Garland Law Offices, P.A.

What Estate Planning Documents Does My Child Need Now That She’s an Adult?

“Parents may be surprised to learn that without some specific documents in place, they will no longer be able to obtain information or help their loved one should they be in an accident or other situation, where they can’t advocate for themselves.”

Your child may graduate from high school and head off to college or start a full-time job or vocational training program.

Although they’re still your children, the law sees them as are adults. As a result, parents’ “rights” to protect their adult children or make decisions for them immediately becomes quite limited.

The Tewksbury Town Crier’s recent article, “Is your child turning 18? Here’s what you need to know,” explains that people often have an estate planning attorney draft the appropriate documents, so they will be legal and binding. Let’s look at a list of documents to consider and discuss with your young adult:

• HIPAA Authorization: if your 18-year-old has a job in another state or will be attending college and needs medical records or assistance making appointments, ask her to go to the doctor’s and dentist’s office and sign forms that designate agents to act on her behalf. Due to HIPAA laws, information can’t be released without the adult child’s permission.
• Healthcare Proxy: Have your 18-year old complete this document, make a copy, put a copy on each parent or guardian’s phone and put a copy on your child’s phone. This is for an emergency, like when the child can’t speak for herself. However, don’t wait for an emergency. If your child is at college, the school will only contact you as the emergency contact, but the proxy is between you and the hospital and includes mental health issues. A healthcare proxy lets you to participate in life and death decisions, should your child not be able to advocate for herself.
• Durable Power of Attorney: A general durable power of attorney or financial power of attorney must also be signed by the 18-year old, designating his parents, guardians, or others as agents authorized to act on his behalf. This allows the agent access to financial information, so that he can participate in the financial issues with a university or business in the event that the child cannot.
• FERPA: This is an educational records release, which allows the educational institution to share grades, transcripts and other related materials with parents or designated agents. Without it, the school will not provide you with access to any information.

Finally, encourage your young adult family member to register to vote.

Reference: Tewksbury Town Crier (December 8, 2019) “Is your child turning 18? Here’s what you need to know”

What Should I Keep in Mind, When I Remarry?

“When you remarry, you're not only combining residences with your new spouse, you're also merging your finances. If you have children, it may involve some financial-related stress. For instance, you might need to factor in child support payments or consider whether your new marriage will impact your children's inheritance.”

Before you remarry, discuss any past financial issues with your fiancé, and plan for success, by considering some important ideas.

U.S. News & World Report’s recent article, “6 Financial Considerations for Remarriage,” lists six financial considerations and crucial steps to take before you remarry:

1. Revise Your Budget. Whether this is your first, second, or third marriage, couples need to create a budget for daily spending, monthly expenses and big-ticket purchases. You should also talk about your household expenses and costs related to children from a prior marriage. If you have to pay alimony, let your new spouse know. It’s also a good time to talk about credit card debt, past investments you've made and retirement accounts. You may want to draft a prenuptial agreement.
2. Inform your Fiancé of Any Financial Obligations, Including Child Support. Before getting married, review the laws to see how child support may be impacted by marriage to a new person. While it's unlikely that you would lose your child support if you remarry, the family court may reduce the amount. If a person paying the child support is remarrying, they should talk to their partner prior to the marriage to make certain they understand the amount of the payments.
3. Check Insurance and Benefits. A frequent mistake when remarrying, is not updating the beneficiaries of life insurance policies. You also may have to look at other updates to your coverage, like who will be on your health plan, and you may need to modify your homeowner’s insurance with a spouse and children in residence. Understand that if you get government benefits, like Medicaid or Social Security, you could forfeit your Medicaid eligibility when you remarry if your spouse's income is too high to be eligible. You might also discover that your Social Security benefits from an ex-spouse will stop, after you remarry.

A second marriage may also increase a parent's income for federal financial aid purposes for college. If a parent is the custodial parent for the FAFSA (Free Application for Federal Student Aid), their income now may include their new spouse's income. It is important to discuss saving for college and tuition costs, as well as if either partner has children from a prior marriage, whether each spouse will save money for tuition costs.

5. Estate Planning Is Critical. Check your estate planning before remarrying. That includes a will, medical powers of attorney, do not resuscitate orders, durable powers of attorney, designations of guardianship or consent to adoption and various trusts, including trusts for special needs children. If you have children from a prior relationship, hire a qualified estate planning attorney.
6. Create an Inheritance Plan. If you have children from a prior relationship, you need to put the right estate planning documents in place to protect them from being disinherited. In some states, a last will and testament may be enough, but in others it may make sense to also have a revocable living trust.

The biggest mistake that couples commit when entering their second marriage, is thinking that their own children will inherit any of their estate, if they die first. Perhaps the adult children will inherit some of the estate, but you should speak to an estate attorney to create a customized strategic plan. In many instances, the living spouse will change the plan and leave everything to their children and nothing to yours.

Reference: U.S. News & World Report (November 18, 2019) “6 Financial Considerations for Remarriage”

When Do I Need a Power of Attorney?

“In the absence of a durable power of attorney, who has the right to sign for an incapacitated person?”

Without a valid durable power of attorney, the answer really depends on what documents need to be signed.

A power of attorney is a legal document signed by the “Principal,” granting the authority to another individual to make decisions on the Principal’s behalf. This document is only in effect during the lifetime of the Principal.

nj.com’s recent article on this topic asks “Who can sign for an incapacitated person if there’s no power of attorney?” The article noted that to have the authority to conduct financial transactions concerning the assets solely owned by the incapacitated person who failed to execute a power of attorney, a guardian will have to be appointed by the court.

A guardianship is a legal relationship established by the court, in which an individual is given legal authority over another when that person is unable to make safe and sound decisions regarding his or her person, or property.

For example, in New Jersey, an application will have to be filed in the probate part of the Superior Court, in the county where the incapacitated person resides.

If it’s not an emergency, a guardian also will need to be appointed to make medical decisions for an incapacitated person who hasn’t signed a health care proxy. This is a legal document that gives an agent the authority to make health care decisions for an incapacitated person. It will take effect, if the person is incapacitated or unable to communicate. The agent will make decisions that reflect the wishes of the incapacitated individual.

It’s typically not necessary to be appointed as an agent under a power of attorney or health care proxy or legal guardian for another person to sign an assisted living or nursing home admissions contract or a Medicaid application.

However, prior to signing another person’s admissions contract, read the fine print to be certain that you don’t become responsible for the bills!

Reference: nj.com (July 22, 2019) “Who can sign for an incapacitated person if there’s no power of attorney?”

How Do I Discuss My Parents’ Long-Term Financial Goals With Them?

“If you haven’t discussed your parents’ long-term financial goals with them, you aren’t alone.”

A recent study by Ameriprise Financial found that more than one-third of adult children say they haven’t had a conversation about their parents’ long-term financial goals. Even though discussing this delicate topic may seem uncomfortable, addressing it now can help avoid challenges and uncertainty in the future. To that end, the Ameriprise Family Wealth Checkup study found that those who talk about money matters, feel more confident about their financial future.

The Enterprise’s recent article, “Four financial questions to ask your parents,” provides some questions that can help you start the dialogue.

“What do you want to achieve in the next five or 10 years?” Understand your parents’ aspirations for the next few years. This includes their personal and financial goals and when they plan to retire (if they haven’t already). Do they want to move closer to their grandchildren or to warmer weather? Getting an idea of how they want to spend their time, will help you know what to expect in the years ahead.

“Where is your financial information located in case of an emergency?” An incident can happen at any time, so it’s essential that you know how to access key personal, financial and estate planning documents. You should have the contact info for their financial adviser, tax professional and estate planning attorney, and be sure your parents have the right permissions set, so you can step in when the need arises. You should also ask your parents to share the passwords for their primary accounts or let you know where you can find a password list.

“How do you see your legacy?” Talk to your parents about how they want to be remembered and their plans for making that happen. These components can be essential to the discussion:

• Ask them if they have an updated will or trust, and if there’s anything they’d like to disclose about how the assets will be distributed.
• Health care choices and expenses are often a big source of stress for retirees. Talk to your parents about their current health priorities and the future and have them formalize their wishes in a health-care directive, which lets them name a loved one to make medical decisions, if they’re unable to do so.

“How can I help?” Proactively offering to help, may get rid of some of the frustrations or relieve stress for even the most independent and well-prepared parents. The assistance may be non-financial, like doing house projects or giving them more time with their grandchildren. You should also look into including an attorney in the discussion, if your parents have estate planning questions.

Retirement and legacy planning can be complex. However, taking the time to have frequent conversations with your parents, can help you all prepare for the future.

Reference: The Enterprise (August 19, 2019) “Four financial questions to ask your parents”

Why Do Singles Need These Two Estate Planning Tools?

“As it turns out, though, living wills and durable power of attorney for healthcare are two things that single people might especially want to give some thought to.”

Morningstar’s article, “2 Estate-Planning Tools That Singles Should Consider” explains that a living will, or advance medical directive, is a legal document that details your wishes for life-sustaining treatment. It's a document that you sign when you're of sound mind and says you want to be removed from life supporting measures, if you become terminally ill and incapacitated.

If you’re on life support with no chance of getting better, you’d choose to have your family avoid the expense and stress of keeping you alive artificially.

Like a living will, a durable power of attorney for healthcare is a legal document that names an agent to make healthcare decisions for you, if you are unable to make them yourself.

A durable power of attorney for healthcare can provide your instructions in circumstances in which you’re not necessarily terminally ill, but you are incapacitated.

When selecting an agent, find a person you trust enough to act on your behalf when you’re unable. Let this person know exactly how you feel about blood transfusions, organ transplants, disclosure of your medical information and other sensitive topics that may arise, if you’re incapacitated.

A power of attorney eliminates any confusion, especially if this person is someone other than your spouse. Your doctors will know exactly who the decision-maker is among your relatives and friends.

These two documents aren't all that comprise a fully comprehensive estate plan. Singles should regularly make certain that the beneficiary designations on their checking and retirement accounts are up to date.

You should also consider your life insurance needs, especially if you have children and/or a mortgage.

It is also important to understand that a living will doesn’t address the issues of a will. A will ensures that your property is distributed after your death, in accordance with your wishes. Ask for help from an experienced estate planning attorney.

These two documents—a living will and a durable power of attorney—can help ensure that in a healthcare emergency, any medical and financial decisions made on your behalf are in accordance with what you really want. Speak with to an estate-planning attorney in your state to get definitive answers to your questions.

Reference: Morningstar (April 23, 2019) “2 Estate-Planning Tools That Singles Should Consider”

How Do I Pick the Right Healthcare Proxy?

“Your proxy should be willing to speak on your behalf and act on your wishes, not their own.”

No matter your age, it makes sense to designate a healthcare proxy. That’s a person who can make critical medical decisions for you in a crisis.

Many people get stressed, when asked to supply a name for their healthcare proxy. As a result, they end up making a bad selection. They can also fail to share that information with the person they selected.

Forbes’ recent article, “How To Select A Healthcare Proxy,” says that while the odds of being called into service are low, the person we choose for such a role should be picked with great thought, as to their availability and their suitability. Let’s look at these guidelines that can help with the selection.

Your healthcare proxy should know you well, understand your values, and be able to distinguish them from his or her own. The person must also be willing to discuss sensitive topics in depth, in order to gain a true understanding of what you want and don’t want.

If you have close family, it may seem obvious to pick your spouse or your first-born child or your closest sibling as your proxy. However, ask yourself if this person is the best person for the job. He or she may have to deal with push-back from other members of the family or conflict among family, friends and medical personnel. Can they handle this?

Age. Your proxy should be available long into the future. If you want someone in that position who’s close to your age, be sure to also select back-ups, and select a person who’s much younger.

Geography. The person in first position on your healthcare proxy should live close by, because hospitals frequently require a live human being to make critical care decisions. Your proxy needs to be able to get to the facility quickly.

Choose multiples. Select more than one person named as a proxy. If the person in first position can’t get there or is incapacitated, someone else will have to take their place.

When you’ve made your selections on your advance directive, have a one-to-one conversation with each person you name—no matter whether they are in first position on your document or as a back-up. You should also tell family members and close friends of your choice.

Reference: Forbes (April 10, 2019) “How To Select A Healthcare Proxy”

Why Is a Revocable Trust So Valuable in Estate Planning?

“Trusts are one of the most versatile items of the financial planning toolkit. However, they are not just for rich people. With the new higher estate tax exemptions, avoiding or reducing estate tax is not a concern for most of us.”

There’s quite a bit that a trust can do to solve big estate planning and tax problems for many families.

As Forbes explains in its recent article, “Revocable Trusts: The Swiss Army Knife Of Financial Planning,” trusts are a critical component of a proper estate plan. There are three parties to a trust: the owner of some property (settler or grantor) turns it over to a trusted person or organization (trustee) under a trust arrangement to hold and manage for the benefit of someone (the beneficiary). A written trust document will spell out the terms of the arrangement.

One of the most useful trusts is a revocable trust (inter vivos) where the grantor creates a trust, funds it, manages it by herself, and has unrestricted rights to the trust assets (corpus). The grantor has the right at any point to revoke the trust, by simply tearing up the document and reclaiming the assets, or perhaps modifying the trust to accomplish other estate planning goals.

After discussing trusts with your attorney, he or she will draft the trust document and re-title property to the trust. The assets transferred to a revocable trust can be reclaimed at any time. The grantor has unrestricted rights to the property. During the life of the grantor, the trust provides protection and management, if and when it’s needed.

Let’s examine the potential lifetime and estate planning benefits that can be incorporated into the trust:

• Lifetime Benefits. If the grantor is unable or uninterested in managing the trust, the grantor can hire an investment advisor to manage the account in one of the major discount brokerages, or he can appoint a trust company to act for him.
• Incapacity. A trusted spouse, child, or friend can be named to care for and represent the needs of the grantor/beneficiary. She will manage the assets during incapacity, without having to declare the grantor incompetent and petitioning for a guardianship. After the grantor has recovered, she can resume the duties as trustee.
• This can be a stressful legal proceeding that makes the grantor a ward of the state. This proceeding can be expensive, public, humiliating, restrictive and burdensome. However, a well-drafted trust (along with powers of attorney) avoids this.

The revocable trust is a great tool for estate planning because it bypasses probate, which can mean considerably less expense, stress and time.

In addition to a trust, ask your attorney about the rest of your estate plan: a will, powers of attorney, medical directives and other considerations.

Any trust should be created by a very competent trust attorney, after a discussion about what you want to accomplish.

Reference: Forbes (February 20, 2019) “Revocable Trusts: The Swiss Army Knife Of Financial Planning”

What are the “Must Have” Estate Planning Documents?

“Having these three legal documents in place can make a huge difference for your heirs.”

What do Aretha Franklin, Kurt Cobain, and Prince have in common? Aside from being famous and talented, each of these stars passed away without a will. All three had the money and attorneys to draft a proper estate plan, but for whatever reason, they didn't draft one. It’s a good lesson to not neglect your estate plan.

Motley Fool reports in the article, “3 Must-Have Estate Planning Documents To Get Done This Year,” that dying without a will creates numerous problems for your family. If there are no legal instructions in place, probate law dictates the distribution of your assets and selection of guardians for your minor children, which can cause problems. Regardless of your personal situation, you should think about creating these three important estate planning documents.

1. Will. A will is used to distribute your estate, according to your instructions. A will can say how much and what type of asset each heir will receive, to minimize family fighting after your death. If you have young children, you can designate guardians in your will to be in charge of their care. If you die without a will, the probate judge will order who becomes their guardian.

You also need a will to make charitable bequests, to expedite the probate court process and to reduce or eliminate estate taxes. When you draft your will, you'll appoint trusted people to serve as the executor and the trustee.

2. Living will. A living will can take effect while you are still alive. This is a legal document that sets out your instructions for medical treatment, if you become unable to communicate, such as whether or not you want to be placed on life support. A living will can relieve the emotional burden from your family of having to make difficult decisions.
3. Power of attorney. This legal document helps in the event you’re incapacitated or in the hospital in an unresponsive state. A power of attorney gives the individual you designate the authority to transact financial and legal matters on your behalf. Set up a power of attorney, before you need it. If you don’t and you're unable to make decisions, your family may have to petition the court to get those powers, which costs time and money.

Estate planning is a huge favor that you’re doing for your family. Get these three legal documents in place.

Reference: Motley Fool (February 18, 2019) “3 Must-Have Estate Planning Documents To Get Done This Year”

What Do Parents Need to Know About Writing a Will?

“Preparing a will is one of the most important steps a parent can take to protect their family.”

Who wants to think about their own mortality? No one. However, it’s a fact of life. Failing to plan for your eventual death by preparing a will—especially as a parent—can result in issues for your loved ones. If you die without a will, it can mean conflict among your survivors, as they attempt to see how best to divide up your assets.

Fatherly’s recent article, “How to Write a Will: 8 Tips Every Parent Needs to Know” says that families can battle over big assets like cars to small assets like a collection of supposedly rare books. They can fight over anything and everything. Therefore, remember to prepare and sign a last will and testament to dispose of your property the way you want.

Dying without a will means your estate will be disposed of according to the intestacy laws. That could leave your loved ones in the lurch. For instance, in some states, your spouse may only get half your estate, with the remainder going to your parents.

Writing a will is essential, and you should not try to do it yourself. Instead, hire an experienced estate planning lawyer. Along with this, keep these items in mind.

Plan for Every Scenario. When doing your estate planning, consider the various scenarios and contingencies that can happen after you’re gone. A well prepared will includes when and where you want your assets to go. Be wise in how to distribute your assets, to whom they will be going and the timing.

Family Dynamics. You must be very specific when drafting up a will, especially if family circumstances are unique, such when there are children from previous marriages who aren’t legally adopted by a spouse. They could be disinherited. Work with an attorney to make sure they receive what you intend with specific details. If you and your partner aren’t legally married, your significant other could find himself or herself disinherited from your assets after you’re dead.

Designating Your Children’s Guardian. If you don’t name a guardian for your children (in cases of either single parenthood or where both parents pass away), the state will determine who gets your children.

Specificity. Your will is a chance to say who gets what. If you want your brother to get the baseball card collection, you should write it down in your will or it’s not enforceable. In some states, you can attach a written list of these personal items to your will.

Health Care. Begin planning your will when you’re healthy so that, in the event of disaster, you will have a financial power of attorney and a health care agent in place. If you become too ill to make decisions yourself, you’ll need to appoint someone to make those decisions for you.

Rules for Minors. Minors can own property, but they’ll have no control over it until they turn 18. If parents leave their home to their minor child, the surviving spouse will have issues if they want to sell it. Likewise, if a child is named the beneficiary of a life insurance policy, IRA, or 401(k), those assets will go into a protected account.

Don’t Do It Yourself. This cannot be emphasized enough. It’s tempting to create a will from a generic form online. But this may be a recipe for disaster. If your will is drafted poorly, your family will suffer the consequences. Generic forms found online are just that—generic. Families are not generic. Work with an experienced estate planning attorney to help you with what can be a complex process.

Reference: Fatherly (February 6, 2019) “How to Write a Will: 8 Tips Every Parent Needs to Know”

Why is a Will Such an Important Document?

“Depending on your age, you may or may not have considered a will an important document to have.”

It’s not uncommon for people to put estate planning off, since it deals with something most of us don’t like to think about: our imminent death. However, the old saying is true: we can avoid many things, except death and taxes.

The Lebanon Democrat’s recent article, “End-of-life planning beneficial no matter your age,” reports that two out of every five people older than 45 don’t have a prepared will—and they haven’t even thought about estate planning. However, even a little bit of simple planning can help make life for your family much easier when you die.

There will be less stress and fewer fights, and it can help survivors know what should be done and how to do it. However, if you die without a will, your property may be awarded to others based on the decisions of a judge and an appointed administrator—they could be complete strangers to you.

Get all of your wishes down in writing, so your family understands and can follow your instructions. This will make things much easier for your surviving family and/or beneficiaries. If you have a senior in your family, make certain that he or she has a will, especially while they are still legally competent.

Talk to an experienced estate planning attorney. You should arrive with some understanding of these basics:

• Name the individual, known as the executor, you want to administer your affairs.
• Decide who should take control of your possessions. Mapping out who gets what, can save a lot of time and anguish down the road.
• As you make out your will, also have your attorney prepare a living will—a legal document that states what actions should be taken for your health, if you’re no longer able to make decisions for yourself, due to illness or incapacity.
• Keep your original will in a safe place and be sure that others know where to find it, in case of an emergency.

Finally, be sure that you update your will as time goes by. Events such as the death of a spouse or other loved one, divorce, retirement, relocation or the addition of a family member may require changes to be made.

Reference: Lebanon Democrat (January 18, 2019) “End-of-life planning beneficial no matter your age”