What Should I Know about Guardianship?

In a perfect world, a child would be raised by its parents. However, this isn’t always possible, and legally enforceable decisions must sometimes be made to name the person who is best positioned to look after a child. Guardianship rules are very specific.  Guardianship is generally only needed when a person is incapable—whether legally or practically—of looking after their own affairs, says VENTS Magazine in the article “Legal Guardianship 101: What You Need to Know.”

Courts have the power to appoint guardians for adults and children. This is usually a person who is unable to make decisions for themselves.  It may be a disabled person, and guardians are appointed for children when parents consent to it, when their parental rights are removed by a court, or when both parents are dead or permanently incapacitated.

Guardians have duties as to both the protected person and their estate. The duties to the person include providing necessities, education and appropriate medical treatment, where necessary. As far as the estate of the protected person, the duties are to manage any funds properly and to spend them pursuant to the protected person’s needs. Guardians must prepare an inventory of assets within 60 days of their appointment to the role.

Custody is only granted for children. When appointed, a custodian is given parental rights over the child. Guardianship does not bestow these rights.  A guardian is appointed to take care of a protected person and to safeguard their estate. Biological parents, if alive, keep their parental rights over the child.

To become a guardian you must file a petition with the court. The documents need to be prepared correctly and a medical certificate must also be submitted. There will be a hearing on your application and must present proof (from a doctor, for example) that guardianship is necessary under the circumstances.

Guardianship litigation can be stressful,  so engage an experienced estate planning attorney to help you.

Reference: VENTS Magazine (April 13, 2020) “Legal Guardianship 101: What You Need to Know”

 

Am I Making One of the Five Common Estate Planning Mistakes?

You don’t have to be super-wealthy to see the benefits from a well-prepared estate plan. However, you must make sure the plan is updated regularly so these kinds of mistakes don’t occur and hurt the people you love most, reports Kiplinger in its article entitled “Is Anything Wrong with Your Estate Plan? Here are 5 Common Mistakes.”

An estate plan contains legal documents that will provide clarity about how you’d like your wishes executed both during your life and after you die. There are three key documents:

  • A will
  • A durable power of attorney for financial matters
  • A health care power of attorney or similar document

In the last two of these documents, you appoint someone you trust to help make decisions involving your finances or health, in case you can’t while you’re still living. Let’s look at five common mistakes in estate planning:

# 1: No Estate Plan Whatsoever. A will has specific information about who will receive your money, property and other property. It’s important for people, even with minimal assets. If you don’t have a will, state law will determine who will receive your assets. Dying without a will (or “intestate”) entails your family going through a time-consuming and expensive process that can be avoided by simply having a will.  A will can also include several other important pieces of information that can have a significant impact on your heirs, such as naming a guardian for your minor children and an executor to carry out the business of closing your estate and distributing your assets. Without a will, these decisions will be made by a probate court.

# 2: Forgetting to Name or Naming the Wrong Beneficiaries. Some of your assets, like retirement accounts and life insurance policies, aren’t normally controlled by your will. They pass directly without probate to the beneficiaries you designate. To ensure that the intended person inherits these assets, a specific person or trust must be designated as the beneficiary for each account.

# 3: Wrong Joint Title. Married couples can own assets jointly, but they may not know that there are different types of joint ownership, such as the following:

  • Joint Tenants with Rights of Survivorship (JTWROS) means that, if one joint owner passes away, then the surviving joint owners (their spouse or partner) automatically inherits the deceased owner’s part of the asset. This transfer of ownership bypasses a will entirely.
  • Tenancy in Common (TIC) means that each joint owner has a separately transferrable share of the asset. Each owner’s will says who gets the share at their death.

# 4: Not Funding a Revocable Living Trust. A living trust lets you put assets in a trust with the ability to freely move assets in and out of it, while you’re alive. At death, assets continue to be held in trust or are distributed to beneficiaries, which is set by the terms of the trust. The most common error made with a revocable living trust is failure to retitle or transfer ownership of assets to the trust. This is where you need the direction of an experienced estate planning attorney as this critical task is often overlooked after the effort of drafting the trust document is done. A trust is of no use if it doesn’t own any assets.

# 5: The Right Time to Name a Trust as a Beneficiary of an IRA. The new SECURE Act, which went into effect on January 1, 2020 gets rid of what’s known as the stretch IRA. This allowed non-spouses who inherited retirement accounts to stretch out disbursements over their lifetimes. It let assets in retirement accounts continue their tax-deferred growth over many years. However, the new Act requires a full payout from the inherited IRA within 10 years of the death of the original account holder, in most cases, when a non-spouse individual is the beneficiary. Therefore, it may not be a good idea to name a trust as the beneficiary of a retirement account. It’s possible that either distributions from the IRA may not be allowed when a beneficiary would like to take one, or distributions will be forced to take place at a bad time and the beneficiary will be hit with unnecessary taxes.

Talk to an experienced estate planning attorney and review your estate plans to make certain that the new SECURE Act provisions don’t create unintended consequences.

Reference: Kiplinger (Feb. 20, 2020) “Is Anything Wrong with Your Estate Plan? Here are 5 Common Mistakes”

 

Why Is Walt Disney’s Grandson Unable to Claim his $200 Million Inheritance?

Los Angeles County Superior Court Judge David J. Cowan recently claimed that Walt Disney’s grandson Bradford D. Lund had Down Syndrome—despite being presented with DNA evidence proving the opposite. The judge also ruled Lund to be “unfit” to receive his $200 million inheritance from Walt Disney and appointed him a temporary guardian to make all his legal decisions. This was all ordered without a hearing. Lund’s legal team is now trying to contest the rulings.

Inside the Magic’s recent article entitled “Walt Disney’s Grandson Sues Judge Claiming He Has Down Syndrome Without Evidence, Blocking $200 Million Inheritance” says that in the complaint, Lund’s attorney Lanny Davis alleges that the probate court’s action is “all too reminiscent of a perspective where facts do not matter but alternative facts do, where the constitution does not matter…”

The alternative facts Davis spoke of are from a 2016 court decision by Superior Court Judge Robert Oberbillig from a 10-day trial brought on by “disgruntled relatives” against Lund. The trial came after seven years of litigation questioning whether Lund was required to have a limited guardianship. In that trial, Lund was examined by two court-appointed physicians, one court-appointed expert and by Judge Oberbillig himself in open court.

From the investigation, Judge Oberbillig rejected the family’s claims that Lund needed guardianship and ruled that Lund was “not incapacitated.” However, Judge Cowan ignored Oberbillig’s ruling and the DNA evidence that showed Lund doesn’t have Down Syndrome. Instead, Cowan stated from the bench: “Do I want to give 200 million dollars, effectively, to someone who may suffer, on some level, from Down syndrome? The answer is no.”

From this statement, Lund’s legal team brought an additional cause of action that claims Judge Cowan and the Los Angeles Court violated an anti-discrimination law, when Judge Cowan made this “indisputably false” statement and “perception.” They claim this resulted in discrimination against Lund and his loss of freedom regarding the right to counsel and property rights without due process of law.

On Feb. 27, 2020, Lund’s counsel also filed a federal civil rights case in the U.S. District Court for the Central District of California against Judge Cowan for alleged violation of Lund’s constitutional due process rights in the appointment of a limited guardian ad lit em.

Lund was supposed to have received his portion of his mother’s trust fund when he was 35, which was 15 years ago. He is now 50 years old. Speak with your estate planning attorney if you have questions regarding your inheritance.

Reference:  Inside the Magic (March 25, 2020) “Walt Disney’s Grandson Sues Judge Claiming He Has Down Syndrome Without Evidence, Blocking $200 Million Inheritance”

Coronavirus News Should Make You Think about Estate Planning

The global Coronavirus (COVID-19) outbreak has many of us thinking about what could happen, if the disease spreads more fully across the general population. We all need to plan for what could possibly happen. To protect yourself and your family, it’s smart to be certain that you have the following these documents prepared and updated, says Motley Fool’s recent article entitled “The Coronavirus Should Have You Thinking About These 4 Things.”

  1. A will or revocable trust. Be sure that your assets will pass to those who you want to receive them after your death. This is critical during crisis times. You don’t want to make things any harder than they need to be. Create an estate plan to avoid potentially expensive and time-consuming processes like probate, which will have greater importance, if your family is confined to their homes in a quarantine situation.

A simple will can cover what happens to your assets at death. This typically works well, especially for modest estates. State laws differ on how complicated a probate process would be with a basic will. Some people opt to use a fully funded revocable trust that doesn’t require probate. For either a will or a revocable trust, make sure that it’s up to date and reflects your current preferences and family circumstances.

  1. Updated beneficiary designations. If you have an IRA, 401(k) account, or life insurance policy, those you name as beneficiaries of that account will receive the proceeds, despite a totally different from arrangement in your will or trust. Many of us also don’t designate any beneficiary for these accounts, which means added complications in the event of death.
  2. Healthcare power of attorney. When we’re in the midst of this Coronavirus, it’s even more urgent that you’ll be able to get the healthcare you need, if you’re hit with this illness. A durable power of attorney for healthcare will give the individuals you choose the ability to make whatever medical decisions you specify on your behalf. An estate planning attorney can help you draft documents that match your specific wishes.
  3. Financial power of attorney. You can designate an agent to help take care of your finances, if you become incapacitated or otherwise unable to handle your financial affairs. A general durable power of attorney for financial matters is another document that lets you delegate responsibility and authority to make financial transactions to the person you name.

Estate planning may not be the highlight of your week, but the Coronavirus outbreak has more people thinking about what they need to do. Make sure your family will have what they need even if something happens to you.

Reference: Motley Fool (March 8, 2020) “The Coronavirus Should Have You Thinking About These 4 Things”

Why Would I Need a Power of Attorney?

Recently Heard’s article entitled “6 Reasons to Choose a Power of Attorney” provides us with several reasons why you want to have one drafted.

  1. Choose Who Can Make the Decisions on Your Behalf. If you have a signed a power of attorney and later you become incapacitated and are unable to make decisions, the agent you named in your POA can step in on your behalf. Without a power of attorney, loved ones will need to go to court to request a conservatorship or guardianship and that can be expensive.
  2. Guardianship Not Needed. If you fail to sign a comprehensive power of attorney before you become incapacitated, you and your family have few options.

Someone will have to petition the court to appoint a guardian or a conservator. The judge will decide who will manage your financial health affairs. The court will also monitor the situation. This can be expensive, and you’ll have no say regarding who will be chosen to serve.

  1. Lets You Discuss Your Wishes. An important decision is who your agent will be. When a parent or loved one decides to sign a power of attorney, it offers the chance to discuss the wishes and the expectation with the family and the person who’s named as an agent in a power of attorney.
  2. Comprehensive Power of Attorney is Preferred. When you age your needs change. Your POA should reflect it.
  3. Your Intent is Clear. If you become incapacitated, relatives may need to go to court to determine your intent. However, a well-drafted power of attorney provides a healthcare directive, which can eliminate the need for the family members to have arguments or disagree over your wishes.
  4. Avoid Delays. With a comprehensive power of attorney, all the powers required to do effective asset protection planning are included. Note: if a power of attorney doesn’t include the specific power, it can reduce the ability of the agent and may lead to significant setbacks.

Want to write a power of attorney? Contact a qualified estate planning attorney.

Reference: Recently Heard (Jan. 30, 2020) “6 Reasons to Choose a Power of Attorney”

 

If I’m 35, Do I Need a Will?

Estate planning is a crucial process for everyone, no matter what assets you have now. If you want your family to be able to deal with your affairs, debts included, drafting an estate plan is critical, says Wealth Advisor’s recent article entitled “Estate planning for those 40 and under.”

If you have young children, or other dependents, planning is vitally important. The less you have, the more important your plan is, so it can provide as long as possible and in the best way for those most important to you. You can’t afford to make a mistake.

Talk to your family about various “what if” situations. It is important that you’ve discussed your wishes with your family and that you’ve considered the many contingencies that can happen, like a serious illness or injury, incapacity, or death. This also gives you the chance to explain your rationale for making a larger gift to someone, rather than another or an equal division. This can be especially significant, if there’s a second marriage with children from different relationships and a wide range of ages. An open conversation can help avoid hard feelings later.

You should have the basic estate plan components, which include a will, a living will, advance directive, powers of attorney, and a designation of agent to control disposition of remains. These are all important components of an estate plan that should be created at the beginning of the planning process. A guardian should also be named for any minor children.

In addition, a life insurance policy can give your family the needed funds in the event of an untimely death and loss of income—especially for young parents. The loss of one or both spouses’ income can have a drastic impact.

Remember that your estate plan shouldn’t be a “one and done thing.” You need to review your estate plan every few years. This gives you the opportunity to make changes based on significant life events, tax law changes, the addition of more children, or their changing needs. You should also monitor your insurance policies and investments, because they dovetail into your estate plan and can fluctuate based on the economic environment.

When you draft these documents, you should work with a qualified estate planning attorney.

Reference: Wealth Advisor (Jan. 21, 2020) “Estate planning for those 40 and under”

 

When Can Parent Legally Make an End-Of-Life Decision?

Twenty-one-year-old Damaire was brought to Erie County Medical Center in the early morning hours. Damaire’s father was told that the person found Gordon on the side of the road, wrapped in a blanket and dropped him off at the hospital. He was brain dead. He had no gunshot or stab wounds and there were no signs of blunt-force trauma.

“I thought I would be seeing my son hurt some type of way that was very bad,” said Gordon’s father Mister Sommerville. “But, when I got there I saw my son had no trauma…and they can’t explain to me why he’s lifeless.”

Sommerville was told by his son’s mother Regina Gordon-Sayles that their boy was brain-dead at the hospital.

WKBW’s recent article, “A man was found brain-dead, but neither parent could legally make an end-of-life decision” reports that Gordon-Sayles said that she was a single mother of five and said that Sommerville had not been involved in Damaire’s life. However, he became very involved when it came time to make a decision about his passing.  Damaire’s mother was set to remove her son off the respirator, but his father refused to consent. “I was so confused about why I needed another consent,” said Gordon-Sayles.

The problem is that neither parent could give legal consent to take their son off life support because Damaire hadn’t designated either parent as his health care proxy. Under Article 81 of the New York State Mental Hygiene Law, the matter would have to go to a judge who would start the process to appoint the best person to handle end-of-life decisions.

A medical power of attorney, also called an “Advance Directive” or “Health Care Proxy,” is a document that allows a person to provide someone with the authority to address health care decisions on their behalf, if they’re not able to do so themselves. You should contact an experienced estate planning attorney to prepare a Health Care Proxy.

Unfortunately, these situations occur more frequently than we would wish. Making a bad situation more heartbreaking is traumatic for the family.

The situation is a matter of liability for the hospital. Every person has the right to due process, when it comes to making decisions for themselves, even in death. However, if that person can’t make a decision for herself, a judge must intervene and appoint an appropriate party.

Damaire’s father didn’t like the care his son was getting at ECMC and wanted more of an investigation into why the young man was in a brain-dead state, when doctors found only marijuana in his system. Doctors told both parents that they were restricted in the type of drugs for which they could screen, without an autopsy.

Damaire’s case went before a judge to appoint a proxy. The judge decided to continue his investigation into the case and didn’t take any action for more than a week. Damaire’s heart stopped beating the next day. His mom said a friend of his told her the truth about what happened to him, days later.

“He got ahold of some fentanyl, and I don’t know if my baby was laced…I don’t know if he took it himself, but it had something to do with fentanyl.”

“I was told when it happened, my son went into attack mode, he dropped, and they put him on the porch because they didn’t want to be charged with it.”

Reference: WKBW (November 5, 2019) “A man was found brain-dead, but neither parent could legally make an end-of-life decision”

 

What are the Biggest Estate Planning Errors to Avoid?

Nobody likes to plan for events like aging, incapacity, or death. However, failing to do so can cause families burdens and grief, thousands of dollars and hundreds of hours.

Fox Business’ recent article, “Here are the top estate planning mistakes to avoid,” says that planning for life’s unexpected events is critical. However, it can often be a hard process to navigate. Let’s look at the top estate planning mistakes to avoid, according to industry experts:

  1. Failing to sign a will (or one that can be located). The biggest mistake is simply not having a will. Estate planning is critically important to protect you, your family and your hard-earned assets—during your lifetime, in the event of your incapacity, and upon your death. We all need estate planning, no matter the amount of assets you have. In addition to having a will it needs to be findable. The Wall Street Journal says that the biggest estate planning error is simply losing a will. Make sure your family has access to your estate planning documents and you name the estate planning attorney who prepared the documents for you. The attorney may have more information on your loved one that you think.
  2. Failing to name and update beneficiaries. An asset with a beneficiary designation supersedes any terms in a will. Review your 401(k), IRA, life insurance, and any other accounts with beneficiaries after any significant life event. If you don’t have the proper beneficiary designations, income tax on retirement accounts may have to be paid sooner. This may lead to increased income tax liability and the designation of a beneficiary on a life insurance policy can affect whether the proceeds are subject to creditors’ claims.

There’s another mistake that impacts people with minor children which is naming a guardian for minor children and then naming that person as beneficiary of their life insurance instead of leaving it to a trust for the child. A minor child can’t receive that money. It also exposes the money to the beneficiary’s creditors and spouse.

  1. Failing to consider powers of attorney for adult children. When your children reach age 18, they are adults in the eyes of the law. If something unfortunate happens to them, you may be left without any say in their treatment. In the event that an 18-year-old becomes ill or has an accident, a hospital won’t consult with their parents if a power of attorney for health care isn’t in place. Unless a power of attorney for property is signed, a parent may not be able to take care of bills, make investment decisions and pay taxes without the child’s signature. This could create an issue when your child is in college—especially if he or she is attending school abroad. It is very important that when your child turns 18 that you have powers of attorney put into place. Contact an experienced estate planning attorney and get a power of attorney prepared.

Reference: Fox Business (October 15, 2019) “Here are the top estate planning mistakes to avoid”

 

What are Some Estate Planning Tips for People Without Kids?

If you and your spouse don’t have children, the focus of your financial legacy may be quite different from what it would be if you were parents.

Motley Fool’s article, “5 Estate-Planning Tips for Child-Free Couples,” suggests that you may want to leave some of your money to friends, family members, charitable organizations, or your college. No matter the beneficiaries you choose, these estate planning tips are vital for childless couples.

  1. A will. You need a will because couples without children don’t have natural heirs to inherit their wealth. If you die without a will, your assets will go to your spouse. If neither of you has a will, the state intestacy laws determine which of your family members inherit from you. The family of the first spouse to die may be disinherited.
  2. A power of attorney. Who will make financial decisions for you, if you and your spouse become incapacitated? You can select a person to do this with a power of attorney (POA). You can name a person to pay bills, manage your investments and handle property matters, if you’re unable to do so yourself.
  3. Up-to-date beneficiaries. If you have retirement accounts or life insurance policies, the distribution of the proceeds at your death is made by a beneficiary designation, not by your will. A frequent beneficiary error is not keeping those designations current.
  4. Give money to charity now. You may think about leaving your assets to organizations that have enriched your life. You can set up a trust to be sure that your money goes where you want. Work with an experienced estate planning attorney.
  5. Remember the pets. If you have furry children, plan for their care when you’re not around to tend to them yourself. One option is to name a person to take care of your animal in your will. You can also put money into a trust specifically intended for the animal’s care or designate an organization that will provide lifetime care for your pet with money you earmark to that purpose. Contact an estate planning attorney to help you set up a trust.

Remember that child-free couples need an estate plan, just as much as couples with children.

Reference: Motley Fool (September 9, 2019) “5 Estate-Planning Tips for Child-Free Couples”

 

What Are The Essential Estate Planning Documents?

Forbes’ recent article, “Retirement, Estate Planning: Documents You Should Have,” says that in this time of life, while emotions are running high, it’s critical to be make sure your financial and legal matters are in order.

Putting together a well thought out financial plan and creating an estate plan lets you be certain that personal, financial, and health wishes will be carried out the way you want. Managing your estate, regardless of the size, starts with working with an experienced estate planning attorney who will help give you greater control, privacy and security of your legacy. Here are the documents you need to get started:

Will. This is a legal document that is used to detail your wishes regarding the distribution of your assets and property, as well as the care of any minor children, by naming a guardian in the event your pass away while they’re still young.

Durable Power of Attorney. This is a written authorization that gives a trusted family or friend the authority to act on your behalf in business, legal, and financial matters, if you’re unable to act for yourself due to a mental or physical disability. The requirements are different in each state, so ask your attorney about the right form and language to include.

Health Care Proxy. This is also known as a living will. It is another legal document that states your health care preferences in case you become incapacitated or unable to speak for yourself. It also allows you to say how you’d like your end-of-life care to be handled.

Information Document. Another important part of your estate plan is a document that contains bank account information, passwords, insurance policies, contact information for attorneys, financial planners and any other significant data regarding your personal estate and final wishes. It provides important information to family in the event of an emergency.

Plan for the future, by making certain that your loved ones know and are able to carry out your final wishes.

Reference: Forbes (August 28, 2019) “Retirement, Estate Planning: Documents You Should Have”