The final post in our series focuses on the part of your Estate Plan having to do with healthcare. This is the section that is likely to change most often, and will require the most frequent review and update.

The backbone of the healthcare portion of your Estate Plan is of course your Advanced Health Care Directive (or Health Care Power of Attorney). In this document you record your wishes and instructions for your medical treatment—including any existing conditions or illnesses—as well as the people you nominate as your healthcare agents, those who will make healthcare decisions for you if you are unable. Your Advanced Health Care Directive should be updated whenever you have a major change in your health status.

Also included in the healthcare portion of your Estate Plan is your HIPAA Authorization, which gives the hospital and medical staff permission to share your health status with the people you’ve nominated as your healthcare agents. Your HIPAA should be updated every time you nominate new agents, or every 2-3 years to keep it “fresh” in the eyes of hospital personnel.

A lesser known part of the healthcare portion of your Estate Plan is your disability panel, included in your Trust. This is a list of the people authorized to determine your incapacity for purposes of handling trust accounts. A court of law is automatically authorized to make this decision, but you can also name a panel of doctors, professionals, loved ones, or a combination of any of those to determine your ability to make financial decisions relating to the Trust. Your disability panel does not need to be updated regularly, but should be reviewed at least as often as you review your list of healthcare agents.

This second in our three part series focuses on the financial portions of your Estate Plan, listing the documents that give your trustees and agents the financial powers they need to manage your finances in your absence. Generally, once you decide who will manage your money when you can’t, and who will get what when you die, you next want to know how all that is going to be accomplished.

First and foremost, you have named Trustees; these are the people who will—with perfect impartiality—be administering your trust property exactly as you have designed. Trustees will also sometimes be referred to as Executors, as in executor of your will, although the trustee of your trust and the executor of your will can actually be different people.

And how is it that your trustees are able to deal with your financial institutions? How does the bank know to give that person access to your accounts? You give your Trustees this power in your Durable Power of Attorney. The Power of Attorney is a document which gives the people named therein as agents all of the permissions and powers they need to interact with financial institutions on your behalf. This is usually a long laundry list of powers, which go into effect only when you have been declared incapacitated.

In addition to the Durable Power of Attorney, you will likely also sign a Nomination of Conservator. This is a short document that does not expressly give your agent any powers, but it does tell a judge in no uncertain terms who you would like to make decisions for you in the event that you are unable to make your own financial decisions. Rather than expressly giving powers, the Nomination of Conservator is an easy document that significantly shortens a potentially long and grueling court procedure should you ever need a conservator of your estate.

Come back Friday to read the final post in our series, in which we address the healthcare portion of your Estate Plan; the Advanced Health Care Directive, HIPAA Authorization, and your disability panel.

When the time comes each year to review your estate plan, the thought of looking through all that paperwork and legal language can be daunting. But the job can be made easier if it is broken down into parts to be reviewed one at a time. Every complete estate plan can be divided into at least three separate but related sections. This week we will publish a series of posts highlighting the documents that make up each of these sections.

The part of your estate plan with which you are probably most concerned is the distribution of assets. After all, for most people, ensuring that their assets are distributed how they want and to whom they want is what drives them to see an attorney in the first place. Your Trust is the main document that describes and gives instruction for the distribution of assets; specifically, in articles with titles such as “Distribution to my Descendents”, “Distribution of Remaining Trust Property”, “Remote Contingent Distribution”, or the like. However, three other documents in your estate plan deserve your attention on the subject of distribution as well.

Your Will is an important document which deals with distribution of assets. If you have a Trust it is likely that all of your assets are owned by that Trust, and your Will is probably a short document stating simply that any assets not included in your Trust should be put into your Trust and distributed accordingly. However, if you created your Will before you decided to create your Trust, you could have conflicting documents and should ask your attorney for a new Will which mentions the existence of your Trust.

Two other smaller, but important documents pertaining to distribution are the Assignment of Personal Property and the Personal Property Memorandum. The Assignment of Personal Property is a document which transfers all of your smaller, tangible property (such as cars, antiques, artwork, furniture, etc.) into the name of your trust, thus avoiding probate. This document is one that should be renewed (re-signed) every 2-5 years to ensure that all assets—even your most recent purchases—are included. The Personal Property Memorandum is the document in which you give specific property to particular people, for example your diamond ring to your granddaughter, or your baseball card collection to your favorite nephew. This is a very simple document, and can even be handwritten, but it should be kept with your trust, and even be referred to in your trust, if at all possible.

Come back Wednesday to read our next post in the series about financial agents and powers of attorney.

Last week President Bush signed the economic bailout bill, but what you probably don’t know is that attached to that bill was a requirement that health insurance groups provide equal coverage of physical and mental illnesses. What this means is that any insurance provider whose coverage includes treatment for mental illnesses such as depression, anxiety, or even alcoholism must offer equal coverage for those illnesses as for physical ailments such as pneumonia or broken bones.

Of course this makes any Estate Planning Attorney’s mind turn to the health provisions we provide our clients in their estate plans, specifically the Advanced Health Care Directive. Most people, when they consider what to include in their Advanced Health Care Directive, think for the most part about what instructions to give their agents about pulling (or not pulling) the plug when a doctor declares you brain dead. But perhaps it’s time to make the Health Care Directive more comprehensive. If insurance providers will soon be addressing mental illnesses, shouldn’t we?

“The rise of the internet, along with thousands of health-oriented websites, medical blogs, and even doctor-based television and radio programs, means that today’s patients have more opportunities than ever to take charge of their medical care.”

So begins Tara Parker-Pope’s article in the New York Times entitled You’re Sick. Now What? Knowledge Is Power. If what Parker-Pope is saying is true, then why aren’t more patients taking charge of the legal aspect of their illness? No, we don’t mean taking legal action against doctors, we mean taking the steps necessary to legally protect yourself while in the hospital or on the operating table.

If knowledge is power, that doesn’t just apply to knowledge of medicines and treatments, it means knowing your legal rights and protective measures as well, and using all the knowledge at your disposal. How do you insure you have the people you want making decisions for you if you are unable to make them yourself? How can you guarantee you won’t be kept in the hospital if you would rather be cared for at home? And what can you do to cut through the red tape and open channels of communication between your family and your medical personnel during a time of fear and stress?

The answer lies with two simple documents that your estate planning attorney can provide: An Advanced Health Care Directive (or Health Care Power of Attorney), and a HIPAA Authorization. These two documents together name the people you want as your agents to make decisions for you if you are incapacitated, and the people who are allowed to receive information about your healthcare condition. Without these two documents both your family and your medical caregivers may be left in the dark. These documents not only name your agents, but give them guidance and outline your wishes and preferences for care.

Parker-Pope says in her article that when it comes to internet information, “the goal is to find an M.D., not become one.” The same is true of lawyers and legal advice. You may find these two legal healthcare documents online, but there is no way to be sure that they are legally accurate and binding without the advice of a qualified attorney. Don’t take chances with your healthcare, call our office and let us provide the legal knowledge and power you need.

With all of the uncertainty on Wall Street recently, many of our clients whose bank accounts are held in their Revocable Living Trusts are concerned about whether their assets are protected, and to what extent.

According to the FDIC, accounts owned by a Revocable Living Trust are indeed insured. To what extent they are insured depends on who your beneficiaries are and when they become entitled to their interest.

The owner of a living trust account would be insured up to $100,000 per beneficiary if all of the following requirements are met:

The beneficiary must be the owner’s spouse, child, grandchild, parent or sibling. Stepparents and stepchildren, adopted children and similar relationships also qualify. In-laws, cousins, nieces and nephews, friends, and charitable organizations do not qualify.

The beneficiary must become entitled to his or her interest in the trust when the owner dies — coverage would be based on the beneficiaries who meet this requirement at the time the bank fails. Example: A living trust names an owner’s three children as beneficiaries but states that each beneficiary’s share will pass to the beneficiary’s children if the beneficiary dies before the owner. Assuming all three children are alive at the time the bank fails, only the children — not the grandchildren — would be beneficiaries for insurance purposes. (That’s because the grandchildren are not entitled to any trust assets while their parent is alive.) Coverage up to $300,000 ($100,000 per beneficiary) would be available on the trust’s deposit accounts.

The account title at the bank must indicate that the account is held by a living trust. This rule can be met by using the terms “living trust” or “family trust” in the account title.

If you have any concerns about how your account is titled and whether you are covered, please call our office for more information.

When you are an Estate Planning Attorney you meet a lot of parents with the same concern: they want to leave a legacy for their children, but they worry about the repercussions if the children are given too much financial obligation before they are mature enough to handle it.  What these parents want is to be there as their children receive their inheritance, to give them the responsibility slowly, as they become ready.  To gradually relinquish control as each child reaches various milestones which prove they are fiscally prepared.

Well, we can’t assure these parents that they will be around indefinitely to watch over their child’s financial education, but we can offer them a solution that bears a resemblance to a cautious parent.  The solution has two parts, either or both of which the client may choose to utilize.

The first is to specify an age at which a child may be co-trustee of his or her own trust.  The child can then partner with a co-trustee of the parents’ choosing; this could be a close friend of the family, a trusted financial advisor, or even a corporate trustee such as a bank.  This gives the child the opportunity to get a taste of responsibility and begin making decisions, but with a safety net beneath them.  When the child reaches a certain age (or alternatively, after attaining a goal such as graduation from college, or gainful employment for a specified amount of time) he or she may then become sole trustee of his or her own trust.

The second part of the solution is to give the child access to the trust principle itself in gradual increments.  For example, the child may receive 1/3 upon graduation from college, another 1/3 ten years later, and the remaining 1/3 ten years after that.  Of course the ages and amounts are completely up to each client, but the slow distribution of assets allows the beneficiary to have a learning curve, something which makes the parents (and  the child) much more comfortable.

At our office we understand that there is no substitute for parental involvement, but we can give our clients options that can lay a strong foundation for fiscal responsibility.  If you are a parent with similar concerns, contact our office for more information.

If you are the child of parents who are now over the age of 65 you’ve probably given at least some passing thought to the day when one of your parents may need Long Term Care.  Perhaps that still seems a long way off, or perhaps you see some of the warning signs already.  Either way, there are steps you can take now to make the transition to giving and receiving care later easier on both you and your parents.

First and foremost, talk about it with your parents.  It may seem like a difficult subject to broach, but it is necessary if you want to be able to work cooperatively in the future.  Find out if your parents have already thought about the topic, if they’ve made provisions for it, or if they have any specific wishes.

Second, encourage your parents to create an Estate Plan if they don’t have one already.  An Estate Plan will be important in expressing your parents’ wishes on necessary issues such as preferred agents in case of incapacity, financial power of attorney, and health care decisions.  These essential documents will prevent many expensive delays and frustrating red tape in the future.

Third, think about what steps you and your parents may need to take to prepare for the financial burden of Long Term Care, because there will be a financial burden.  Mellody Hobson of ABC News has some suggestions on how to plan, and what your financial options are.  She describes the more well-known options of Medicaid and Long Term Care Insurance, as well as some lesser known options such as a Dependent Care Account.

The most important thing to remember as you think and talk about these issues is that you don’t have to—and you shouldn’t—go through this alone.  Elder Law and Long Term Care are intricate and convoluted subjects, and you can serve your parents and your family best by getting the help of caring professionals whose business it is to guide you smoothly through the ins and outs of Elder Care.  This includes professionals such as doctors, geriatric care managers, financial advisors, and yes—estate planning attorneys.  Let us help you look into the future with confidence and clear eyes.

We have said a number of times in our blog that Estate Planning will bring you peace of mind, and apparently we aren’t the only ones who think so! In fact, Andrew Flusche believes Estate Planning brings enough peace of mind to warrant an entire blog post about it for Leo Babauta’s blog Zen Habits.

In actuality, Flusche’s post isn’t about Estate Planning in particular, but the 5 Legal Tips for Peace of Mind mentioned in the post can all be accomplished with a trip to your Estate Planning attorney.

What is exceptional about this blog post from Zen Habits is that it takes Estate Planning out of the sometimes intimidating realm of “Lawyer Stuff” and puts it right where it belongs; in the category of things that can improve your life in real and substantial ways.

Estate Planning might not be as obvious a Zen habit as exercise, meditation, or healthy eating—but by taking care of the necessary business of providing for your family in an emergency, and protecting your assets (and yourself), you leave yourself with a lower stress level, less preoccupation, and peace of mind.  And all of those things lead to a healthier you.

If you’ve been reading our blog, then you know by now why it is so important to create an Estate Plan.  However, you might not yet realize how important it is to review your Estate Plan regularly, and keep it updated.

The primary reason to review your Estate Plan regularly is the simple fact that your life changes in numerous small ways over time.  For example:

• Friendships grow and change, which may have an impact on your trustee or agent nominations.
• Children grow and mature (or not), which may cause you to re-think distribution amounts and methods.
• People move and change addresses—perhaps even you!  You’ll want to update the contact information contained in your Estate Plan.
• Your health status may change over the years, and your Health Care Directive should be updated to include any new illnesses, medical conditions, or doctors.

These reasons alone should be enough to motivate you to review your Estate Plan, but there is one more reason to update your plan that you may not be aware of, and that is that certain Estate Planning documents lose potency over time.

The Financial Power of Attorney is one of those documents that lose potency.  Many banks will not accept a Power of Attorney executed more than five years prior.  If this happens to you it means that your agent must get a conservatorship through the courts before they can access your bank accounts.  An Assignment of Personal Property is another document that loses potency over time, which could result in any assets acquired after the signing of the document having to go through probate.

There are enough changes that take place over the course of five years to justify an update, but if that isn’t enough, let the law persuade you.  Don’t let your Estate Plan get “stale”, be sure to have it reviewed and updated regularly.