While the power of attorney document is a powerful tool in many situations, it will NOT be effective in dealing with the Social Security Administration.  They will not accept any power of attorney, no matter what.   Instead, if you need help or need to provide help to a loved one, the “Representative Payee” designation is appropriate.

What is a “Representative Payee”? 

A Representative Payee is an individual or entity, which can communicate with the Social Security Administration and receive your monthly payments on your behalf.  Your payments must be used for the individual entitled to payment, and not for the benefit of the Representative Payee.

When a “Representative Payee” Needed?

While you are well, you remain in control.  If you become incapacitated, a qualified estate planning attorney can guide your loved ones through the process of becoming a Representative Payee.

Keep Good Records

The Representative Payee must keep records of all expenditures and file a report annually.

Do I Still Need a Power of Attorney?

Absolutely, YES!  You need a financial power of attorney (i.e. general durable power of attorney and a health care power of attorney.)  Powers of attorney are a must for avoiding conservatorship and court interference.  They save you money and save your family time, stress, and a great burden.  Update your power of attorneys every three to five years at a minimum.

Where to Get Help?

If you need help with the Social Security Administration, becoming a Representative Payee, or getting financial and health care powers of attorney, consult with a qualified estate planning attorney.

Legacy APC, A Trusts & Estates Law Firm is a member of the American Academy of Estate Planning Attorneys.

We understand that it can be overwhelming when a loved one is diagnosed with a serious illness.  There are all kind of family, financial, administrative and legal things to do and you may not be sure what to do or how to do it.  That’s why it’s in your best interest to call a qualified estate planning attorney for guidance.

Testamentary Capacity

A qualified estate planning attorney can determine whether your loved one still has legal competence.  If so, estate planning documents can be put into place so that your loved one’s wishes are carried out and your burden is reduced.

Checklist

A qualified estate planning attorney can provide a checklist of things you need to do and things to think about.  This way you won’t overlook anything.

Legal Advice

A qualified estate planning attorney can help you and your loved ones make important decisions.  Be sure not to take the advice of well-meaning neighbors, bank tellers, or loved ones.  Get good legal advice before making decisions.

Referrals

A qualified estate planning attorney can refer you to other professionals such as geriatric care managers, realtors, financial advisors, appraisers, insurance professionals, home care specialists, hospice care suppliers, etc.

Although it’s always in your loved one’s benefit to take care of these matters before serious illness strikes, it may not be too late.  Consult with a qualified estate planning attorney right away.

Legacy APC, A Trusts & Estates Law Firm is a member of the American Academy of Estate Planning Attorneys.

It’s a new year; time for a clean slate and a fresh start.  It’s time to have your estate plan professionally reviewed for potential updates.  This is one New Year’s resolution that you can check off the list right away.  Whew!  In fact, call a qualified estate planning attorney and make an appointment for an estate plan review now.

Why Does My Estate Plan Need to be Reviewed for Updates?

Your estate plan needs to be professionally reviewed for potential required updates because everything changes.  Think back just over the last few years.  The law has changed and your personal life and finances, likely, have changed.

Your estate plan will only work if it reflects the current law as well as your current goals, personal and financial situation.

What Changes Necessitate a Change in My Estate Plan?

The passage of 3 to 5 years will naturally cause your estate plan to go stale.  Your documents may not be honored because they’re “old.”

Other changes that cause an estate plan to fail are a move to a new state, significant change in health, and the death or disability of an executor (or guardian, trustee, or power of attorney agent.)  Think about the changes that a divorce, new relationship, new child, or new business bring to your life.

It is likely in your best interest to have your estate plan professionally reviewed in 2012.  Get it on the calendar now so you can check “estate plan update” off your New Year’s resolution list.  Have a wonderful 2012!!

Legacy APC, A Trusts & Estates Law Firm is a member of the American Academy of Estate Planning Attorneys.

As the New Year starts, it’s a time of new beginnings, a clean slate, fresh start.  Now is the time to prepare your estate plan for the New Year.  Here’s how.

1.  Evaluate your life, finances, and estate plan.  Have things changed?  If so, your estate plan needs a professional review.  Your plan should be reviewed, if it’s been more than 3 to 5 years since updated or if you’ve had a big change in your personal life, finances, or health.

2.  Double check asset ownership and beneficiary designations.  How do you own your stuff?  Are your assets owned so that your estate plan will work?  For example, if you have a living trust, are your assets funded into your trust?  Have you updated beneficiary designations since you got divorced?

3.  Get organized.  Being organized will increase your peace of mind and it will significantly reduce the burden on loved ones’ shoulders, if they need to step into your shoes to assist you.  Gather your estate planning documents, financial papers, and other important certificates and documents.  Put them all in one drawer, a fire safe, or a shelf in your home office.

4.  Make a list of all accounts, usernames, passwords, and PINs.  Even off-line accounts sometimes have telephone PINs.  Keep the list updated throughout the New Year.

5.  Communicate.  Let your loved ones know that you have an estate plan; let them know where to find your estate planning documents and other important papers; provide contact information so they can reach your estate planning attorney for help; and, tell your loved ones that you do indeed love them.

If it’s time for a professional review of your estate plan, or if you have any questions, consult with an estate planning attorney.

Legacy APC, A Trusts & Estates Law Firm is a member of the American Academy of Estate Planning Attorneys.

There are minimum requirements that each estate plan must contain to cover basic needs.  This is the estate plan bottom line; it may not be all that is recommended in your individual situation, but it is the minimum that each adult needs.

The 3 Essential and Simple Estate Planning Documents

1.  Will

2.  Property/Financial Power of Attorney

3.  Health Care Power of Attorney with HIPAA Release

Your Will

Your Will does three things:  Appoints executors, appoints guardians for minor children, and distributes your assets.  If you die without a Will, the court will intervene and appoint an executor (called an “administrator”) and decide who raises your children.  California state law will dictate who gets your assets.  None of this may be what you want.

Your Property/Financial Power of Attorney

Your Property/Financial Power of Attorney does one thing:  It authorizes agents to step into your shoes to handle day-to-day personal financial affairs.  If you become disabled without a Property/Financial Power of Attorney, the court will intervene and appoint a conservator (i.e. guardian) to take over your finances; the court may appoint an attorney, not a family member.  The court has that power and this may not be what you’d want.

Health Care Power of Attorney with HIPAA Release

Your Health Care Power of Attorney with HIPAA Release appoints an agent to make health care decisions on your behalf (when you cannot) and meets federal privacy standards.  If you don’t have a Health Care Power of Attorney with HIPAA Release and you can’t provide informed consent, you don’t get to pick who makes health care decisions on your behalf.

If you don’t have this bottom line estate plan, you need it.  Consult with a qualified estate planning attorney.

Legacy APC, A Trusts & Estates Law Firm is a member of the American Academy of Estate Planning Attorneys.

We can answer this common question, “Can the nursing home take my living trust assets?” in one word.  “Yes.”  Assets titled in your own living trust (or in your name) can be taken by the nursing home.  They must be spent first, before you can qualify for MediCal to pay for your nursing home care.   This means that the assets must be spent down for living expenses, nursing home care, or exempt assets before MediCal kicks in.

Nursing Home Planning Strategies

However, there are other ways to protect your assets and the sooner you meet with an estate planning –elder law attorney, the more options you have and the more money you can protect.  Common nursing home planning strategies include long term care insurance, income only trusts, gifting programs, annuities, and the purchase of exempt assets such as a new roof for the house, a television for the room, and a lift chair as well as paying off the mortgage or car.

Are You the Beneficiary of Someone Else’s Living Trust?

On the other hand, if you know you’re someone else’s beneficiary, you may want to have a chat with him or her and ask that the assets come to you in an asset protected beneficiary trust.  If you receive assets in trust, they can’t be taken by the nursing home, divorcing spouse, or another creditor.

Conversely, if you receive an inheritance or gift outright, in your individual name, it can be taken by the nursing home, divorcing spouse, car accident creditor, bankruptcy creditor, and the like.

A Loved One Can Give You Protection You Can’t Get for Yourself

While your own revocable living trust cannot protect against your creditors such as the nursing home, someone else’s can.  Consult with a qualified estate planning attorney to determine the best way to own your assets, plan for nursing home care, and give/receive an inheritance or gift.

Legacy APC, A Trusts & Estates Law Firm is a member of the American Academy of Estate Planning Attorneys.

The costs of maintaining a basic estate plan are minimal.  There are no separate tax returns needed, just because you have a will or a living trust.  The only costs would be for professional review and whatever updates are necessary; a professional review is recommended every three to five years.  Your estate planning attorney will explain the fees (in writing and verbally) ahead of time and won’t do any work without your permission.

These legal fees tend to reduce the costs incurred upon disability or death.  Planning ahead with a comprehensive up-to-date estate planning can avoid the cost (and loss of control, hassle, and time delay) of court interference during the conservatorship process (upon disability) and the probate process (upon death.)

More good news is that any legal fees associated with tax planning or asset management planning that protects and conserves income-producing property is tax deductible.  Your attorney will give you a detailed receipt, indicating tax deductibility.

If you have advanced estate planning that includes life insurance trusts, charitable trusts, and other tax savings trusts, these trusts would have annual tax returns and might have professional trustee fees.  You should know about these costs up front, but a qualified estate planning attorney will only recommend this type of planning if it’s a good fit for you.  Typically, the money spent on maintenance pales in comparison to the monies saved through good planning.

It’s important to note that while a professional review is recommended only three to five years, you should have your estate plan reviewed sooner, under certain conditions.  Examples would be a move to a new state, marriage, divorce, new child, significant change in assets, significant health change, change in goals, and the death or disability of a trusted helper (successor trustee, executor, guardian, or power of attorney agent.)

To understand the specific costs of maintaining your individual estate plan, consult with a qualified estate planning attorney.

Legacy APC, A Trusts & Estates Law Firm is a member of the American Academy of Estate Planning Attorneys.

Many folks such as spouses attempt to use jointly owned property to avoid probate.  Jointly owned property avoids probate, but only at the first death.  If probate is avoided at the second death, it’s, likely because the assets have been placed in joint names with a new spouse and your children may be disinherited.

The best way to avoid probate is with a fully funded revocable living trust.  A trust is funded when all assets are either titled in the name of the trust and the beneficiary designation (of contract assets such as life insurance and retirement plans) is changed to the name of the trust.

In addition to not working to avoid probate, jointly owned property (i.e. joint tenants with right of survivorship) should be avoided for its many pitfalls such as accidently disinheriting your children.

For example,

Sally owns her investment accounts, bank accounts, and real estate jointly with her spouse, Frank. They have three children. 

Sally dies and Frank inherits all the assets, outright, and in his individual name. 

Frank remarries; his wife’s name is Jane.  Being used to owning everything jointly with a spouse, Frank puts all of the assets that he and Sally owned together in joint names with Jane.

Frank dies.

Jane inherits everything.

Frank and Sally’s three children are totally disinherited.

The above example is of a first marriage with jointly owned assets.  In a second marriage with jointly owned property, if you die first, your children will absolutely be disinherited.

Instead, look what happens if trust planning is used to avoid probate.

Sally and Frank set up a revocable living trust and fund it.  Sally dies.  Frank and the children inherit Sally’s share of the assets in trust.

Frank marries Jane.

Per trust instructions, the assets remain in the trust to benefit only Frank and the children.

Frank dies.

The children receive Sally and Frank’s assets in their own individual lifetime trust shares.  All is well.

If you want to avoid probate, but not disinherit your children, consult with a qualified estate planning attorney and avoid jointly owned property.

Legacy APC, A Trusts & Estates Law Firm is a member of the American Academy of Estate Planning Attorneys.

In 2011, the Wall Street Journal reported $32.9 billion in unclaimed funds.  You can use estate planning to ensure your money doesn’t get lost and join the other $32.9 billion.  Some of these funds represent people who forgot to roll over 401ks when they left a job; and, much of the funds were unclaimed when someone died.  If your loved ones don’t know about your life insurance policies, bank accounts, and investment accounts, they can’t claim them when you die.  Estate planning and organization is the key to ensuring that your hard earned assets aren’t lost.  By the way, you can check for unclaimed assets at www.MissingMoney.com

When you engage in the estate planning process, you will be forced to make a list of your assets and consider how your assets are owned.  Proper asset ownership is an important key to an estate plan that works.

If you have a revocable living trust as part of your estate plan, you must fund your trust.  This means you transfer the title of your assets into the name of your trust and that you change the beneficiary designation on life insurance, annuities, and retirement plans to the name of your trust.

If you have a will-based estate plan, remember that your will only controls asses in your individual name.  If you die with assets in joint names with a spouse or someone else, your will won’t control these assets.

To ensure all of your assets are claimed at your death and your estate plan works, show your loved ones where you keep all of your estate planning documents, financial papers, certificates, and important papers.  Keep them together in a file and update your file quarterly when your new investment statements are released.

In addition, be sure to include a list of all online accounts (utility, phone, bank, investment, retirement, 529 plans, social media, email, blog, website, PayPal, EBay, photo sharing, and the like.)  Add your username, password, and PIN for each account.  Update frequently when you add another account or change a password.

Stay organized and keep your estate plan up-to-date so your loved ones find all of your assets.  As always, consult with a qualified estate planning attorney with questions or concerns.

Legacy APC, A Trusts & Estates Law Firm is a member of the American Academy of Estate Planning Attorneys.

Trying to go it alone practicing law rarely yields positive results.  In fact, amateur estate planning wreaks havoc.  If you don’t have an up-to-date, comprehensive estate plan, consult with a qualified estate planning attorney.  If you don’t, the following may be the result.

• Jane and Michael are do-it-yourselfers; they do their own plumbing, taxes, and estate planning.  They own all of their assets jointly and when Michael dies in a fishing accident, Jane inherits all of the assets outright.  After a period of mourning, Jane remarries and re-titles in joint names with her new husband, Frank.  Jane dies of cancer and Frank inherits all of the assets that were formerly Jane and Michael’s; their children get nothing.  Consultation with a qualified estate planning attorney could have prevented the disinheritance of Jane and Michael’s children. 

• Rheta fills out legal forms she downloaded from the internet.  She names her brother, Johnny, in trusted helper positions and signs the documents.  When Rheta is seriously injured in a car accident, she is unable to manage her assets; Johnny is suffering from severe depression stemming from a divorce, and he is unable to serve.  There are no contingent trusted helpers named, so a conservatorship process is required.  This drains Rheta’s bank account and a stranger, a local attorney, is named as her conservator. 

• Sally downloads estate planning documents from LegalZoom for her Uncle Robert.  She has Robert sign the documents and proceeds to try to fund his trust, but no financial institutions will transfer assets into the trust because they are unsure of its validity.  Robert dies and the trust is unfunded; therefore, probate is guaranteed; probate is very expensive in California.  In addition, Robert’s will was not executed properly and was, therefore, invalid.  His estate plan failed totally.

Practicing law and, specifically, estate planning is not an amateur sport.  Get a solid, comprehensive, and legally valid in place by consulting with a qualified estate planning attorney.

Legacy APC, A Trusts & Estates Law Firm is a member of the American Academy of Estate Planning Attorneys.