When Should I Consult with an Elder Law Attorney?

Elder law attorneys assist seniors or their family caregivers with legal issues and planning that related to the aging process. These attorneys frequently help with tax planning, disability planning, probate and administration of an estate, nursing home placement and many other legal issues.

Forbes’ recent article entitled “Hiring an Elder Law Attorney,” explains that elder law attorneys are specialists who work with seniors or caregivers of aging family members on legal matters that older adults face as they age. Many specialize in Medicaid planning to help protect a person’s financial assets, when they have Alzheimer’s disease or another debilitating illness that may require long-term care. They can also usually draft estate documents, including a durable power of attorney for health and medical needs, and even a trust for an adult child with special needs.

As you get older, there are legal issues you, your spouse or your family caregivers face. These issues can also change. For instance, you should have powers of attorney for financial and health needs, in case you or your spouse become incapacitated. You might also need an elder law attorney to help transfer assets, if you or your spouse move into a nursing home to avoid spending your life savings on long-term care.

Elder law attorneys can help with a long list of legal matters seniors frequently face, including the following:

  • Preservation and transfer of assets
  • Accessing health care in a nursing home or other managed care environment and long-term care placements
  • Estate and disability planning
  • Medicare, Social Security and disability claims and appeals
  • Supplemental insurance and long-term health insurance claims and appeals
  • Elder abuse and fraud recovery
  • Conservatorships and guardianships
  • Housing discrimination and home equity conversions
  • Health and mental health law.

Reference: Forbes (Oct. 4, 2021) “Hiring an Elder Law Attorney”

What is the Difference between Conservatorship and Guardianship?

Just as different states have different laws and use different legal terms in estate planning, each state has their own laws and terms about guardianship and conservatorship, explains a recent article from Real Simple, “Everything You Need to Know About Guardianship, Conservatorship, and Legal Dependents.”

Guardianship and Conservatorship mean different things in different states, but both refer to legal proceedings used to make one person, guardian or conservator, responsible and in charge of another person, often known as a ward. In some states, guardianship concerns a ward who is a minor and conservatorship concerns a ward who is an adult. Your estate planning attorney will be able to clarify the rules of your state.

In general, guardianship is not something we like to think about. Who wants to consider two parents dying and leaving a child or children utterly alone? However, if you have children, you must protect them, and you do so by naming a guardian in your will. In this way, your children will be raised by someone you know and trust.

If no guardian is named, the court names a person to raise your children, and there are no requirements for the court to pick a family member.

Guardianship can be contested. People who want to become guardians of children may file a petition in court to become the child’s legal guardian. However, it is easier for all concerned when parents do this in their will or other means allowed by state law.

Conservatorship of an adult is necessary when an adult becomes incapacitated and cannot make informed decisions about medical care, financial or legal matters, or manage daily living. This may occur because of an accident, illness, stroke, or having a mental illness or disability.

An estate planning or elder law attorney files papers with the court to attain the status of conservatorship. Only a court may grant conservatorship after hearing evidence that an adult lacks mental capacity and needs this level of help.

If someone has filed for conservatorship for you, you have the right to retain an attorney and object to the petition or take action to select a different person to act as your conservator.

We also hear the term “legal dependent” used for a few different situations. A legal dependent is a qualifying child or relative who is claimed by a taxpayer on their taxes. They must be under 19 or under 24 if a full-time student. Someone who is legally deemed permanently disabled may be a legal dependent regardless of their age and they don’t have to live with you to qualify. Let’s say you have a parent who has little, or no income and you provide them with more than half (50%) of their total support. You may claim them as a dependent on your taxes.

There are many different situations and rules for guardianship, conservatorship and legal dependents. Meet with a local estate planning attorney to navigate these complex matters correctly, so you may focus on caring for loved ones.

Reference: Real Simple (Sep. 20, 2021) “Everything You Need to Know About Guardianship, Conservatorship, and Legal Dependents”

How Does a Conservatorship Work?

Kiplinger’s recent article titled “Britney Spears’ Sad Song … Warning: This Could Happen to You” says that conservatorship is a topic that’s been in the news lately with Britney’s recent court battle.

In Britney’s case, while there has not been any evidence alleged of actual fraud or financial abuse in her conservatorship, she lost nearly all control over her finances, her business affairs and the most personal aspects of her life.  She also doesn’t want her father to be the person to hold that much power or control over her life.

A judge can take charge of an individual’s personal and financial decisions and appoint a third party to make decisions almost on an unlimited basis. These proceedings can exact a significant emotional toll and be tremendously expensive and time-consuming.

Conservatorship can happen to anyone, if and when you’re too disabled (due to an accident or illness) or too incompetent (due to infirmity of mind, old age or dementia, or a similar condition) to handle your own affairs.

If your estate plan addresses this with a chain of command to act on your behalf, no formal court proceedings would be required. Your wishes can be honored, and all the drama like that which Britney Spears has endured can be avoided.

If you are under age 60, there is a four to five times greater likelihood that you’ll become disabled, due to an accident or illness, for a period of more than one year, than your chances of dying. This is because modern medicine can often prevent death but not cure the illness or condition causing the disability. If you’re over age 60, there’s a 70% chance that, during your remaining lifetime, you’ll be too disabled or incompetent to act for yourself, for a period of at least two to 2½ years.

However, Britney Spears’ battle to end her court-ordered conservatorship took an unexpected turn recently, when her father and the conservator of her estate, Jamie Spears, filed a petition to end the arrangement. Mr. Spears cited his daughter’s pleas at two separate court hearings over the summer in his request to terminate the 13-year conservatorship.

“Recent events related to this conservatorship have called into question whether circumstances have changed to such an extent that grounds for establishment of a conservatorship may no longer exist,” the filing states.

Reach out to an experienced estate planning attorney for more information.

Reference: Kiplinger (July 14, 2021) “Britney Spears’ Sad Song … Warning: This Could Happen to You”

 

What Should You Know about Guardianships and Conservatorships?

Guardianships and conservatorships are regulated by state and local statutes, so the details vary. In many states, a guardian refers to someone who oversees personal needs, such as healthcare, feeding and supervision and/or financial affairs. However, there are states where the term “guardian” refers to those who oversee personal affairs, and a conservator refers to those who oversee financial affairs.

Barron’s recent article entitled “Here’s What to Know About Guardianships and Conservatorships to Avoid Problems” explains that state courts have the power to appoint guardians or conservators for adults who are at risk because they are unable to make basic decisions for themselves. These arrangements can only be revoked by the court.

“[O]nce a guardian is appointed, the court is simultaneously removing the individual’s right to make that decision for themselves,” says Nina Kohn, a law professor at Syracuse University in the article. “If a court found that I lacked the capacity to make my own healthcare decisions, and appointed a guardian to make those decisions, I would lose the right to make my own healthcare decisions.”

While the exact figures are unknown, a 2015 survey by the National Center for State Courts estimated there were $50 billion in assets under state courts’ watch in conservatorships. The research also found that there were an estimated 1.3 million open conservatorship or guardianship cases.

A guardianship is usually requested by a family member who engages an elder law attorney to petition the court. However, it may also be requested by a friend, nursing home, state or local government agency, or a professional guardian. Guardians must give the court regular details about the property or funds they manage for those they are appointed to help. A professional guardian may charge the person subject to guardianship reasonable fees for handling their affairs.

After a petition for a guardian is made, generally notice is given to the individual, close relatives and others involved in the individual’s life. The court will then appoint an independent evaluator, such as a social worker, psychiatrist, doctor, nurse, or attorney. A guardian may be appointed without those procedures, if the court finds that there’s an emergency.

A guardian may solely manage an elderly person’s finances, or they may be granted the broad power to determine where the person lives, how their money is spent and what medical treatments they get. A guardian may prepare a budget based on the person’s finances, arrange to have meals delivered, arrange for recreation, or seek court approval to move the person to an assisted-living facility, among other duties.

In light of the fact guardianships may convey broad powers, they should be considered a last resort. A major issue with guardianships in the U.S. is that courts routinely strip individuals of all their rights, instead of tailoring the arrangement to fit the person’s needs. If one plans ahead, a guardianship is almost entirely preventable. To do this, you should have estate planning documents in order, including a will, a trust, power of attorney, medical power of attorney and a living will. Review your estate plans regularly with an experienced elder law attorney and update your documents, as needed.

Reference: Barron’s (Aug. 28, 2021) “Here’s What to Know About Guardianships and Conservatorships to Avoid Problems”

What Is Elder Law?

With medical advancements, the average age of both males and females has increased incredibly.  The issue of a growing age population is also deemed to be an issue legally. That is why there are elder law attorneys.

Recently Heard’s recent article entitled “What Are the Major Categories That Make Up Elder Law?” explains that the practice of elder law has three major categories:

  • Estate planning and administration, including tax issues
  • Medicaid, disability, and long-term care issues; and
  • Guardianship, conservatorship, and commitment issues.

Estate Planning and Administration. Estate planning is the process of knowing who gets what. With a will in place, you can make certain that the process is completed smoothly. You can be relieved to know that your estate will be distributed as you intended. Work with an experienced estate planning attorney to help with all the legalities, including taxes.

Medicaid, Disability, and Long-Term Care Issues. Elder law evolved as a special area of practice because of the aging population. As people grow older, they have more medically-related issues. Medicaid is a state-funded program that supports those with little or no income. The disability and long-term care issues are plans for those who need around-the-clock care. Elder law attorneys help coordinate all aspects of elder care, such as Medicare eligibility, special trust creation and choosing long-term care options.

Guardianship, Conservatorship, and Commitment Matters. This category is fairly straightforward. When a person ages, a disability or mental impairment may mean that he or she cannot act rationally or make decisions on his or her own. A court may appoint an individual to serve as the guardian over the person or as the conservator the estate, when it determines that it is required. The most common form of disability requiring conservatorship is Alzheimer’s, and a court may appoint an attorney to be the conservator, if there is no appropriate relative available.

Contact a local estate planning or elder law attorney if you have questions.

Reference: Recently Heard (May 26, 2021) “What Are the Major Categories That Make Up Elder Law?”

 

What Is a Conservatorship?

A conservator is appointed by a judge. This person handles the estate of an incapacitated adult, as well as their finances, their basic affairs and everyday care. Administrative matters such as Medicare, insurance, pensions, and medical coverage are all also managed by the conservator. The conservator must keep meticulous records that are subject to review by the judge.

The Advocate’s recent article entitled “Alzheimer’s Q&A: What is adult guardianship?” explains that a conservatorship typically lasts as long as the individual lives. The conservator may change because of death, relocation, or an inability to manage the conservator duties and responsibilities. A judge also has the power to replace the conservator, if he or she is repeatedly making poor decisions or neglecting required responsibilities.

A conservator can be wise in some situations because it lets family members know that someone is making the decisions. It also provides clear legal authority to deal with third parties. There is also a process in which a judge will approve any major decisions. However, appointing a conservator can be expensive. An experienced estate planning attorney or elder law attorney must complete court paperwork and attend court hearings. A conservatorship can also be time-consuming due to the required ongoing paperwork.

A big question is when it is appropriate to seek conservatorship. If the individual has become mentally or physically incapable of making important decisions for himself or herself, then it would be smart to have a court-appointed guardian. Moreover, if the person does not already have legal documents in place, like a living will or power of attorney, then the conservatorship would benefit in covering decisions about personal and financial matters.

Even if the individual has a power of attorney for both health care and finances, he or she might need a conservator to make decisions about his or her personal life. This can include topics, such as living arrangements and who is allowed to visit. It is not always easy to determine if an individual can make decisions, but a judge understands that a conservator is viable for those with advanced Alzheimer’s or other forms of dementia.

Families that want to set up a conservatorship need to file formal legal papers and participate in a court hearing before a judge. Evidence of the physical and mental condition of the individual requiring conservatorship must be clearly presented. The person who is the subject of the conservatorship has the opportunity to contest it. Ask an experienced estate planning or elder law attorney who specializes in conservatorships about your specific situation.

Reference: The Advocate (Jan. 25, 2021) “Alzheimer’s Q&A: What is adult guardianship?”

 

How to Plan for a ‘Fragile’ Beneficiary

Frequently, estate plans will include an inheritance for a minor beneficiary. If you have minor children, you should spell out exactly what you want as far as who will care for your children and how your children’s financial needs will be met.

Wealth Advisor’s recent article entitled “Handle with care: Tips on planning for the fragile beneficiary” explains that if a minor child inherits property outright, the court will usually appoint a conservator to handle the property until the minor reaches 18. Because of this some parents make use of a trust which lets the assets be available for a minor’s benefit but held under terms you set when establishing the trust. A trustee oversees this. Contact an experienced estate planning attorney to assist you in setting up an estate plan to establish a trust.

A beneficiary with a disability. In some cases, a loved one with a disability may be receiving needs-based government benefits. To make certain that an inheritance doesn’t disrupt those benefits, many parents or guardians ask an experienced estate planning or elder law attorney to create a special needs trust (SNT). This is an irrevocable discretionary trust created by the parent in many cases for the benefit of a child with special needs. When set up correctly, the special needs trust won’t be considered an available resource for the purpose of determining eligibility for needs-based government benefits.

Incentive planning. Another aspect of estate planning is to use your assets to influence your loved one’s values and future behavior. A trust with incentive or disincentive provisions may help guide the choices and actions of your family, even after you have died.

Advanced planning for successful beneficiaries. If you plan to leave assets to a beneficiary who has the potential to incur significant personal liability due to his or her profession, ask your estate planning attorney about an irrevocable discretionary lifetime trust. If an inheritance is left to such a person without any protections, it may be attached by a judgment creditor upon distribution. A successful beneficiary may also need tax planning. If the beneficiary’s inheritance is properly left in a lifetime trust with the help of an experienced estate planning attorney, it may be removed from his or her taxable estate for federal estate tax purposes.

Although estate planning may be thought of as a way to transfer your assets to your family in a tax-efficient manner, it is also a way in which you can motivate, and at times protect, your loved ones.

Reference: Wealth Advisor (Dec. 22, 2020) “Handle with care: Tips on planning for the fragile beneficiary”

 

What are Options for Powers of Attorney?

Power of attorney (POA) documents are an important component of an estate plan. There are four types. You should review each carefully to see which one will work best for you in your situation. What is required for a power of attorney, depends upon what power you want to authorize, says Carmel’s Hamlet Hub in a recent article titled “4 Types of Power of Attorney.”

Limited Power of Attorney. If you need someone to act on your behalf for a limited purpose, use a limited power of attorney. This will specify the date/time after which the power no longer is in effect.

General Power of Attorney. This is an all-encompassing power of attorney, in which you assign every power and right you possess as an individual to a certain party. It’s typically used where the principal is incapacitated. It is also used with those who don’t have the time, skills, knowledge, or energy to handle all of their financial matters. The power you assign is in effect for your lifetime, or until you are incapacitated (unless it is also “durable”). However, you can elect to rescind it before then.

Durable Power of Attorney. The key distinction with a durable power of attorney is that it stays in effect, even after you’ve become incapacitated. Therefore, you want to sign a durable power of attorney if: (i) you want to give the designated agent authority ONLY if you’re unable to act for yourself; or (ii) you want to give the agent immediate authority that continues after you’re unable to act for yourself. You need to contact an experienced estate planning attorney to discuss these different types of powers.

Note that a limited or general power of attorney ends when you become incapacitated. At that point, a court will appoint a guardian or conservator to handle your matters. You can rescind a durable power of attorney at any time prior to becoming incapacitated.

Springing Power of Attorney. This document serves the same purpose as a durable power of attorney, but it’s effective only upon your becoming incapacitated. When drafting this, your experienced estate planning attorney will help you make clear your definition of “incapacitated.”

Remember that you’ll need to state in your power of attorney document which powers and duties you are assigning to the attorney-in-fact.

Regardless of the type of power of attorney you implement, the attorney-in-fact has the power to do only what your POA indicates. Contact an experienced estate planning attorney to discuss the different types of powers and which would apply to your circumstances.

Reference: Carmel’s Hamlet Hub (Dec. 16, 2020) “4 Types of Power of Attorney”

 

What Happens If I Don’t Fund My Trust?

Trust funding is a crucial step in estate planning that many people forget to do. However, if it’s done properly, funding will avoid probate and provide for you in the event of your incapacity and save on estate taxes.

Forbes’s recent article entitled “Don’t Overlook Your Trust Funding” looks at some of the benefits of trusts.

Avoiding probate and problems with your estate. If you’ve created a revocable trust, you have control over the trust and can modify it during your lifetime. You are also able to fund it, while you are alive. You can fund the trust now or on your death. If you don’t transfer assets to the trust during your lifetime, then your last will must be probated, and an executor of your estate should be appointed. The executor will then have the authority to transfer the assets to your trust. This may take time and will involve court. You can avoid this by transferring assets to your trust now, saving your family time and aggravation after your death.

Protecting you and your family in the event that you become incapacitated. Funding the trust now will let the successor trustee manage the assets for you and your family, if your become incapacitated. If a successor trustee doesn’t have access to the assets to manage on your behalf, a conservator may need to be appointed by the court to oversee your assets which can be expensive and time consuming.

Taking advantage of estate tax savings. If you’re married, you may have created a trust that contains terms for estate tax savings. This will often delay estate taxes until the death of the second spouse, by providing income to the surviving spouse and access to principal during his or her lifetime while the ultimate beneficiaries are your children. Depending where you live, the trust can also reduce state estate taxes. You must fund your trust to make certain that these estate tax provisions work properly.

Remember that any asset transfer will need to be consistent with your estate plan. Your beneficiary designations on life insurance policies should be examined to determine if the beneficiary can be updated to the trust. Speak with an experienced estate planning attorney to assist you.

You may also want to move tangible items to the trust, as well as any closely held business interests, such as stock in a family business or an interest in a limited liability company (LLC). Ask an experienced estate planning attorney about the assets to transfer to your trust. Fund your trust now to maximize your updated estate planning documents.

Reference: Forbes (July 13, 2020) “Don’t Overlook Your Trust Funding”