August 2

How Do I Help Mom?

How Do I Help Mom?
Your mom has everything in order. Years ago she entered into an estate plan which included a trust, durable power of attorney, last will and testament and health care documents. She named you to manage her affairs in the event she became unable to do so. That day has arrived. She needs your help. How do you help her now?
Health: The HIPAA form allows medical personnel to release information to you. The Advance Health Care Directive (AHCD) authorizes you to make decisions regarding your mother’s health care. After your mother passes, the funeral home may need a copy of the AHCD if you choose cremation.
Finances: The manner in which your mother currently holds title to an asset will determine the document you will need to access and manage assets for her care.
• Assets held in your mother’s sole name. Title to checking accounts and vehicles is often retained in an individual’s name rather than transferred to a trust. For accounts that are not held in a trust, the durable power of attorney form gives you authority to act in regard to that asset. In addition, you may need to provide a copy of the durable power of attorney when you contact insurance carriers, the Social Security Administration or pension providers to enable them to speak to you on your mother’s behalf.

• Assets held in your mother’s trust. How you will take over as successor Trustee of your mother’s trust depends upon the terms of the Trust. If your mother still retains capacity, she may execute a resignation as Trustee and then you would execute an acceptance by Trustee. If your mother no longer has capacity, it may be necessary to obtain a letter from one or two doctors attesting to that fact. You will then execute an updated Trustee’s certification of trust which states that you are now the acting Trustee of the Trust. The Trustee’s certification of trust may then be provided to any institution where your mother holds title to accounts in the Trust, i.e. brokerage accounts, bank accounts.
This may be a very stressful time for you and your mother. It is strongly recommended that you seek the advice of a qualified estate planning attorney to ease the process.

May 31

Durable Power of Attorney Saves the Day

Durable Power of Attorney Saves the Day!
You and your car were just creamed by a garbage truck. Fortunately, you weren’t killed but your head is in a halo and your limbs are in casts. Who will be able to retrieve your paycheck from your employer and deal with health insurance and disability insurance companies? You entered into a contract to purchase a new home shortly before you met the garbage truck. However, the purchase of your new home is contingent on the sale of your current home. Will both sales fall through because you’re unable to sign documents? If you didn’t have a durable power of attorney form in place prior to the accident, you’ll be in a world of even bigger hurt.
This is a problem whether you’re single or married. Many married couples assume that their spouse can act on their behalf. This is not always the case unless you have taken proactive steps prior to your incapacity. A durable power of attorney form appoints an Agent you have chosen to act on your behalf. The “durable” in the title of this document indicates it may be used even if you are incapacitated. The Agent named in a well-drafted durable power of attorney form is authorized to act on your behalf with many different parties and institutions including but not limited to employers, insurance companies, lenders and escrow companies, banks and the like. An Agent in this case has very broad powers so it is important to choose your Agent wisely.
A durable power of attorney form is just one (very important!) document in an estate plan. For information the durable power of attorney, or other estate planning documents, please contact a qualified estate planning attorney.

March 19

Stories from the Cemetery

(True!) Stories from the Cemetery
Alice died in 1971. Her surviving spouse, Joe, was an Army veteran which allowed burial of Alice in a National Cemetery. Lucky for Joe, he fell in love and married again in 1973. His second wife, Mary, had been a widow for many years. Mary and Joe each had adult children from their first marriages.
Shortly after their marriage, Mary mentioned to Joe’s daughter that she and Joe had decided they would each be buried with their first spouse. Mary thought this would make it easier for all of the kids. Apparently, Mary never mentioned this to her own children.
Joe died in 1986. Mary buried Joe with Alice in the National Cemetery. The face of the headstone contained both Alice and Joe’s names and dates of their lives. Mary survived Joe for nearly thirteen years but suffered from dementia during the last years of her life. This made it impossible to have a meaningful conversation with her to determine her preferred final resting place.
At Mary’s funeral, Joe’s children were taken by surprise to discover that, without their knowledge, Mary was going to be buried with Alice and Joe. Rather than a duplex, the grave was now a triplex! The National Cemetery was not required to notify the children of Alice and Joe that another person had joined their parents.
A new headstone was installed. The front has Joe’s name and dates of birth and death. The back of the headstone has a heading “Wives” and lists the names and respective dates for Alice and Mary. It is unlikely the two ladies ever met in life but their remains now repose together for eternity.
The moral of this story: Talk to your family now and let them know your wishes regarding disposition of your remains.

February 19

I Have a Will, Why Do I Need a Trust?

I Have a Will, Why Do I Need a Trust?
You have a last will and testament. Your will directs that, at your passing, your spouse will inherit everything you own. It further directs that if your spouse dies before you, your children will inherit everything. Why do you need a Trust?
The most apparent reasons are time and money. The first reason why you need a trust is that a will does not avoid court; a will gives instructions to the court. A California probate estate administration is a lengthy process. It is very unusual to complete the process in less than a year. Your beneficiaries must wait for a court order before distributions may be made to them. In addition, attorney and executor fees are set by statute in California. An estate valued at $1,000,000, would incur attorney and executor fees totaling at least $46,000. If you are house-rich and cash-poor, how will your beneficiaries meet these obligations? If you have a trust, the attorney’s fees and trustee’s fees may be substantially lower and distributions may be made to your beneficiaries more quickly and without court supervision.
The second reason you want a trust is that the last will and testament only comes into play after your death. If you become incapacitated, a trust allows the Trustee that you have chosen to quickly and easily step in and manage your trust assets for your benefit. This may help you avoid a costly and very public conservatorship proceeding. A conservatorship is put into place when a person can no longer manage their own affairs and no mechanism is currently in place, i.e. a trust and/or durable power of attorney, to allow someone else to step in and help you. Conservatorships are heavily supervised by the court and thus the attorney’s fees may be quite high. It is expensive to establish the conservatorship and annual reporting requirements incur additional fees every year until your death.
Both a will and a trust will direct distribution of your assets after your death. However, a well-drafted trust will also enable someone to manage your assets during your lifetime if you become incapacitated. Finally, a trust may save substantial time and money in the administration of your estate after you are gone.
Call an estate planning attorney today and make your life and death easier.

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