Aaron Charles Gregg

Why Not Have a Will?

“Out of sight, out of mind isn't just an everyday adage—it's one of the reasons why people 50 and over fail to write a will, update a previous one, or make other estate planning decisions.”

For one couple, this important task was set aside for more than four decades. They had a will created when their children were toddlers to name guardians and ensure financial security for the children, as described by Next Avenue in the article “6 Reasons You’re Putting Off Writing a Will and How to Overcome Them.”

This important task is all too easy to put off. However, it’s a big mistake to do so. Here’s why.

You think you’ve time to “get around to it.” However, the last few years have shown, we don’t know when illness will strike. A better approach: make an appointment to meet with an experienced estate planning attorney. Write it down on the calendar and don’t postpone it. There’s no guarantee you’ll live a long life, no matter how much we’d all like to.

You think you don’t have enough assets to bother with a will. Here’s the thing. An estate plan is not just about money. It also includes end-of-life planning, naming someone to have control of finances if you become incapacitated and can’t do so for yourself. It also includes giving someone the power to make healthcare decisions. A Power of Attorney, Healthcare Power of Attorney (or Proxy), and Living Will can prevent your loved ones from the expensive and time consuming process of having to go to court to be appointed a guardian or spend the rest of their lives wishing they’d known what you wanted.

You’d rather not think about your own mortality. Join the club. None of us wants to think about death, dying, or being seriously ill. However, if you wait until you’re too sick to deal with these issues, you may get care you don’t want, prolonged suffering when you wanted to be allowed to die, etc.

If you die without an estate plan in place, your children may be left fighting over everything: whether to sell the house, how to distribute assets fairly, who gets Dad’s license plate collection or Mom’s silver tea set. Some siblings never reconcile after spats over personal possessions.

You think it’ll take too much time. Unless you have a vast empire of real estate holdings, investments and millions, an estate plan and related documents do not take any more time than planning a vacation. After meeting with an experienced estate planning attorney to review your assets, discuss your wishes for the future and review your family situation, the documents can be sent back and forth via email until they are completed. Executing the documents will take another office visit, unless your state permits remote signatures, which many still do. It’s time well spent.

You don’t want to make hard decisions. Neither does anyone else. However, if you don’t, the state will, as your estate will be governed by the laws of your state. You may not like the distributions You can also make changes to your will and other estate planning documents. It’s on paper, not stone.

The final sticking point: you don’t want to pay for an estate plan. This is the problem you, your spouse and your children will run into. If you don’t have a proper estate plan created and the court decrees that your handwritten will is invalid, none of your wishes may be followed. Your family will end up paying more to retain an attorney to clean up the mess, and some of the problems they encounter may not be fixable.

Your loved ones won’t be grieving, they’ll be battling. The cost of not having an estate plan will come out of their inheritance.

The fix is easy. Call an experienced estate planning attorney, make an appointment and get started. You and your family will be better prepared for whatever life brings you. You’ll also enjoy the peace of mind of knowing that you’ve done the right thing for your loved ones.

Reference: Next Avenue (Feb. 25, 2022) “6 Reasons You’re Putting Off Writing a Will and How to Overcome Them.”

Does Your Will and Estate Planning Documents Need to Be Updated?

“It’s generally recommended that you review your will and other end-of-life documents at least every few years, although there can be reasons to do a checkup more often.”

It seems like a global pandemic would push people to get their estate plans in order, but more than half of American adults still do not have a will. For those who do, a recent article from CNBC advises “Be sure to keep your will or estate plan updated. Here are 3 key reasons why.” As for those who don’t have a will or an estate plan, the time to get this done is now.

We may think of an estate plan as end-of-life documents, but many estate planning documents are used while you are living. Having them updated protects you and your family. Certain trigger events, like birth, marriage, divorce, death, adoption of a child, inheritance or moving to another state, should all be followed by a review of your estate plan.

Your will and estate plan reflects the people in your life, and like it or not, relationships change. Your executor is the person you name to carry out the directions in your will. Are you still close with the person you picked five, ten or twenty years ago? Are they able to serve, or have they died? The executor has a big job of liquidating assets, making sure beneficiaries receive inheritances and even selling your primary residence. Are they still the right person for the job?

Guardians named when children were born also need to be updated. First, if your adorable babies are now adolescents, does the same person still want to be their guardian? If you named their grandmother when the kids were little, could she handle teenaged turbulence? Do not forget to name a second and even a third alternative guardian. If the primary guardian does not want to or cannot serve, a backup guardian could be the difference between a loving, familiar home, and foster care.

Other documents your estate planning attorney can review with you include Power of Attorney and Healthcare Proxy. Maybe your favorite brother-in-law has divorced your sister and you do not want him anywhere near your financial affairs, if you become incapacitated. You need to review and update these documents.

The same person does not have to serve in multiple roles. The person you chose to be your Healthcare Proxy does not have to also handle your financial life. Review both of these choices.

Reviewing and updating beneficiary designations are often the source of great frustration for families. A life insurance policy purchased twenty years ago likely names a spouse as the beneficiary. Are you still married to the same person? Review investment accounts to be sure the beneficiary is still the person who you want to receive assets upon your death.

Beneficiary designations are distributed outside of probate estate, directly to the beneficiaries, by way of the contract between you and the financial institution. Whoever is the beneficiary on the document gets the assets—regardless of what changes may have occurred in your life.

Certain pensions and retirement accounts require current spouses to be the beneficiary, unless they sign legal documents disclaiming their rights.

If you have failed to designate a beneficiary on accounts with this option, or if the named person has died and there is no contingent beneficiary, the assets will go into your probate estate.

Even if your life has not changed, which is unlikely, there have been many big changes in tax laws. You may miss out on opportunities, another reason for a review with your estate planning attorney.

Reference: CNBC (Jan. 27, 2022) “Be sure to keep your will or estate plan updated. Here are 3 key reasons why”

What Is the HEMS Standard?

“The ‘HEMS’ (health, education, maintenance, support) standard in estate planning is used to guide trustees in how/when they should release funds to a beneficiary.”

The HEMS standard is used to inform trustees as to how and when funds should be released to a beneficiary, according to a recent article from Yahoo! News, “What is the HEMS Standard in Estate Planning.” Using HEMS language in a trust gives the trustee more control over how assets are distributed and spent. If a beneficiary is young and not financial savvy, this becomes extremely important to protecting both the beneficiary and the assets in the trust. Your estate planning attorney can set up a trust to include this feature.

When a trust includes HEMS language, the assets may only be used for specific needs. Health, education or living expenses can include college tuition, mortgage, and rent payments, medical care and health insurance premiums.

Medical treatment may include eye exams, dental care, health insurance, prescription drugs and some elective procedures.

Education may include college housing, tuition, technology needed for college, studying abroad and career training.

Maintenance and Support includes reasonable comforts, like paying for a gym membership, vacations and gifts for family members.

The HEMS language provides guidance for the trustee. However, ultimately the trustee is vested with the discretionary power to decide whether the assets are being used according to the directions of the trust.

Sometimes beneficiary requests are straightforward, like college tuition or health insurance bills. However, maintenance and support need to be considered in the context of the family’s wealth. If the family and the beneficiary are used to a lifestyle that includes three or four luxurious vacations every year, a request for funds used for a ski trip to Spain may not be out of line. For another family and trust, this would be a ludicrous request.

Having HEMS language in the trust limits distribution. It has greater value, if the trustee is also a beneficiary, lessening the chances of the trust diminishing for non-essentials or to fund a lavish lifestyle.

Giving the trustee HEMS language narrows their discretionary authority enough to help them do a better job of managing assets and may limit challenges by beneficiaries.

HEMS language can be as broad or narrow as the grantor wishes. Just as a trust is crafted to meet the specific directions of the grantor for beneficiaries, the HEMS language can be created to establish a trust where the assets may only be used to pay for college tuition or career training.

Reference: Yahoo! News (Jan. 7, 2022) “What is the HEMS Standard in Estate Planning”

How Important Is a Power of Attorney?

With a Power of Attorney, you designate which individuals are in control of your assets and who can take care of your affairs, if you are unable to do so.

People are often surprised to learn a power of attorney is one of the most urgently needed estate planning documents to have, with a last will and health care proxy close behind in order of importance. Everyone over age 18 should have these documents, explains a recent article titled “The dangers of not having a power of attorney” from the Rome Sentinel. The reason is simple: if you have a short- or long-term health problem and can’t manage your own assets or even medical decisions and haven’t given anyone the ability to do so, you may spend your rehabilitation period dealing with an easily avoidable nightmare.

Here are other problems that may result from not having your incapacity legal planning in place:

A guardianship proceeding might be needed. If you are incapacitated without this planning, loved ones may have to petition the court to apply for guardianship so they can make fundamental decisions for you. Even if you are married, your spouse is not automatically empowered to manage your financial affairs, except perhaps for assets that are jointly owned. It can take months to obtain guardianship and costs far more than the legal documents in the first place. If there are family issues, guardianship might lead to litigation and family fights.

The cost of not being able to pay bills in a timely manner adds up quickly. The world keeps moving while you are incapacitated. Mortgage payments and car loans need to be paid, as do utilities and healthcare bills. Lapses of insurance for your home, auto or life, could turn a health crisis into a financial crisis, if no one can act on your behalf.

Nursing home bills and Medicaid eligibility denials. Even one month of paying for a nursing home out of pocket, when you would otherwise qualify for Medicaid, could take a large bite out of savings. The Medicaid application process requires a responsible person to gather a lot of medical records, sign numerous documents and follow through with the appropriate government authorities.

Getting medical records in a HIPAA world. Your power of attorney should include an authorization for your representative to take care of all health care billing and payments and to access your medical records. If a spouse or family member is denied access to review records, your treatment and care may suffer. If your health crisis is the result of an accident or medical malpractice, this could jeopardize your defense.

Transferring assets. It may be necessary to transfer assets, like a home, or other assets, out of your immediate control. You may be in a final stage of life. As a result, transferring assets while you are still living will avoid costly and time-consuming probate proceedings. If a power of attorney is up to date and includes a fully executed “Statutory Gift” authorization, your loved ones will be able to manage your assets for the best possible outcome.

The power of attorney is a uniquely flexible estate planning document. It can be broad and permit someone you trust to manage all of your financial and legal matters, or it can be narrow in scope. Your estate planning attorney will be able to craft an appropriate power of attorney that is best suited for your needs and family. The most important thing: don’t delay having a new or updated power of attorney created. If you have a power of attorney, but it was created more than four or five years ago, it may not be recognized by financial institutions.

Reference: Rome Sentinel (July 25, 2021) “The dangers of not having a power of attorney”

Powers of Attorney and Advance Directives

“Some people think that, because their assets are jointly owned with a spouse or are in a trust, they do not need a Power of Attorney, or that if they become incapacitated, their spouse automatically has the authority to make medical decisions on their behalf.”

A medical crisis only gets worse, when you learn you don’t have legal authority to make medical decisions for a loved one, or find out after a loved one is incapacitated that you can’t gain access to assets in their trust. You need to have certain estate planning legal documents already in place, according to the article “Tips you should know for Powers of Attorney and Advance Directives” from seacoastonline.com.

Power of Attorney. The power of attorney (POA) allows one person, the “principal” to appoint another person as their “agent” (also known as an “attorney in fact”). The agent has the authority to act on behalf of the principal, depending on the powers described in the document. Each state has its own laws about who can be an agent, if more than one person can be appointed as agent and if there are any limits to what power can be given to an agent. Your estate planning attorney will be able to create a POA to suit your situation.

A POA can be created to give extremely broad powers to an agent. This is sometimes called a “general” POA, where agents can do everything that you would do, from accessing and managing bank accounts, applying for Social Security, to filing tax returns. A POA can also be limited in scope, known as “limited” POA. You could permit an agent to only sign a tax return or conduct a specific transaction.

In most estate planning scenarios, the POA is “durable,” meaning the named agent can continue to have authority to act, even if the principal is incapacitated after the documents have been executed. This makes sense: a durable POA generally avoids having to go to court and have a guardian appointed. The person you have selected will be the POA, not a court-appointed person.

Advance Directive. The advance directive allows a person to appoint another person to make medical decisions on their behalf if incapacitated. In some states, this is called a durable power of attorney for health care, and in others it is referred to as a health care proxy.

In most cases, the advance directive becomes effective when one or more treating physicians determine the person no longer has capacity to make or communicate health care decisions. Having this document in place avoids having to go to court to have a guardian appointed. If time is of the essence, any delay in decision-making could lead to a poor outcome. If there is no advance directive and physicians have decided you are unable to make these decisions, they go by a hierarchy of relatives to make the decisions for you. If you have an estranged adult child, for instance, but they are your next-of-kin, they could be the one making decisions for you.

If you have children who recently became legal adults (usually age 18), these documents will protect them as well, since just being their parent does not provide you with the right to make these decisions.

Reference: Seacoastonline.com (June 27, 2021) “Tips you should know for Powers of Attorney and Advance Directives”

Estate Planning Documents for a Natural Ending

 

“You know that you can always refuse life-sustaining medical treatment. The tricky part comes when you are no longer able to understand your options or communicate your wishes to the health care professionals.”

If you want to control your demise, there are a handful of documents that are typically created during the process of developing an estate plan that can be used to achieve this goal, says the article “Choosing a natural end” from The Dallas Morning News.

The four documents are the Medical Power of Attorney, the Directive to Physicians, the Out-of-Hospital Do-Not-Resuscitate, and the In-Hospital Do-Not-Resuscitate. Note that every state has slightly different estate planning laws. Therefore, you will want to speak with an experienced estate planning attorney in your state. If you spend a lot of time in another state, you may need to have a duplicate set of documents created. Your estate planning attorney will be able to help.

For the Medical Power of Attorney, you are appointing an agent to make health care decisions, if you cannot. This may include turning off any life-support systems and refusing life-sustaining treatment. Talk with the person you want to take on this role and make sure they understand your wishes and are willing and able to carry them out.

You have the right to change your agent at any time.

The Directive to Physicians is a way for you to let physicians know what you want for comfort care and any life-sustaining treatment in the event you receive a diagnosis of a terminal or irreversible health condition. You aren’t required to have this, but it is a good way to convey your wishes. The directive does not always have to be the one created by the facility where you are being treated, and it may be customized to your wishes, as long as they are within the bounds of law. Many people will execute a basic directive with their estate planning documents, and then have a more detailed directive created when they have a health crisis.

The Do-Not-Resuscitate (DNR) forms come in two different forms in most states. Unlike the Directive to Physicians, the DNR must be signed by your attending physician. The Out-of-Hospital DNR is a legally binding order that documents your wishes to health care professionals acting outside of a hospital setting not to initiate or continue CPR, advanced airway management, artificial ventilation, defibrillation or transcutaneous cardiac pacing. You need to sign this form, but if you are not competent to do so, a proxy or health care agent can sign it.

The In-Hospital DNR instructs a health care professional not to attempt CPR, if your breathing or heart stops. It is issued in a health care facility or hospital and does not require your signature. However, the physician does have to inform you or make a good faith effort to inform a proxy or agent of the order.

If you would prefer not to spend your final days or hours hooked up to medical machinery, speak with your estate planning attorney about how to legally prepare to protect your wishes.

Reference: The Dallas Morning News (Jan. 12, 2020) “Choosing a natural end”

Five Estate Planning Mistakes to Avoid

“Five of the most common mistakes are easy to avoid with the right information and support, as well as a little creativity.”

While it’s true that no estate is completely bulletproof, there are mistakes that people make that are big enough to walk through, while others are more like a slow drip, draining retirement finances in a slow but steady process. There are mistakes that can be easily avoided, reports Comstock Magazine in the article “Five Mistakes to Avoid When Planning Your Estate.”

1. Misunderstanding Estate Law. Some people are so thrown by the idea of an estate plan, that they can’t get past the word “estate.” You don’t need a mansion to have an estate. The term is actually used to refer to any and all property that a person owns. Even modest people need a plan to help beneficiaries avoid unnecessary costs and stress. Talk with an estate planning attorney to learn what your needs are, from a will to trusts. Make sure that this is the attorney’s key practice area. A real estate or personal injury attorney won’t have the same knowledge and experience.

2. Getting Bad Advice. It takes a team to create a strong estate plan. That means an estate planning attorney, a financial advisor and an accountant. Be wary of firms that focus entirely on selling trusts. There’s definitely a role for trusts in estate plans, but there are many other tools that are needed. Buying an insurance policy or an annuity is not an estate plan.

3. Naming Yourself as a Sole Trustee. Naming yourself as a sole trustee puts you and your estate in a precarious position. What if you develop Alzheimer’s or are injured in an accident? A trusted individual, a family member, a longstanding friend or even a professional trustee, needs to be named to protect your interests, if you should become incapacitated.

4. Losing Track of Assets. Without a complete list of all assets, it’s nearly impossible for someone to know what you own and who your heirs may be. Some assets, including retirement funds, life insurance policies, or investment accounts, have named beneficiaries. Those people will inherit these assets, regardless of what is in your will. If your heirs can’t find the assets, they may be lost. If you don’t update your beneficiaries, they may go to unintended heirs—like ex-spouses.

5. Deciding on Options Without Being Fully Informed. When it comes to estate planning, the natural tendency is to go with what we think is the right thing. However, unless you are an estate planning attorney, chances are you don’t know what the right thing is. For tax reasons, for instance, it may make sense to transfer assets, while you are still living. However, that might also be a terrible idea, if you choose the wrong person to hold your assets or don’t put them in the right kind of trust.

Estate planning is still a highly personal process that depends upon every person’s unique experience. Your family situation is different than anyone else’s. An experienced estate planning attorney will be able to create a plan and help you to avoid the big, most commonly made mistakes.

Reference: Comstock Magazine (Dec. 2019) “Five Mistakes to Avoid When Planning Your Estate”

Preparing for the Inevitable: The Loss of a Spouse

“According to the U.S. Census Bureau, the average age of widowhood in the United States is a surprisingly young 59.”

Becoming a widow at a relatively young age, puts many people in a tough financial position, says the article “Preparing for the Unexpected Death of a Spouse” from Next Avenue. At this point in their lives, they are too young to draw Social Security benefits. There is no best time, but this is a hard time to lose the prime breadwinner in the household.

Women are more likely than men to lose a spouse, and they are typically left in a worse financial position than if their spouse dies before they are old enough to take retirement benefits.

One of the best ways to plan for this event, is for both spouses to have life insurance. This can replace income, and term life insurance, if purchased early in life, can be relatively affordable. The earlier a policy is purchased, the better. This can become a safety net to pay bills and maintain a lifestyle.

Another key component for surviving early widowhood, is being sure that both members of the couple understand the couple’s finances, including how household bills are paid. Usually what happens is that one person takes over the finances, and the other is left hoping that things are being done properly. That also includes knowing the accounts, the log in and password information and what bills need to be paid at what dates.

Having that conversation with a spouse is not easy, but necessary. There are costs that you may not be aware of, without a thorough knowledge of how the household works. For instance, if the husband has done all of the repairs around the house, maintaining the yard and taking care of the cars, those tasks still need to be done. Either the widow will become proficient or will have to pay others.

Couples should work with an estate planning attorney and a financial advisor, as well as an accountant, to be sure that they are prepared for the unexpected. What survivor’s benefits might the surviving spouse be eligible to receive? If there are children at home age 16 or under, there may be Social Security benefits available for the child’s support.

Discuss what debt, if any, either spouse has taken on without the other’s knowledge. Any outstanding medical bills should also be discussed. The last thing a loved one should have to cope with when a spouse passes, is a tangle of debt. However, this often happens.

If the spouse was a veteran, the surviving spouse might be eligible for benefits from the Veterans Administration. Find out what information will be needed to apply for benefits.
Talk with your estate planning attorney to make sure that all proper documents have been prepared. This includes a last will and testament, power of attorney, health care proxy and any trusts.

Reference: Next Avenue (Dec. 18, 2019) “Preparing for the Unexpected Death of a Spouse”

What Estate Planning Documents Does My Child Need Now That They’re 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”

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?”