Don’t Add Your Child as a Joint Owner on Your Bank Account
May 22, 2009
So many clients tell me that they want to add a child to their bank account so that the child can help them pay bills and manage their finances, and also so someone will have access to the bank account should anything happen to the parent. I agree – but I don’t agree with the bank’s usual approach which is to just name a child as joint owner and send the customer on her way.
Naming a child as a joint owner is dangerous. A joint owner has complete rights to the full amount of money in that account. If your daughter wants to withdraw it all, move to Aruba, and never speak to you again, she is well within her rights to do so – the bank can’t stop her. If she gets divorced, gets in a car accident, makes a bad business deal – that money is on the table and you had better believe the opposing attorney will chase after it. “Not fair,” you cry. Technically, there are laws to deal with these scenarios, but it is much easier to avoid them to begin with.
Don’t let the bank tell you to name a joint owner. Instead, patiently explain your two goals: (1) someone should be able to help with your account while you are living, and (2) someone should have access to the account after your passing (ex. to pay final bills or for a funeral). To accomplish the first, the bank can add your child under a Durable Power of Attorney. I acted as Power of Attorney for a client who had no family, and his checks were printed: “George Clooney, Alexis Levitt, IFF.” I was on the account, but clearly as a Power of Attorney and not a joint owner.
As for the second goal of allowing access to the account after your passing, there are several ways to do this. Some banks list a “beneficiary,” others use “payable on death to,” some use “in trust for.” Note that if you name someone as Power of Attorney, their authority ends at your passing, so you need this second category listed on your account, as well. (And this has the added bonus of allowing this account to pass to a beneficiary without going through probate.)
This will take persistence on your part, and you may have to insist on working with a manager. Most customer service folks at the banks only know to offer you the option of joint ownership.
Putting Assets in Joint Names to Avoid Probate – Will It Work?
May 21, 2009
Lots of people want to avoid probate. That’s the court process that a family must go through to distribute anything that was in the decedent’s name alone upon her passing. Despite its bad reputation, probate isn’t the end of the world. Yes, it’s a hassle, and yes, there are hoops to go through, but you can hire an attorney to do most of the work for you.
If you still want your family to avoid probate, many people opt to make all of their property into “nonprobate” assets. This is anything that has someone else’s name on it in addition to yours at your passing. For example, many people purchase homes together with the spouse. We name beneciaries on life insurance policies and IRA’s. So why not just put someone else’s name on all of your assets and be done with it?
Because that quite likely will not result in the distribution that you would like. Let’s say Ophelia has an IRA valued at $100,000 and a life insurance policy with a death benefit of $100,000. She puts her son’s name on the IRA and her daughter on the life insurance. Easy, right? Not really. Her health care needs increase over the years and she taps into the IRA. By the time she passes away, her son inherits an IRA worth $50,000 and her daughter cashes in the life insurance policy for the full $100,000.
The best way to make sure people will inherit as you would like, while also helping them to avoid probate, is to work with an elder law attorney who can draw up the appropriate trust (if that is the right solution for you), help you properly list beneficiaries on your assets, and match you up with a qualified financial advisor who can make sure there will be enough in your estate to treat all the beneficiaries in the way you would like.
See tomorrow’s post on why it is dangerous to list a child as a joint owner of a bank account.
Do You Really Need a Will?
May 20, 2009
If you want to have a say in who gets your possessions after you die, then yes. If not, then the “laws of intestacy” govern what happens to an estate when a person dies without a Will.
A typical scenario is one parent dies leaving his spouse and children. Without a Will, anything that was in his name alone at his passing is divided equally – one half to his wife, one half split evenly among his children. Most people would prefer to leave all of their assets to their spouse, and then after the spouse dies, to the children. If that is what you prefer, then you need a Will.
What happens if you don’t have a spouse, but you do have children? Without a Will, anything in your name alone at your passing goes to your children, divided equally among them. Generally speaking, this is what most people want. But if you have a disabled child or grandchild, this scheme will cause problems.
If you have a spouse and no children? The spouse gets it all. Again, probably what most people would want under this scenario. But if, for example, there are certain possessions you would like to leave to a friend or niece or nephew, or if you want to make a gift to charity, then you need a Will.
And if you are a single person – no spouse and no children? It goes to your parents, and if they are no longer living, to your siblings. If your parents are using public benefits to provide healthcare (ex. nursing home), then a direct inheritance from you could upset the apple cart.
Remember that all of the above applies only to “probate property” - that is, anything that has only your name on it. “Nonprobate property” has your name plus another, for example, naming someone as a beneficiary on your IRA or life insurance, or purchasing a home jointly (usually with your spouse). Nonprobate property passes right to the person you have named.
So if you think that the laws of intestacy will achieve your goals, then you probably don’t need a Will. But if you have any particular gifts you want to make, and especially if you have any disabled family members, then you need a Will.
HBO’s The Alzheimer’s Project: Grandpa, Do You Know Who I Am?
May 19, 2009
This weekend I watched the film on grandchildren caring for grandparents with Alzheimer’s. I was floored by the patience and persistence these kids displayed.
One theme that the film highlighted with “staying in the moment.” This is something we all did as kids (remember focusing on a ladybug crawling up a blade of grass for minutes at a time, oblivious to anything else in the world?), but we lose as we mature. Turns out we end up back there towards the end of life.
Spending time with an Alzheimer’s patient sometimes means playing cards or other games, discussing what they see out the window at that moment – and not discussing what happened this morning or what you will be doing tonight.
This also touches on the theme of “fiblets” – the notion that you cannot change the reality of an Alzheimer’s patient, so you go with their reality instead. They are in their moment – go and join them there. My favorite Alzheimer’s coach, Beverly Moore, tells this story: It is about 3 p.m., and a woman she is working with is convinced that Johnny should be coming off the school bus any minute. There is no way to convince her that she is 85 and her little boy is a 60 year-old accomplished engineer. Instead, Beverly agrees and steers her into the kitchen to make tea while they “wait for the bus.”
It is a shift in the way we are used to interacting with people, but if you can force yourself to return to your childhood habits and “stay in the moment” you can turn what could have been a frustrating experience into some joyful time spent with your loved one.
HBO’s The Alzheimer’s Project: Caregivers
May 18, 2009
This weekend I watched the film Caregivers (don’t you just love On Demand?). One theme that jumped out was the isolation that caregivers suffer. Several of the film’s stars (I think that’s a good name for them) talked about how very quietly the invitations to events and gatherings stopped. Not only does this damage the patient, but even more so the caregiver who needs more than ever to maintain her connections to the world.
This happens with families with special needs children, as well. They lose their friends and even family as their child grows past the infant years.
It all comes down to lack of knowledge. Very few, if any, of us innately know how to interact with a person with mental deficits or behavioral issues. The good thing is, it’s not too hard to learn.
If you have a friend, neighbor, or family member who is caring for an individual with Alzheimer’s, another form of dementia, behavioral issues, mental retardation, Turret’s Syndrome, or any other type of disability that affects the mind, please – don’t shy away from them – they need you in their life. Just ask your friend – “I would love to spend the afternoon with you, please tell me what to expect from Vanessa, and please give me some tips on how to interact with her.” There are also so many books and websites devoted to various special needs and highlighting skills for interacting with the special needs person.
And if you are the caregiver and you have noticed that your friends and family invite you out less frequently – call them up, explain that you understand why they have backed off, and then ask if you could describe a few tips for how to spend time with your loved one.
All it takes is a little bit of knowledge, patience, and a willingness to try something new.
ARTZ is Artists for Alzheimer’s
May 13, 2009
A ground-breaking group of artists has put together training for museum staff to allow them to host small groups of people with Alzheimer’s along with their families and care partners. Research shows that people with AD can tap into long-held memories through an art medium. Spending time with, or, creating art, can bring emotions to the surface that the individual has not otherwise been able to convey. Working with art can even help reduce some of the negative psycho-behavioral symptoms that can accompany AD.
Through a grant from the McCance Family Foundation, ARTZ will be conducting programs at Eastern Massachusetts museums on Tuesdays throughout the spring and summer. Check out the schedule here.
So get out, enjoy some art, and see a new side to your loved one!
HBO’s The Alzheimer’s Project
May 12, 2009
Have you been watching this series? So far I’ve only been able to catch the film on scientific research. They are describing all sorts of research and discoveries occurring in the field, all exciting and cutting-edge stuff. The field is so young, and there is such an abundance of research activity testing a range of theories. And the whole time I’m watching, I am thinking that five years from now people will watch this in reruns and laugh at how primitive it all was. I expect that our research will bring us to a very different place in short order.
I’m looking forward to watching the film on caregivers. You can stream each of the films at The Alzheimer’s Project website. You can also see them on Comcast’s On Demand.
Why Should My Elder Law Attorney Draft My Health Care Proxy? I Have the Form from the Hospital.
May 10, 2009
Massachusetts hospitals hand patients a two-page Health Care Proxy form that was developed in 1999 and does not accommodate for changes in the law since then or for issues pertinent to elders.
You probably have signed a “HIPAA” form by now at your doctor’s office. This form allows the doctor’s office to share your confidential information with anyone in particular you name, such as your spouse or children – while you are competent. (The Health Care Proxy kicks in when you cannot make or communicate your own decisions.) Without this form in place, your medical team is well within its rights to refuse to discuss your case with your family. Many elders like to know that the doctor will speak with their child later in the day to review the results of the appointment. A well drafted Health Care Proxy with your Elder Law Attorney will enable this. The state form does not.
The hospital form can also lead to expensive guardianship proceedings, because it lacks several important items. It does not allow the person you have named to authorize anti-psychotic medications, which can be critical to an elder with dementia, depression, or anxiety, or a combination of all three. It does not allow the agent to sign for a nursing home admission, nor to permit extraordinary measures (ex. feeding tube). If you have only the state form and you need any of these actions later, your family will have to commence a lengthy and time-consuming guardianship process.
Contact your elder law attorney today and ask to draft a new Health Care Proxy form and save your family considerable expense and headache later.
Home Modification Loans Available at 0% to 3% Interest
May 5, 2009
Many elders and disabled folks are doing well living at home, but their house needs some modification to make life a little easier. Maybe it’s building a wheelchair ramp to the front door, widening doorways, modifying the kitchen and bathroom, or installing a lift. Whatever it might be, the state is providing very low- or no-cost loans to homeowners and to landlords of small buildings (under 10 units).
Loans are for up to $30,000 and are based on very generous income guidelines. For example, a two-person household with an annual income of up to $72,200 qualify for the 0% loans, and couples with incomes up to $144,400 qualify for the 3% loans. The 0% loans are repaid when the house is later sold, and the 3% loans are paid back on a monthly basis within 5 – 10 years of the time the loan is made.
This is a great opportunity to make those one or two modifications to your home that would make it much easier to remain there longer.
For full details, see the Home Loan Modification Program’s website, or for South Shore residents, call Mary Ann Walsh at the South Middlesex Opportunity Council, 508.202.5919.
It Just Got More Expensive to Ignore Your Estate Planning in Massachusetts
May 3, 2009
As part of your estate planning work, your attorney will prepare a Durable Power of Attorney and Health Care Proxy. These documents are critical to allow another person whom you appoint to legally care for you when you are unable to manage your own affairs, for example, if you are in a car accident, develop dementia, or are having a rough patch after a surgery.
What happens if you don’t sign these documents when you are able to and later need someone to act for you? Your family will need to go to court and pursue a guardianship, which is an involved court proceeding. When everything goes smoothly, this can take several weeks, usually requires hiring a lawyer, and then there are annual reports that your agent must make to the court. All this is paid for out of your bank account, and it can easily add up to thousands of dollars.
Starting on July 1, 2009, the Massachusetts guardianship process will be even more involved and more expensive. The legislature added several components which will do a much better job at upholding the due process rights of the public than our existing laws. Doctors will have to complete lengthy, detailed reports attesting to the fact that the patient cannot manage her own affairs – these reports are not covered by health insurance. Lawyers will need to draft documents that are much more detailed pleadings concerning the incapacitated person’s need for assistance. And the lawyer and the family together will need to draw up a detailed plan for the person’s care complete with milestones and goals. Annually, the family will need to write and file with the court a report specifically detailing the incapacitated person’s living situation, health status, and finances, and consider whether the person has improved so that perhaps the guardianship is no longer needed.
All of this will cost a lot of money and take up a good deal of time. Instead, you can today plan to meet with your elder law attorney and for only a few hundred dollars, write and sign a Durable Power of Attorney and Health Care Proxy. It’s that simple.