Remove a Burden by Communicating with Loved Ones

Communication with loved ones often provides a challenge, but will definitely have benefits, including removing a burden and best ensuring that your wishes are carried out.

Let your loved ones know:

• If you will be naming them in a role of trusted helper (i.e. executor, trustee, power of attorney agent, or guardian.)  In other words, ask first.
• Where you keep your estate planning documents and other important papers.
• If you’ve included anything unexpected in your estate plan.
• Your wishes for burial/cremation and final arrangements.
• Whether you wish to be an organ donor.
• If you have a living will and want to avoid medical heroics, intubation, and life support machines if you are in an end-stage medical condition.
• That you love and appreciate them.

Remove a Burden with Up-to-Date Estate Planning Documents

Estate planning documents are a set of instructions for your loved ones to follow should you become incapacitated and when you die.  Having your wishes in writing saves your loved ones money, time, and hassle.  It also better ensures that your wishes will actually be carried out.

If your estate plan is more than three to five years old or if your life has significantly changed since you updated, consult with a qualified estate planning attorney for good legal advice as well as practical advice on how to remove a burden from loved ones’ shoulders.

Remove a Burden by Providing an Updated List of Contacts

Keep a file with contact information for your estate planning attorney, financial advisors, insurance professional, clergy person, and friends/family to be contacted if you’re ill or have died.

Also include contact information for people who have worked on your house or provided other services such as lawn care, cleaning, handyman, plumber, electrician, realtor, mechanic, and the like.

Remove a Burden by Providing an Updated List of Usernames and Passwords

Your loved ones will need to deal with your accounts and online assets such as investment accounts, bank accounts, eBay, Shutterfly, emails, LinkedIn, Facebook, Twitter, PayPal, etc.  It’s imperative that they have access to your accounts so they can find your assets, respond to emails, have access to family photos, and take down social media accounts, if that’s what you prefer.

For More Information

For more information on removing a burden from your loved ones’ shoulders, please kindly read part three of this article, Planning with an Estate Plan (and More) Removes a Great Burden (Part 3 of 3).  We’ll discuss providing up-to-date estate planning  documents and wishes.

Remove a Burden by Organizing Your Stuff

If you’re a pack rat, go through your things on a regular basis and purge.  If an item is in good shape, but you’re not going to use it, hold a yard sale or give it to charity.

Many charities will pick up furniture, household goods, tools, toys, books, and clothes at your home.  Donations are tax deductible.

Remove a Burden by Organizing Your Paper Work

If you’re like many folks, you don’t know what papers to keep and what to shred or recycle.

Keep most recent financial statements, important certificates (death, marriage, divorce, and adoption), military and immigration papers, current estate planning documents, titles, deeds, and original insurance policies and contracts.  If you can get the information online or you have more recent information, you, likely, don’t need to keep redundant papers.

Shred any papers that have a current account number or social security number.  Recycle everything else.

For More Information

For more information on removing a burden from your loved ones’ shoulders, please kindly read part two of this article, Planning with an Estate Plan (and More) Removes a Great Burden (Part 2 of 3).  We’ll discuss providing a list of contacts and usernames.

Bank Accounts. Married couples often own a bank account as a joint tenancy. With bank accounts, each account holder has the right to use the account as he or she chooses, meaning both owners can deposit or withdraw money as they choose.

Real Estate. Many people, usually married couples, own their homes as joint tenants. In some states, however, married couples can only own real estate as tenants by the entirety, a form of ownership very similar to joint tenancy but with asset protection qualities.

Safe Deposit Boxes. Like bank accounts, you can own a safe deposit box as a joint tenancy. Like a bank account, both joint tenants have an equal right to use the safe deposit box. However, the property placed within that box is not necessarily held in joint tenancy, meaning that, for example, a spouse cannot use the individually owned property in the box that the other spouse—the owner—placed within it.

We’ve had clients who are seemingly healthy and all of a sudden are injured or seriously ill.  If you are so ill that you cannot give informed consent, you can’t sign a living will.  Like all estate planning documents, you need to have them in place before you actually need to use them.

Let us tell you about a woman named, Grace.  Grace and her husband had moved to a retirement community and they updated their estate planning documents after the move.  (Any time you move to a new state, it’s wise to have your documents professionally reviewed for updates.)

Grace included a living will in her estate plan.  She didn’t want to be kept alive with medical heroics (including life support machines) if she was in an irreversible coma or persistent vegetative state.

She was diagnosed with cancer shortly after her move and gradually went down hill.  One day, she fell, calling out her husband’s name.  Grace never regained consciousness.

The doctors examined her and determined that she was brain dead; they asked if she had a living will.  She did.  Her husband brought it to the hospital.  He and their children visited and then life support was removed.

Grace died peacefully just 15 minutes later.  While her family was sad to lose her, they felt at peace with the execution of the living will.

Tip 1: Come up with a list of potential attorneys. If you don’t know where to start, you can contact your state bar association and ask for referrals to local estate planning attorneys. Ask for several names and create a list with each and their contact information. You can also talk to friends and family members to see if they have a lawyer they recommend.

Tip 2: Call them. Each attorney, or law firm, should be able to provide you with a free initial  consultation, either in person or over the phone. Scheduling a time to meet with the lawyer in person is usually best, as there are some things you cannot learn simply by talking over the phone.

Tip 3: Interview them. Once you set up your meeting, be ready to ask questions. How much experience does the attorney have? Is she a certified estate planning specialist? Does she have malpractice insurance? Does she charge by the hour or on a flat fee basis? Write down all your questions before you meet with the attorney and write down the answers so you can review them later. Once you’ve talked to each attorney, you can then make a more educated decision.

If You’re 18 or Older, You Need an Estate Plan

Children are covered by their parents’ estate planning documents.  So, if you’re a parent, you need an estate plan to protect yourself and your children.

If you are age 18 or older, you’re no longer covered by your parents’ plans and you need your own.  If you don’t have one, the courts and state law will create a plan for you and it isn’t, likely, what you’d want.

This means that the court will decide who raises your children and who settles your estate; state law will determine who gets what of your assets.

Are Your Estate Planning Documents Stale?

Even if you have estate planning documents in place, they may be stale if they are too old and/or don’t carry out your current intent.

Documents are stale if they’re:

• Typewritten
• On Legal-Sized Paper
• From Another State
• More Than 3 to 5 Years Old
• Fail to Name All of Your Children

Or if they,

• Name a Trusted Helper Who is Incapacitated, has Died, or Just is No Longer Appropriate
• Don’t Carry Out Your Current Wishes and Goals

If a document is stale, your wishes may not be carried out and legal institutions may not honor it for fear that it is no longer legally valid.

It is in your best interests to call a qualified estate planning attorney in the New Year and get a strong, comprehensive estate plan in place.

During Your Lifetime

When you apply for Medicaid to pay for the nursing home, your house will be protected during your lifetime so long as you indicate on the Medicaid form that you intend to return to your home.  Even if it looks clear that you will never return home, mark that you do intend to return home; this is a formality that must be honored to protect your house.

After Your Death

When you receive Medicaid to pay for long term care, the state will try to get repaid for monies spent on your care, through a process called “estate recovery.”  To avoid estate recovery and the taking of your house, you must plan ahead well in advance.

Two Planning Methods

The two most common planning methods are the use of a life estate and an irrevocable trust.

The life estate strategy consists of drafting and filing a new deed to your house; the deed allows you a life estate interest in the house and your beneficiaries own the remainder interest.  You own the house when you’re alive; your beneficiaries, automatically, own the house at your death.  Be aware that this technique is not available in all states so you must get legal advice before you proceed.

The trust strategy is similar; the deed transfers the house into a trust.

In both strategies, the house is outside of your estate; and, is, therefore, not subject to estate recovery.

Because of nursing home transfer look-back periods, the sooner you plan the better; but, never hesitate to get good legal advice from an elder law attorney, even if you think it’s too late.  You can protect your home from the nursing home.

You must disclose all assets for less than fair market value on your Medicaid application.  The bottom line is that you can’t give all of your assets away today, so that you qualify for Medicaid tomorrow.

In 2012, the look-back period is 60 months; that’s 5 years.  This is the look-back period only, not the disqualification period.

This means that if you gave away any assets for less than the real value, you will be disqualified for some period of time.  It does not mean that you are disqualified for the entire 5 years.  The disqualification period is determined by the size of the gift.

Do not try to transfer assets for the sake of qualifying for Medicaid on your own; the process is complex and if you make a mistake, you may be unnecessarily disqualified from receiving Medicaid to pay for your long term care.  A mistake may cost you and your family thousands and thousands of dollars.  Always work in consultation with an elder law attorney.

An exempt resource is something that your grandmother owns that doesn’t have to be spent down before she qualifies for Medicaid.  Exempt resources include jewelry, a small amount of cash, her home, a car, a pre-paid funeral or burial trust, small amount of life insurance, clothing, furniture, and other personal possessions.

If your grandmother is married and her spouse lives in their home, higher levels of cash and income can be protected, than if she is single.

One Medicaid planning strategy is to convert non-exempt resources into exempt resources.  For example, cash may be spent down by replacing the roof on your grandmother’s home or paying off the mortgage.

A word of caution, valuable personal items often go missing in nursing homes; it would be wise to put your grandmother’s engagement ring in a safe place with loved ones, instead of her wearing it in the nursing home.

If you want to protect your grandmother’s belongings and assets, such as an engagement ring from the nursing home, consult with a qualified elder law attorney.