Estate Planning Updates | Marketing and practice development tips for estate planning and elder law attorneys.

January 2, 2019 admin

Long-Term Care Options

When you were serving in the military, you had to pass an annual test designed to test your muscular strength, endurance and cardiovascular respiratory fitness. Your physical fitness was most likely at its all-time peak back then. However, someday the growing number of candles on your birthday cake may impact your health and wellness. Will you be ready?

In the future, your ability to perform one or more of the most basic “activities of daily living” may challenge you. These ADLs include bathing, dressing, eating, toileting or getting in and out of bed. Before that time, you may lose the ability to perform one or more “instrumental activities of daily living” or IADLs, to include household chores, meal preparation or managing your finances. Consequently, you may require some form of outside assistance, whether in your own home, an assisted living facility or a nursing home.

This care is also expensive. In 2018, the national median annual cost for home health care was $48,048 for homemaker services and $50,336 for a homemaker health aide. Need assisted living? Expect to spend $48,000 annually for a private one-bedroom apartment. Skilled nursing care runs even more at $100,375 for a private room. Do you have the personal and retirement savings to pay these bills and, if yes, for how long?

Do Nothing Default

We all know it is “other folks” who will need some form of long-term care assistance. Right? The odds are not actually in your favor, if denial is your default long-term care strategy. Why? Roughly 70 percent of Americans over age 65 will require some form of long-term care. Unless you have a plan now to pay the very real costs later, the only thing your children may inherit is you.

Medicare & Medicaid

Do you think Medicare will pay for your long-term care needs? So, do 70 percent of your fellow citizens. If this is your plan, you (and they) will very be disappointed. Medicare only provides limited coverage for certain “skilled care” in an approved nursing facility, not for “custodial care” assistance with the activities of daily living.

Medicaid does cover custodial care without the arbitrary time limits, burdensome co-pays and red tape associated with Medicare. On the other hand, Medicaid eligibility is subject to strict income and asset limits. Although many people try to get around these limits, by transferring assets to family members, any such transfers made within 60 months of applying for Medicaid will trigger a penalty period of ineligibility.

Veterans Benefits

Certain wartime service veterans (and their spouses) may qualify for a needs-based pension. In addition, these qualifying veterans, who also are in need of long-term services and supports (LTSS), may be further eligible for “Aid & Attendance” and other needs-based benefits administered by the Department of Veterans Affairs. Because eligibility is “needs-based,” the VA will penalize any gifts and other transfers of resources for less than fair market value that occurred in the three years prior to applying for needs-based benefits.

Insured Alternatives

Just like you have insurance to cover the risks to your automobile, home, and life, long-term care insurance (LTCi) is a responsible way to cover the likely and catastrophic risk of needing long-term care. These policies pay for in-home care, assisted living care and skilled nursing care. There are “traditional” LTCi policies that pay a daily amount for a designated length of time and “hybrid” LTCi policies that are really life insurance with a long-term care rider.

Given the range of possible options, what is your long-term care strategy?

November 30, 2018 admin

Ready & ABLE

A major challenge for individuals with disabilities and their families, is finding the funds to pay for expensive medical treatment, care, and medicine that may be needed on an ongoing basis. Not surprising, many of them depend on government assistance for income, food, healthcare, and housing assistance. However, maintaining eligibility for government assistance programs, such as SSI, SNAP, and Medicaid can be difficult.

To stay eligible for these benefits, a disabled person must remain poor. He or she must satisfy a means or resource test. If a person reports more than allowed in cash savings, retirement funds, and other assets, then he or she may not be able to receive needed benefits. Enter ABLE accounts. These are tax-advantaged savings accounts that will not impact eligibility for government assistance programs.

How Does an ABLE Account Work?

An ABLE account allows individuals with disabilities and their families to set aside funds to defray necessary expenses, without losing eligibility for benefits. The account owner is also the beneficiary of the ABLE account, and any income earned by the accounts is not taxed. Anyone can make contributions, including the account beneficiary, parents, grandparents, other family members and friends.

How May an ABLE Account Be Used?

The ABLE account funds cannot be used for just any reason. Expenditures must be for “qualified” disability expenses. These are expenses resulting from living with disabilities, like expenses related to maintaining the health, independence, and quality of life of individuals with disabilities. Qualified expenses may include education, housing, transportation, job training, assistive technology, and healthcare expenses. An expense is “qualified” if: 1) the expense was incurred when the disabled person was considered an “eligible individual”; 2) the expense relates to the disabled person’s blindness or disability; and 3) the expense helps the disabled person maintain or improve his or her health, independence or quality of life.

Who Is Eligible?

ABLE accounts are available to eligible U.S. citizens and legal residents. Most states offer ABLE accounts and not all of them have a state residency requirement. Both physical and mental disabilities may qualify a person to open an ABLE account.

An eligible individual is someone who first became disabled before age 26 and: is entitled to benefits like Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI), based on blindness or disability under Title II or XVI of the Social Security Act; or self-certifies that he or she has a condition listed on the Social Security Administration’s list of compassionate allowances conditions and has a signed qualifying disability diagnosis from a qualified physician; or self-certifies that he or she has an eligible disability and has a written qualifying disability diagnosis signed by a qualified physician.

Furthermore, to open an account based on self-certification, a person needs to have a signed doctor’s diagnosis of blindness or of a physical or mental impairment that results in “marked and severe functional limitations” lasting for a continuous period of 12 months or longer or which can be expected to result in death.

Takeaway

As of January 2018, there are more than 30 ABLE programs across the country, most of which are enrolling people regardless of their state of residence. With an ABLE account, disabled adults are empowered to have control over necessary funds to live a fuller life.

November 2, 2018 admin

Business Buying Basics

Are you looking for a business to buy? A lot of planning will be required, before you open the doors (or go live with the website) of your brand-new business. This article provides some general pointers and caveats to consider, to help make your business purchase a success.

The Right Business

What is the right business for you? Your answer will depend on a host of factors, some of which will center on your particular needs and lifestyle. Conduct a thorough (and honest) self-evaluation and determine whether you: a) are physically, financially, and emotionally suited to the business (there is big difference in the day-to-day operation of an antique shop versus a fast food restaurant); and b) do you possess the necessary skills, experience, and commitment to make the business a success (do you know anything about running a nail salon?).

There are many ways to find a business for sale, including online, local trade papers and the assistance of a business broker. When conducting your search, remember that not every business for sale is a good investment. For example, a shop that looks great from the curb or has a flashy website may not be well-run or have the proper staffing to turn a profit. Before buy, you need to have a good sense of exactly what you are buying. How do you do this? Conduct due diligence and evaluate the risk. You should also have the business independently valued.

Due Diligence and Risk Assessment

Due diligence is the process of thoroughly reviewing the business to determine the likelihood of its future success. With an existing business, you will need to inspect the building or office space, the inventory and equipment, the company brand and products, as well as gain insight into the current customer base, vendors, competition and market. Without saying, you will need to carefully look at the books. Prior to seriously considering a business, take a deep dive into its financial history. This should include examining tax returns, balance sheets, cash flow statements, sales records and accounts receivable, accounts payable, debt disclosures and advertising costs. In addition, review any lease and franchise agreements, if applicable.

Independent Valuation

In addition to your own due diligence and risk assessment, an independent valuation by a “business valuation expert” will confirm whether the asking price is reasonable. There are several different valuation methods. Contact your accountant about obtaining these valuation services and make certain you understand the results. You should also ask her about the taxes involved with owning this business.

Making an Offer

Once you decide to purchase the business, you will make an offer. This is a legal matter. All the nitty-gritty details of the sale need to be confirmed in writing. This is a “measure twice and cut once” exercise that must be done right the first time. Mulligans are very expensive! For example, make sure the agreement contains any necessary conditions in the offer, so you may withdraw (without penalty), if the seller does not meet all of the agreed-upon conditions. Are you buying the business entity or the assets?

Takeaway

Even though there are numerous caveats to consider before buying a business, it is generally accepted that buying an existing business is a much safer and faster means to profitability than building a business from the ground up. An existing business will typically come with an established customer base, veteran employees, entrenched policies and processes and even easier options for financing. All that noted, look before you leap!

September 28, 2018 admin

Your Estate: Getting Organized

In many married couples, one of the spouses is the “organizer” and overall detail person. It seems that the old adage is true: opposites attract. If you are single again (whether following a divorce or death of a spouse) and especially if you were not the “organizer” when married, then you need to be now. Why? If you were incapacitated or dead, then confusion will reign among your loved ones, unless you have organized your “estate” paperwork for them in advance.

First Steps

Getting and staying organized can be as simple as creating separate file folders to hold important information regarding your important people, property, and plans. You should then store these files in a safe, fireproof location and let your loved ones know where to find them. A good start would be to organize the following matters without delay and then update them as necessary.

Minor Children

Do you have minor children for whom you are the sole or primary parent? If something happened to you, would anyone know how to take care of the health care needs of your minor children? At a minimum, have you documented their medical insurance information, the contact information regarding their pediatricians, and any allergies or pre-existing health conditions they may have? In addition to creating this file, provide copies of this information to all relevant family members and others with a need to know.

Key People Lists

You probably have many important people in your life. You may have professional advisors who help you with everything from your health care, to insurance needs, to tax preparation, to financial planning and investing. If something happened to you, would those responsible for your care and estate know who these advisors are and how to contact them?

In addition to professional advisors, would your loved ones know how to contact your nearest and dearest family members and friends, if something happened to you? Making this list with names, addresses, phone numbers, and email addresses would save your loved ones, considerable stress at the time of your death when final arrangements are being made.

Important Papers

Even though many of us would like to be “paperless,” it seems we are buried with important papers. Your papers may include documents related to your estate plan, business or employment, investments, real estate and mortgages, automobile titles, birth certificates, passports, marriage certificates, divorce papers, investment records, tax records, real estate and mortgages and military discharge papers. Obviously, being able to access these papers will make your life easier now, let alone for those who will need them later.

Assets & Liabilities

Have you made a list of your assets and liabilities? This list should include each of the financial institutions, their addresses, their websites, the types of accounts held, the account identifiers, how titles are held and any beneficiary designations.

Virtual Assets

If you have any online financial, email, or social media accounts with unique web addresses, user names, and passwords, then you need to create a list and give your designated representative the ability to identify and access these accounts. Otherwise, these accounts will be shut down, upon your death and access denied.

Last Wishes

Reduce to writing and share at least the basics concerning your funeral instructions. This includes whether you prefer cremation or burial.

August 31, 2018 admin

Elder Abuse Epidemic

Every year approximately five million senior Americans are abused, neglected or exploited. Even worse, for every reported case another five go unreported. The reporting is even more troubling, when it comes to financial abuse cases. Just one in 14 of them are reported.

Against this backdrop, approximately $2.6 billion is stolen every year through elder financial abuse and exploitation. These statistics are likely to only get worse with 72 million baby boomers rapidly reaching their elder years. Even with all we know about elder abuse statistics, the public remains underinformed, when it comes to ways to avoid and prevent it.

Avoiding “IRS Scams”

According to federal government statistics, the most common scam perpetrated against the elderly in recent years is IRS Impersonation. Con artists pretend to be with the IRS when they call. They have targeted more than 2.1 million senior Americans and swindled some 12,300 of them out of a staggering total of $64.9 million.

These criminals typically prey on the elderly by accusing them of owing back taxes and penalties. If the targeted senior does not make an immediate payment, then the con artist threatens home foreclosure, arrest and deportation. To help seniors avoid this IRA scam, remember that the IRS never:

Calls to demand immediate payment;
Calls about taxes owed, without first mailing a bill to the taxpayer;
Demands that a taxpayer pay taxes, without giving them the opportunity to question the amount owed;
Asks for credit or debit card information over the phone;
Threatens to have a taxpayer arrested; and
Requires a taxpayer to use a specific payment method for taxes (like a prepaid debit card).

Therefore, what action should you take while on the phone with a suspicious IRS caller? Get the caller’s information and offer to call them back, after consulting with a trusted relative or an attorney. That should end the conversation and the scam.

Preventing Elder Abuse

In addition to these helpful reminders from the IRS, here are some additional elder abuse prevention pointers.

Did you know that many of those who abuse or neglect the elderly are family caregivers? Well-meaning and dedicated family members often fall prey to the stress of the physically and emotionally demanding responsibilities of caregiving. If you are a caregiver, do not go it alone. Find trusted family members or friends to help or at least give you a needed break. Contact an Aging Life Care Professional to help you find and engage various available local services, like adult day care.

If your senior family member is in a nursing facility, stay involved by monitoring their day to day care. Drop by unannounced at various times on different days of the week, to include meal time and bedtime. Look for signs of elder abuse or neglect. The most common signs are changes in appearance or mood. Contact an elder law attorney without delay, if you suspect foul play of any kind.

Remind your elderly loved one to be cautious, when making any major financial or legal decisions. What if he or she may have made a “mistake”? You should be sensitive and reassuring. An elder law attorney may help right a wrong. However, time is almost always of the essence.

August 2, 2018 admin

The “Daughter Syndrome”

Perhaps you know women who are taking care of their parents, in-laws or other loved ones. Many of these women are facing numerous challenges as caregivers, while trying to work full-time. There are roughly 44 million unpaid eldercare providers in the United States, according to the U.S. Census Bureau. Most caregivers are women. This reality is known as the Daughter Syndrome.

Syndrome Symptoms

This “syndrome” may begin when a woman helps rear her younger siblings. When she then becomes a “mother” to children of her own, a woman rears them to adulthood. After her children are adults and the nest is empty, this “daughter” may care for her parents or in-laws in their later retirement years. This assistance may include providing support, while these senior loved ones are still living independently, transporting them to doctor appointments, running errands for them and helping them with the upkeep of their homes. The daughter may later need to help transition parents or in-laws to other living arrangements, such as an assisted care facility. Since women tend to outlive men, a woman will likely care for her husband until his death.

Financial Symptoms

One of the direct consequences of the daughter syndrome is financial. Did you know these caregiving women lose an average of $324,044 in compensation due to their “uncompensated” services, according to a study from MetLife and the National Alliance for Caregiving? The medical journal JAMA Neurology recently discussed a looming crisis for women and their employers—the increasing number of dementia patients who will end up relying on family members for their care.

Career Consequences

A report by the Alzheimer’s Association found that employed women, who are caregivers, are seven times more likely than men to drop from full-time to part-time employment because of caregiving duties. Along the way, women are more likely than men to take a leave of absence from work, forfeit employment benefits because they reduce their hours or simply stop working altogether.

A survey of 1,001 working women aged 45 to 60 who are not self-employed and are caregivers for at least one parent and/or in-law in the United States or Canada, revealed additional concerns. About 50% of respondents believe that they must choose between being a good employee and being a good daughter, 25% feel there is a stigma associated with taking time off from work to care for a parent, 23% say their bosses were unsympathetic, when it comes to balancing work and caregiver responsibilities, 13% have been passed over for a promotion or raise and 9% believe their positions are in jeopardy because of their caregiving responsibilities. Not surprisingly, the average caregiver daughter uses 29% of her paid time off to meet her caregiving responsibilities.

Personal Priorities

Eventually, this “daughter” finds herself the last leaf on her generational tree. Those for whom she previously provided care, have already passed away. No one is left to care for her, when she needs help. If she has any brothers or sisters, they may be retired and trying to navigate their own elder care plans. Her adult children may be spread around the country, and there may be no one nearby to assist.

This stark reality is the reason why every woman needs her own plan for quality long-term care and the money to pay for it. Long-term care insurance can assure quality care, when there is no family caregiver for the caregiver herself. The best time to apply for coverage, is when you are healthy and do not need it.

June 29, 2018 admin

Life Insurance Assurance

Life insurance is something almost everyone will need at one time or another, in one form or another. This is because mortality is 100% on every actuarial chart. Like your estate plan, your insurance needs will vary, depending on what is appropriate for your unique circumstances at any given stage of life. For example, a college student will have different insurance needs than a young couple with minor children, a blended family, or a retired widow. There are three basic types of life insurance, depending on your circumstances and stage of life: term, whole, and universal.

Term Life

Term life insurance is typically the most affordable type of life insurance. It allows you to cover a larger risk with a lower annual premium. It covers a specific time period, or “term” (such as 10 or 20 years or to a specific age, such as 80). When the term ends, the coverage ends. However, if you pass away during the term, while the policy is in force, the insurance company will pay the policy “death benefit” to the policy beneficiary (or beneficiaries) that you designate. Term insurance is customarily used to cover a specific need (e.g., pay off the mortgage and pay for college) for a specific time period.

Term life is a wise investment, if you have a young family that depends on your income. Without your income, term life insurance creates an “instant” estate without you. “Term conversion” is an important policy benefit for those considering term life insurance. Make sure your policy has an option to convert the contract to a “permanent” policy, without evidence of insurability. This means you can convert the term policy, without the requirement of another medical exam or answering health questions, provided you do so within a certain time frame or by a certain age. There are two primary types of permanent life insurance: whole life and universal life.

Whole Life

A whole life insurance policy will cover you, for as long as you live. There are usually options to pay the same amount in monthly premiums, without an increase or to pay a one-time lump sum. Whole life has a guaranteed pay-out when you die. There are also several benefits to this type of policy that you can use while you are still around. First, the cash value you build in the whole life policy grows tax-deferred and can be used during your lifetime. Depending on the insurance contract, you may be able to use the cash value to secure a down payment on a new home, to pay for a child’s college education, or to help fund a new or existing business venture. If you no longer need the insurance protection, then the cash value can supplement your retirement income. Finally, you can also use the insurance policy to create a legacy for your heirs or donate to charity.

Universal Life

Like whole life, a universal life policy allows you to build cash value. It will usually have flexible premium payments and schedules. A universal life insurance policy may be the right option for you, if you want coverage that can last your whole (entire) life. You can build tax-deferred cash value inside the policy to meet other financial goals. Like other life insurance types, universal life insurance can protect the financial security of your loved ones. This type of policy provides you with additional flexibility in premium payments, death benefits, and in ways to save.

Summary

Life insurance is a sensible way to protect the life that you and your family enjoy. There are a variety of other insurance products that an experienced agent can recommend. Do your homework and consult with your estate planning attorney to see how any life insurance policy fits within your overall estate and financial plans. Make sure that it is there when you need it.

May 29, 2018 admin

Baby Boomer Divorces

Although the divorce rate in the United States is declining slightly, the divorce rate among those age 50 and older is increasing. It seems that more people are divorcing later in life, after their children are reared and out on their own. It has been said that a divorce is worse than a death in the family.

While divorce at any age is emotionally stressful, it can be devastating when it comes to the financial security of both parties. However, the financial fall-out after a “gray” divorce (divorce after a long-term marriage or after the age of 50) can be even more catastrophic. Against the backdrop of the emotional and financial costs of divorce, the best advice is to use your best efforts to reconcile.

Not a DIY Project

Sometimes working things out is not possible. If you find that divorce is your only option, then it is best to hire an attorney who specializes in divorce law to represent you. Although that may seem expensive, representing yourself is a very bad idea. As Abraham Lincoln once said, he who represents himself has a fool for a client. This is certainly true when it comes to divorce cases. In the long run, the initial cost of an attorney will be outweighed by the financial benefits you receive from hiring one.

Serious Business

Why does divorcing later in life create many issues that are not as prevalent when divorcing earlier in life? As you get older, you have fewer years to earn an income and accumulate additional assets. If divorcing in retirement, then you are living off your nest egg. While those who divorce earlier in life divide their assets, they have more years left to earn money, accumulate assets, and recover from the financial impact of a divorce.

In contrast, if you are getting a “gray” divorce, it is important to get every marital asset to which you are legally entitled. A good divorce attorney can help you to maximize your share of the marital assets under the law.

Financial Realities

People who leave a marriage later in life, have often spent years in a bad situation and want nothing more than to get out of the marriage. To expedite that process, too many are willing to leave marital assets and other benefits on the negotiating table that are rightfully theirs. For example, you may be entitled to a portion of your spouse’s retirement income. You also may be entitled to spousal support or alimony. If you represent yourself, you likely will be unaware of your financial rights. By the same token, do you really want to provide your ex-spouse with more than the law requires?

Other Considerations

When divorcing, there are other considerations, in addition to the division of marital assets. For example, how are you going to pay for health insurance? If you are covered on your spouse’s health insurance plan, you may be required to pay for your own health insurance under COBRA post-divorce. COBRA premiums will typically be much higher than what you were paying when married. Those monthly premiums will consume more of your monthly income and reduce your standard of living dollar for dollar. Even under the best circumstances, you may need to find part-time employment to supplement your income.

Final Thoughts

Divorce is a major life event. It will require a major adjustment to your lifestyle. If you fail to maximize your share of the marital assets, then that adjustment will be much more difficult. To minimize the negative consequences of your divorce, hire a divorce attorney to protect you and your legal rights to the assets of your marriage.

April 27, 2018 admin

Inheritance Planning Insights

Did you know baby boomer parents will leave an estimated $30 trillion to their offspring over the next 30 to 40 years? That is a lot of money. Hopefully those baby boomer parents will have their estate planning “ducks in a row,” when those transfers occur. What are some questions baby boomers need to be asking?

Is My Estate Plan Current?

Do you know the average age of an estate plan? It is about the same age as the eldest child identified in it. That child now has children of her own and no longer would need to have Aunt Helen serve as her guardian. Over the years, tax laws also change. There are also changes in your thinking regarding who would make your own personal, health care, and financial decisions. The person your child chose as a mate might not have been your first (or last) choice. Do you want that controlling son-in-law having access to the inheritance, in the event of divorce or if your child predeceases? Estate plans are like automobiles. They only work reliably, when they are properly maintained.

Should the Inheritance be Equal?

Should you treat all of your children the same? The general rule, in order to avoid sibling conflicts, is to divide your estate as evenly as possible. You should provide for the orderly distribution of art, jewelry, antiques, and other sentimental one-of-a-kind heirlooms. This rule of thumb would extend beyond assets to sharing responsibilities for settling your affairs.

What if you distribute your estate unequally? You should be prepared to explain your rationale to your children. There are many reasons parents do this. For instance, one child may have an outstanding loan with no intention of repaying the debt. Whatever the reason, if there is an “adjustment” in the inheritance of any heir, then it is wise to explain the reason in your estate plan, or even better in a family meeting.

What if My Child is a Spendthrift?

When it comes to money, some children grow up and others just keep having birthdays. According to research at Ohio State University, the average person will lose half of his inheritance almost immediately by spending thoughtlessly or through poor investments. Most people spend the rest of the money within a year. Even if your child is a “money grownup,” without advanced planning her inheritance could be taken through a divorce, lawsuit, or bankruptcy. How do you protect an inheritance for her? One idea is an inheritance protection trust.

What is an Inheritance Protection Trust?

Every inheritance is subject to potential divorces, lawsuits, and bankruptcies, when it is paid outright to your child. If that child were to then die, the inheritance might pass to her spouse and not your grandchildren. It is as if the inherited assets were always the assets of the child.

For these and other reasons, inheritance trusts can be created as part of your estate plan. These trusts would actually “own” the assets for the “benefit” of your child. You determine the degree your child benefits from (and even controls) the trust assets. For a financially responsible child, the trust purse strings may be looser than for a financially immature child. You get to determine whether you need to protect the inheritance from the child, for the child, or both. Trusts can be created to meet your unique circumstances.

What About Grandchildren?

Inheritance trusts can ensure that your financial legacy remains in your bloodline. For many baby boomers, that is enough motivation for trust planning.

March 27, 2018 admin

What Is “Living Probate”?

Too many people regard estate planning as little more than an after-death distribution plan for their assets. Whether they choose to transfer their wealth through probate with a will or avoid probate by other means, they believe that wealth transfer is all there is to estate planning. This is a big mistake.

The reality is that every 18-year-old has an “estate,” even if he or she does not have two dimes to rub together. Their estate is in their shoes. Upon reaching adulthood, each one of us is responsible for making our own personal, health care, and financial decisions. Even if our station in life is rather simple at any given time, these day-to-day decisions must be made. For example, were “incapacity” a legal justification for not filing a tax return, then there would be a surge in the number of incapacitated people around mid-April each year!

If a newly-minted adult child is incapacitated due to a serious car crash or illness, her parents (who are paying for her college and her health insurance, after all) can automatically decide where she will recover, make her health care decisions and even file her tax return from summer employment, right? Wrong.

What about married couples? What if a husband suffers a severe stroke and is in a coma. Certainly, his wife of 50 years can step right in and make all his personal, health care, and financial decisions, right? Again, wrong.

But I Have a Will …

Many people mistakenly believe that if they have a will, then that is all they need. In reality, their will only has legal authority when the maker of the will has died, and the will has been delivered to the probate court. In other words, your will is of no legal benefit to you while living. This includes the situation where you become incapacitated due to an injury or illness. Consequently, in the absence of proper legal planning for incapacity, you will be subject to the legal system’s default probate process designed for just purposes.

Living Probate

Perhaps you have heard the words “guardian” and “conservator” tossed around. Some states use the terms “guardian” and “conservator” interchangeably. However, other states have specific definitions for each term. A state may define “guardian” as the individual who makes personal and health care decisions for an incapacitated person, while a “conservator” makes financially-related decisions. Semantics aside, the default process is best avoided.

Regardless of what your state calls the process, it will be a hassle that is expensive and will expose your personal and financial information to the public. After the judge, who likely does not know you, appoints someone of her own choosing to make your personal, health care, and financial decisions, that appointed person will be under the ongoing supervision of the judge. Do you really want to subject your loved ones and yourself to this?

The Cure

Fortunately, the cure for living probate is readily available. For starters, everyone age 18 and older needs to have an advance health care directive for personal and health care decisions, along with a general durable power of attorney for financial decisions. These documents may be known by different names, depending on the state, but they should be attorney-prepared to comply with state law. Online versions tend to be generic and likely would not work as intended. For those with more complex financial assets, especially real estate in multiple states, then a revocable living trust can be an excellent approach to asset management in the event of incapacity.

This has been a general overview of a rather complex subject.