set with the attorney, witnesses, a notary and the person creating the will. However, now there’s no way to safely gather to sign these critical documents. Many states have made exceptions to the witness rule or are allowing processes using technology, known as remote notarization.

Reference: KCRA (April 16, 2020). “5 things to know about estate planning”

 

Why You Need an Advance Directive Right Now

The number of Americans who have died in the last few months because of COVID-19 is staggering, reports Inside Indiana Business in an article that advises readers to “Get Your Advance Directives in Place Now.” Just talking with family members about your wishes is not enough. You’ll need to put the proper legal documents and why you need an Advance Directive or Health Care Proxy right now. It’s not that hard, and it is necessary.

Only one in three Americans has completed any kind of advance directive. Many younger adults don’t feel the need to complete these documents but there have been many examples that prove this is the wrong approach. Both Terri Schiavo and Karen Ann Quinlan were only in their twenties when they were not able to make their wishes known. Family members fought in and out of court for years.

The clinical realities of COVID-19 make it hard for healthcare workers to determine their patient’s wishes. Visitors are not permitted, and staff members are overwhelmed with patients. COVID-19 respiratory symptoms come on rapidly in many cases, making it impossible to convey end-of-life wishes.

Advance directives/Health Care Proxies are the written instructions regarding health care decisions, if you are not able to communicate your wishes. They must be in compliance with your state’s laws. The most common types of advance care directives are the durable power of attorney for health care and the living will.

A Health Care Proxy names a person who is usually a spouse or family member to be a health care agent. You may also name alternative agents. This person will be able to make decisions about your health care on your behalf, so be sure they know what your wishes are.

A living will is the document that states your wishes about the type of care you do or don’t want to receive. Living wills typically concern treatments like CPR (cardiopulmonary resuscitation), breathing machines (ventilators), dialysis, feeding tubes and certain treatments, like the use of an IV (intravenous, meaning medicine delivered directly into the bloodstream).

Studies show that people who have properly executed advance directives are more likely to get care that reflects their stated preferences.

Traditional documents will cover most health situations. However, the specific symptoms of COVID-19 may require you to reconsider opinions on certain treatments. Many COVID-19 patients need ventilators to breathe and do subsequently recover. If in the past you wanted to refuse being put on a ventilator, this may cause you to reconsider.

Almost all states require notarization and/or witnesses for advance directives and other estate planning documents to be valid. Many states, including Indiana and New York, now allow for remote notarization.

Talk with your estate planning attorney about putting all of your estate planning documents in order.

Reference: Inside Indiana Business (June 8, 2020) “Get Your Advance Directives in Place Now”

 

Why You Need an Estate Plan, Especially Now

Estate planning is an all-encompassing term that refers to the entire process of gathering and organizing assets and making preparations for when you die, including caring for minor children and heirs. It also includes putting protections into place if you should become incapacitated, says an article that covers estate planning basics from c|net titled “Estate planning 101: Your guide to wills, trusts and all your end-of-life documents.” Your estate plan involves writing a will, power of attorney and funeral arrangements and especially now,  why you need an estate plan.

Here are some of the key steps:

Distributing assets. Your estate includes more than just real estate. It includes everything you own, including your car, jewelry, sentimental belongings and intangible assets, like investments and insurance. If you own a business, that is also part of your estate.

Preparing for family life without you. An estate plan sets out how you want to care for loved ones. A will is used to name a guardian for minor children, and to name someone to be in charge of their finances. One person can have both roles, but it is generally advised to name one person for each role. If you fail to name a guardian, the court will select one for your children.

Assign the tasks of handling the estate or your health, if you are incapacitated. An estate plan includes a Health Care Proxy or medical power of attorney and a financial power of attorney, so decisions can be made on your behalf, if you are incapacitated. You’ll also name an executor. This is the person who will be in charge of following the directions you leave in your will and distributing assets. Depending on your estate, the person may also be in charge of selling your home, negotiating with creditors, or managing the sale of your business. It’s a big assignment and requires someone who is organized and trustworthy.

Work with an experienced estate planning attorney. An estate planning lawyer will save you a lot of time, energy and effort in creating an estate plan. The attorney will also be able to help you manage estate, inheritance and gift taxes to minimize the impact of federal and state laws on your beneficiaries.

Document everything properly. Just stating your wishes won’t solve anything. You need an estate plan with all of the right documents prepared in accordance with the laws of your state. An invalid will could create just as many problems as no will at all. You’ll need a last will and testament to appoint an executor, outline how you want assets to be distributed and see your will through the probate process.

If you want to avoid probate court, you may want your estate plan to include a trust. A “funded” revocable trust can be adjusted while you are living. When you die, the trust is managed by trustees of your trust.

A living will details your healthcare preferences, in case you are not able to communicate or make decisions on your own. If you require life support, or life saving measures, the living will specifically outlines what you want to have done—or not done—rather than having children or relatives guess at your wishes.

Having an estate plan is not a set-it-and-forget-it plan. As you proceed through life, getting married, having children, divorcing, buying property, etc., the estate planning documents need to be revised, so they continue to reflect your wishes. Whenever there are big changes to the law, you may also need to revise the will, so you don’t miss out on any planning opportunities. Contact an experienced estate planning attorney if you need to get your affairs in order.

Reference: c|net (June 8, 2020) “Estate planning 101: Your guide to wills, trusts and all your end-of-life documents”

Suggested Key Terms: Estate Planning Attorney, Wills, Trusts, End-of-Life, Revocable, Probate, Living Will, Executor, Health Care Power of Attorney, Guardian,

Is Your Covid-19 Essential Estate Planning ‘Go Package’ Ready?

When a person gets sick or dies, the family will frequently try to hunt for their estate planning documents or the contact information of an attorney who might know about them. Is your essential estate planning package ready?

Forbes’ recent article entitled “The Covid-19 Essential Estate Planning ‘Go Package’” says that it’s a good idea to have all your estate planning documents complete and current. However, all that effort and expense doesn’t do much good if your family doesn’t know about the documents or have access to them.  There can be horrible consequences, when the important components of the estate plan aren’t immediately known and accessible to your family especially if you fall ill. Medical and financial decisions and actions will be delayed or won’t be made by the people you wanted.

To avoid this, especially during the pandemic, create a “go package” of essential estate plan items and have the package available. Be certain that your family is aware of it and where to find it. This go package must contain the primary estate planning documents: medical power of attorney/advance medical directive, financial power of attorney and will. The medical documents are the most fundamental in this package. Without these, the hospital and doctors won’t know your wishes for medical treatment or who should help make decisions. If you do not have your estate planning package put together, you should reach out to an experienced estate planning attorney to assist you in preparing one.

In addition, put a copy of your insurance card and any related information in the package. This might include a Medicare card and information about any Medicare supplement and Part D prescription drug coverage you have. It will go much more smoothly at the hospital, if the medical insurance details are immediately available. Your important medical history should be included.

Adding a list of essential personal information also is important, including full legal name, Social Security number, birth date, emergency contacts and contact information for your doctors and your estate planning attorney. You can prepare your go package in a digital format, such as on a thumb drive or similar device that is on your key ring or kept near you. However, others must be aware of it for it to be used. Therefore, let your family and decision makers know where you keep the digital package and consider providing them with copies or keeping one clearly labeled near your door.

With a go package, you and others don’t need to hunt for all of this information. If you’re already at the hospital, ask someone to go retrieve it.

Reference: Forbes (May 27, 2020) “The Covid-19 Essential Estate Planning ‘Go Package’”

 

Should I Have an Advance Directive in the Pandemic?

Advance directive is a term that includes living wills and health care proxies or powers of attorney. These are legal documents we all should have. A living will allows you to tell your family and doctors the types of medical care you want at the end of your life. Health care proxies let you name someone to make medical decisions for you, if you can’t verbally communicate.

WTOP’s recent article entitled “Advance medical directives vital during COVID-19 pandemic” says that you need both because not all medical situations will trigger a living will. In fact, a living will is only really applicable, if you have an end stage process, a persistent vegetative state, or a terminal illness. People often run into a situation where they have a health event, but it’s not something that’s going to end in their death. An estate planning attorney can draw up advance directives, when they’re creating your estate plan.

When selecting the individual to grant the power to make decisions for you, consider who would be most capable of advocating for what you want, rather than what they, other family members or a medical provider might want. You should also name a backup in the event your first choice can’t serve and make sure these advocates understand your wishes. Give copies of the documents to them and go through what you want.

Your estate planning attorney will follow your state’s rules about how to make these documents valid, such as having witnesses sign or getting the paperwork notarized.  Next, keep the originals in a safe place at home, along with your will and tell your family where to locate them. Your physician and estate planning attorney should also have copies. Tell your doctor to add the forms in your electronic health record. That way, other medical providers can access it in an emergency. You should also carry a card in your wallet that has your health care agent’s name and contact information, as well as where you keep the originals and copies.

If your choices could cause stress for your family, consider including a note explaining your thinking. Even if they disagree with your decisions, it is more comforting to hear it directly from you, rather than the person you named to act on your behalf.

Reference: WTOP (June 1, 2020) “Advance medical directives vital during COVID-19 pandemic”