Off to College? Don’t Forget Your Health Directive!
August 25, 2011
The hot and lazy days of summer are almost over; parents are thinking about back-to-school sales, kids are making the most of their final days of freedom, and college freshmen are getting ready to embark on their first year of adult-hood. Most of these college students have a list (whether mental or physical) of all the things they’ll need as they leave the nest for the first time, but most of these lists will be missing two key items: A Healthcare Directive and a HIPAA Form.
You may be wondering why a college student needs estate planning documents—aren’t those just for older, established people? Not at all.
Most incoming college students are now (or will soon be) 18, and considered adults under the law. This means that hospitals and medical personnel are no longer required to ask the parent’s permission before performing medical procedures. In fact, once your child is 18 health care providers are no longer required to share information with the parents at all.
Most college students (and parents) are unaware of this side-effect of turning 18, and parents and children alike can run into frustrating roadblocks should an accident occur. You can avoid these roadblocks by simply having your young adult execute the two simple documents mentioned in this blog post.
A Healthcare Directive can be an in depth document or a very simple one, but the most important part for your new 18 year old will be the nomination of a healthcare agent. A healthcare agent is the person who will make medical decisions for your child if he or she is unable to make them alone.
A HIPPA Authorization Form addresses the issue of security and privacy of health data. In a HIPAA form your child can list the people who have permission to receive information about his or her medical records and status.
For a fledgling 18 year old these two documents are of the utmost importance, and with the right help, they are very easy to execute. Don’t wait until it’s too late; make sure your young adult has these documents completed before they leave the nest.
Unusual Things Happen Every Day…
In a recent article in the Huffington Post financial columnist Don McNay tells the frustrating, sad, and “unusual” story of how the greater part of his mother’s and his sister’s estates ended up in the hands of people they would never have chosen to receive it… all because neither of them had a will or estate plan when they died.
When McNay’s mother died unexpectedly in April 2006 neither he nor his sister really worried about her lack of a will. After all, “her only asset was our childhood home, and my sister and I were her only children. We would split the ownership of the house equally.” McNay paid for the funeral, and “advanced the estate money to pay delinquent property taxes, some outstanding bills, and the mortgage on Mom’s house,” and he and his sister worked out an informal deal to even things up financially once the estate was settled and the house was mortgaged.
Tragically, his sister fell down some steps and died in October 2006, also without a will, and this is when the real trouble began. Although his sister had left her husband years before, they had never formally divorced; which meant that McNay’s sister’s share of their mother’s estate now belonged to her ex-husband, her adult son, and her minor daughter—and none of it would be used to reimburse McNay for what he had lent the estate.
McNay writes honestly and persuasively about his experience, and we recommend reading the entire article, but the long and short of it is this: After several rounds in court, after the involvement of several attorneys, and after being forced to sell the family home for less than what it was worth, “the person who got the most money from my mother’s estate was my former brother-in-law.”
Unfortunately, McNay’s story is all too common. Situations such as this one could be easily (and inexpensively) avoided simply by consulting an attorney and drawing up a simple will; and yet more than 60 percent of Americans don’t have wills. Whether it’s because they’re uncomfortable thinking about their own death, think they’re too young to worry about it, or simply feel they don’t have enough assets to worry about it, more than half of Americans today refuse to take the one simple step that can protect their families from heartache and expense.
We suspect that most people believe (erroneously) that this kind of thing just won’t happen to them. After all, as McNay writes in his article, “My family’s series of events was unusual,” but then again, “unusual things happen every day.”
Don’t Disinherit Your Loved Ones By Mistake—Review Your Estate Plan Regularly
August 21, 2011
All of our readers know just how important—how essential—a will or trust is to protecting your family after you pass away. Leaving clear and tangible instructions can prevent family infighting as well as hurt or unsettled feelings; and leaving a legally airtight will can prevent wasted time and money in unnecessarily long probate proceedings. But for all of this, there are a few assets that your will may not be able to address.
This article in CNN Money describes three assets that could cause you to “unwittingly disinherit intended beneficiaries, including your children, from significant portions of your estate,” namely your 401(k) plan, your IRA account, and your life insurance.
You can name anybody you’d like as a beneficiary in your will or trust, but when it comes to 401(k) plans it’s your spouse who is entitled to the money when you die. “If you want to leave a 401(k) to someone else, your spouse must first file a written statement waiving rights to it.” Even a prenuptial agreement won’t help if you want to keep your 401(k) assets out of the communal pot, you’ll have to convince your spouse to sign a waiver after you’ve tied the knot. “A person can’t give up spousal rights to inherit a 401(k) until actually married. ‘A prenup by itself is not a valid waiver according to the rules governing 401(k) plans.’”
Who will inherit your IRA or your life insurance is a little easier to control than who will inherit your 401(k). In the case of IRA or life insurance accounts the person named as the beneficiary on the account will always take precedence over a beneficiary named in your will. The most common inheritance issues we see with these accounts is when people forget to update their beneficiary forms after a significant life change such as a divorce or the birth of a child. In these cases it’s important to review and update your beneficiaries every 2-5 years to ensure there’s no confusion between your will and the designated beneficiary on the account.
Having a will or trust is important, but they are only a piece of a whole plan—a plan that likely includes many pieces. Being aware of all the pieces of your estate plan, and keeping those pieces working together and in harmony, is essential to ensuring that your family and your legacy is protected.
The Estate Planning Post Every Woman Should Read
August 12, 2011
Although couples usually come into our office together to discuss their estate plans, quite often it’s the women who lead the discussion about planning for the guardianship of children, and the men who lead the discussion about financial planning.
Estate planning is a subject which has a significant impact on women—in fact, this article in Forbes suggests that estate planning may affect women even more than men because “Among Americans 65 and older, 42% of women, but just 14% of men are widowed. Women’s longer life expectancy, combined with their tendency to marry older mates and their lower lifetime earnings means they are far more likely to see their living standards compromised in retirement if proper estate planning isn’t done.”
How can women ensure that this doesn’t happen to them? The best answer is for women to be involved in the estate planning process—not just the issue of guardianship, but financial issues as well. Talk to your partner about what happens if (as is likely) your spouse passes away first leaving you a widow. Talk to your spouse and your family about how the remainder of your estate should be distributed upon your death. And don’t discuss the topic in vague terms, bring your estate planner or financial planner into the conversation and talk about cold, hard numbers.
Our firm understands that this is not the easiest conversation to begin. Talking about money in our culture has generally been considered a “dirty topic,” not to mention that nobody likes considering their own (or their spouse’s) mortality, but the consequences of avoiding the discussion can be disastrous.
If you’d like to start a conversation about estate planning with your family but aren’t quite sure how, the Forbes article mentioned above has quite a few excellent suggestions, including “start with current events or an anecdote about other people. Perhaps it’s a movie you saw, a book you read, a news report about someone your age who recently died or a sudden death in your community.” If you’re trying to bring up the subject with your parents as opposed to your spouse you may want to consider telling them “I just did my own estate plan. Don’t you think you should update yours?”
Alternatively, you may simply want to print out this blog post (or the Forbes article) bring it to your spouse/parent/children and read it together. Getting the conversation started is the hardest part, but it’s also the most important. If you can get the ball rolling, our firm can help with everything else.
After A Tempestuous Life Amy Winehouse Leaves Clear and Certain Will
August 8, 2011
Following the death of British singer Amy Winehouse there have been a number of news stories and blog posts about her turbulent career and the last few years of her life. In the midst of all this scrutiny, perhaps the most surprising discovery is the fact that Winehouse’s affairs were in incredibly good order, with a carefully crafted will leaving all of her sizeable estate to her parents and brother instead of to her incarcerated ex-husband.
This timely article in U.S. News and World Report remarks that “celebrities and non-celebrities alike often leave their estates in disarray when they die. That lack of awareness and planning can make death more stressful and more costly for family members as they struggle to quickly plan a funeral and think about dividing up family property while grieving.”
All too often our office is contacted by family members who are overwhelmed with the task of probating or administering a poorly planned estate. Sometimes these bereaved relatives are dealing with overwhelming and confusing debt, or terrible family infighting, but more often than not they are simply trying to make their way through the long and arduous process of probating an estate without the benefit of a will or trust.
One of the many things we can learn from the life and death of Amy Winehouse is that even in the midst of troubled times it is possible to think clearly about the future. If you’d like to start planning for your family’s future, please contact our office today.
War Veterans May Be Unaware They Qualify For VA Aid and Attendance Benefits
August 4, 2011
One of the services Elder Law and Estate Planning attorneys often provide is helping clients navigate the application procedures and bureaucratic systems for the various state and federal medical insurance programs; and one thing that remains a surprise throughout the years is how many people forget about the VA Aid and Attendance Program for war veterans.
According to the Department of Veterans Affairs website, VA Aid and Attendance is “a benefit paid to wartime veterans [or their spouses] who have limited or no income, and who are age 65 or older, or, if under 65, who are permanently and totally disabled.” Unfortunately, too many veterans and their spouses are unaware that they qualify for this benefit, or even worse, have never been informed that the program exists.
An informative article in the Washington Post quotes the VA’s deputy undersecretary for disability assistance as saying that he believes they are only reaching “about one in four eligible veterans.” Part of the reason for this is that “there are a lot of veterans where it’s been 40 years or more since they’ve been on active duty. It just doesn’t occur to them there may be a benefit from the VA.”
If you are a war veteran over the age of 65 it is very likely that you and/or your spouse qualify for Aid and Attendance Benefits. Eligibility requirements include:
- You served at least 90 days of active military service 1 day of which was during a war time period. (If you entered active duty after September 7, 1980, generally you must have served at least 24 months, or the full period for which called or ordered to active duty.)
- You were discharged from service under conditions other than dishonorable.
- Your countable family income — after subtracting care and medical expenses — is below a yearly limit set by law (The yearly limit on income is set by Congress.)
- You must need help with at least one activity of daily living: dressing, eating, walking, bathing, adjusting prosthetic devices or using the toilet. Those who are blind, living in nursing homes or require in-home care may also be eligible.
For many veterans and their families the financial assistance they receive from their VA Aid and Attendance benefits can be an incredible help. Unfortunately, the application process required to receive the benefits can be daunting. “It’s not a simple process. A&A applicants must mail the forms, copies of service records, marriage certificates, proof of insurance and medical records to the regional VA office. If a third party is making the application, an additional form, 21-22-a or 21-0845, must be completed.”
This is why many veterans ask a knowledgeable Elder Law or Estate Planning attorney to help with the application process. The right attorney can help you find and fill out the correct forms, gather the necessary records and materials, and keep track of progress throughout the entire process. If you think you may be eligible for VA Aid & Attendance Benefits, check out the information on VA Pension Benefits by clicking this link: VA Pension Benefits.