How Not to Sign Documents for Your Parents

September 20, 2018

Filed under: Caregiver Issues,Estate Planning,Uncategorized — Alexis @ 1:43 PM

Very often, adult children find themselves in the position of signing documents on behalf of their parents.  This could take the form of signing a parent into a hospital or nursing home, signing a Medicare notice, signing the lease at an assisted living, etc.

When signing documents for a parent, do not sign just your own name.  On most documents, that makes you the financially responsible party!

ALWAYS sign this way: your name, comma, your role.

For example: “Alexis Levitt, POA for Cpt. Jack Sparrow” or “Alexis Levitt, POA” or “Alexis Levitt, HCP”, etc.

Signing your own name can open you personally to unwanted liabilities.  Always remember that you are not signing as yourself, but as an assistant to your parent.

Should I Have a Trust?

Filed under: Estate Planning,Financial,Special Needs Trusts — Alexis @ 1:40 PM

I hear this question a lot when I teach seminars.  If you’ve been to a seminar, you have heard me say that “trusts come in many flavors.”  There are all sorts of trusts, and whether you should have one depends entirely on your situation.  I would say that about one-third of my clients need some type of trust.  And for the other two-thirds, the cost simply isn’t warranted.

Here are some reasons you might need one:

(1) you have a special needs child or grandchild or sibling that you want to leave money to,

(2) you want your family to avoid probate,

(3) you have a complex distribution pattern that you want followed after your death, or

(4) you have over $1 million in assets and you want to do estate tax planning.

Here are some reasons you might not need one:

(1) you don’t have a special needs child, grandchild, or sibling,

(2) you don’t have a taxable estate (or you do but don’t mind paying taxes), or

(3) your assets are fairly simple and you’ve named beneficiaries on each of them.

These two lists are by no means exhaustive, they just show you some typical scenarios.  The only way to really know whether you need a trust is to meet with an elder law attorney who can review your assets, your family tree, and your wishes, and from there determine what the best course of action will be to transfer those assets to your family after your death, with the least amount of trouble.

Please call us so that we can help you determine whether or not you need a trust, and to make the inheritance process as easy as possible for your family.

 

 

Last Week Tonight’s John Oliver Has Something to Say About Guardianships

September 10, 2018

Filed under: Caregiver Issues,Elder Abuse,Estate Planning — Alexis @ 1:14 PM

Have you seen his piece on guardianship?  It’s scary, they are extreme though not rare examples that he uses, and being John Oliver, the bit has its funny moments too.

As one of the spotlights, he tells the story of a couple who were put under guardianship, even though they perhaps were still competent (they certainly appear to be in the video), and then their guardian financially abused her power and basically ignored the couple’s everyday needs.  The couple ended up trapped in an assisted living and couldn’t get out, even though they had the mental and financial ability to leave, because a court had stripped them of the right to make their own decisions and manage their own money.  How did that happen?  He doesn’t give the back story, but in all likelihood, either they weren’t presenting well or they were difficult residents, so whomever was having a tough time with them is probably who brought the guardianship case to court, and a judge, assuming that all was in order, approved it.

Bottom line?  Don’t leave yourself in a position of ever needing a guardian!  In Massachusetts, we have two types of court-appointed fiduciaries:  a “guardian” handles your health care decisions, and a “conservator” manages your assets and finances.  (In the video, John Oliver refers to both of these as “guardians.”)  Why would a court appoint a guardian and/or conservator?  The vast majority of the time, it is because someone has become incompetent (typically due to dementia) AND never signed a durable power of attorney and health care proxy.

In a durable power of attorney, you name someone who you trust to handle your finances for you, should you reach a point where you are unable to do so.   (Technically, the POA springs to life immediately, but most agents understand not to use it until you need them to.)  In a health care proxy, you name someone who you trust to manage your health care if you reach a point where you can’t make or communicate your own health care decisions.  (The HCP springs to life only once a doctor certifies that you have reached that point.)

In both cases, the key is to name someone who you trust, and to name alternates as well.  If you don’t name alternates, and if your primary agent can’t serve when you need them to, then you are back in John Oliver’s video, where, should you become incompetent, or in some cases, if you are competent but a troublemaker, someone will go to court to have a guardian and conservator named over you.

If you would like help creating your durable power of attorney and health care proxy, please give us a call.

Elder Care Workshop Series at Norwell Public Library

March 7, 2017

 

Getting older? Taking care of someone who is? Come to this three-part series to learn some helpful tips from local Elder Services professionals.

Wednesday, March 8:

“Who Can Help Me?”

Find out how to access elder services in your community.

Presented by Susan Curtin, Director at Norwell Council on Aging.

 

“Elder Law 101”

Get to know the basics of preparing for your future.

Presented by Attorney Alexis B. Levitt.

 

Wednesday, March 15:

“Learn to Speak Alzheimereze”

Discover tips to work with a person who is changing before your eyes and to learn to speak ‘Alzheimereze.’

Presented by Alzheimer’s coach Beverly Moore.

 

Wednesday, March 29: 

“Hospital to Home”

Understand how to make a successful transition from hospital to home.

Presented by Kim Bennett, LSW, of Visiting Angels, Inc.

 

“Do I Need Palliative or Hospice Care?”

Learn about the difference in important care choices.

Presented by Catherine Harrington, BA, RN, of Norwell VNA and Hospice.

 

***Workshops will be held at the Norwell Public Library from 6:00 – 7:30 p.m. Registration is requested, but not required via email at Doreen@alexislevitt.com or calling 781.740.7269.

 

This series is sponsored by the Law Office of Alexis B. Levitt, the Norwell Council on Aging, and the Norwell Public Library.

 

 

 

Life Estate Deeds – An Antique Technique Providing Modern Convenience

October 16, 2014

Filed under: Estate Planning,Financial,Uncategorized — Tags: , — Alexis @ 9:30 AM

When we pass away, our assets are divided into two groups – probate and non-probate. Non-probate assets are things like bank accounts and life insurance policies that you have named joint owners or TODs on – they transfer to the named beneficiaries upon your death without any court involvement. Probate assets are held only in your name. The court looks to your will, or the intestacy statute, if there isn’t a will, to determine who receives these assets. This can be a lengthy, and potentially costly, process.

 

One way to make your home a non-probate asset is to create a life estate. This concept was borrowed from old English property law. You, as the owner of the home, deed the home to yourself for life (making you the “life tenant”) and then to another person(s) known as the “remainderman” (most often your children). Upon your passing, the remaindermen immediately become the owners of the home (they just need to file a copy of your death certificate with the Registry of Deeds).

 

Creating a life estate has many benefits. First, upon your passing, your home transfers seamlessly to the remaindermen without any court involvement. Second, you are guaranteed the right to remain in your home for the rest of your lifetime – you cannot be compelled to sell or move out. Next, after your passing, the remaindermen receive a step-up basis for capital gains purposes, minimizing the capital gains tax due should they decide to sell the property after your death. Fourth, because the remaindermen have no ownership interest in the home until after your death, their creditors (in the event of a bankruptcy or divorce, for example) cannot access the equity in the home during your lifetime. Lastly, the entire value of the home can be protected from your nursing home costs so long as the life estate is created at least five years before you ask MassHealth for assistance in paying for nursing home care (more on this below).

 

Creating a life estate, however, has its potential pitfalls. First, the remaindermen must all sign off if you decide you want to mortgage, reverse mortgage or sell the property. The thought of giving up so much control can be frightening for many homeowners. (It’s worthwhile to note that your remaindermen should have their own powers of attorney in place, in the event you need their approval and they are out of the country, in the hospital, or otherwise incapacitated.)

 

Also, if you need to ask the state for assistance in paying for nursing home care in the five years following the creation of a life estate, you could be disqualified for a period of time. MassHealth uses a formula to calculate the “value” of your life estate based on your life expectancy and the value of the home. The disqualification can also be cured if the remaindermen agree to deed the property back to the life tenant outright, destroying the life estate. If it’s likely that you’ll be asking MassHealth to help pay for your nursing home care in the next five years, then you should meet with an elder law attorney to explore other options to protect the value of your home to the greatest extent possible.

 

A life estate deed can be a valuable addition to your estate plan. If you’re interested in learning more about life estates and whether this might be the right solution for you, call our office to schedule a planning session.

Beware of the Binding Arbitration Agreement in the Nursing Home Admission Packet

February 18, 2014

Filed under: Estate Planning,Financial,Health Care Facilities — Alexis @ 9:50 AM

Imagine that you’re being admitted into a nursing home.  You are having trouble making decisions and managing your affairs at this point.  Luckily, you planned ahead and have a Health Care Proxy in place.  Your agent fills out the reams of paper that seem necessary for your admission, including a binding Agreement to Arbitrate.  That means that if you ever have a dispute with the nursing home, you are agreeing in advance to use binding arbitration, and not a jury trial, to settle that dispute.  Your agent signs it, figuring you can’t be admitted without it.  All is well until a dispute arises and – boom – you’re stuck heading to arbitration.

While it may sound attractive, arbitration tends to favor the “big guys” – in this case, the nursing home and health care providers.  For you as the patient, or “little guy,” jury trials are far more consumer-friendly.

Good news, though – in January, the Massachusetts Supreme Judicial Court (our highest court) decided the Johnson case, which says that the decision to sign an arbitration agreement isn’t a health care decision.  And because the agent named in your Health Care Proxy can only make health care decisions on your behalf, if he or she signs an arbitration agreement, a court will find that agreement void.

But what if you have both a Health Care Proxy and Power of Attorney in place?  This difference is key because the agent named in your Power of Attorney CAN agree to binding arbitration on your behalf.  A Power of Attorney gives more business-related decision-making powers than a Health Care Proxy, so the agent named in your Power of Attorney can make financial and legal decisions on your behalf.  Agreeing to arbitration is not a medical decision but it is a legal one, so it’s one the agent named in your Power of Attorney CAN make.

As I mentioned, arbitration tends to favor the nursing home if a dispute arises.  But how can you protect yourself?  First, most nursing homes do NOT condition admittance on whether or not you (or your agent) agree in advance to arbitration.  Simply refuse to sign the arbitration agreement within the admission packet, or if it is part of a larger document, cross out those paragraphs.

Also, your Power of Attorney document should make it clear that your agent cannot agree to binding arbitration before a dispute arises.  When a dispute happens, arbitration may be your best option – but you don’t want to make that decision before you know the facts.

And if you don’t have a Health Care Proxy or Power of Attorney yet?  Put them in place now.  It won’t take much time at all.

Heard at the Office: “I Don’t Need a Power of Attorney, My Spouse Can Manage My Finances for Me.”

February 6, 2014

Filed under: Estate Planning,Financial — Alexis @ 10:40 AM

That would be the simplest approach, but unfortunately, this is not the case. For any accounts that are joint with your spouse (usually bank accounts, like savings, checking, and CD’s), then yes, even if you are in the hospital or develop dementia, your spouse can manage those accounts.

But what about accounts that are in your name alone? Like your IRA and 401(k), for starters? And that Christmas account that you opened a few years ago, the one your spouse doesn’t even know about? If you are the only owner of an account, then you are the only one who can access those funds. Your spouse cannot help you with your accounts – unless you name him as an Agent under your Durable Power of Attorney (POA).

Only after you (1) name your spouse as an Agent in your Durable Power of Attorney and (2) contact your bank or financial institution to have him listed as a POA on the account, can your spouse then help you manage your accounts in the event you become hospitalized or otherwise unable to manage your finances.

If you develop dementia and have accounts in your name alone, and if your family needs to access those accounts for your care, then your family will be forced to go to court to establish a “Conservatorship” over you. That costs a lot of money (your money, by the way), and takes a lot of time and emotional energy.

Moral of the story? Put a Power of Attorney in place now. It doesn’t take much time at all.

Heard at the Office: “Can’t My Spouse Automatically Speak for Me at the Hospital?”

January 30, 2014

Filed under: Estate Planning,Medical Care — Alexis @ 10:40 AM

Under the law, no. In real life, sometimes.

Many people think that they don’t need to sign a Health Care Proxy because they assume that the law permits their spouse to speak for them in medical emergencies. The law actually says quite the opposite. Only you or someone you have named in a Health Care Proxy has the authority to make medical decisions for you.

Real life doesn’t precisely follow the law. If hospital staff get the sense that the family all gets along and don’t think anyone in the family will have an issue with the well-spouse being the decision-maker, they will often turn to the well-spouse to make the decisions. But if hospital staff sense any dissent among the family, they will want to see a Health Care Proxy.

But what if you never signed one? Well, the hospital will tell your family that they need to go to court to have a guardian appointed. That costs a lot of money (your money, by the way), and takes a lot of time and emotional energy.

And even if the family all gets along just fine, there are other reasons hospital staff may ask to see a Health Care Proxy (and if there isn’t one, send your family off to court). For example, if you need antipsychotic medications, like anxiety or depression medications, the staff will ask to see a Health Care Proxy. Another common example arises when hospital staff considers inserting or removing a feeding tube, or using or discontinuing use of a ventilator. As you can see, even if your family gets along, the hospital staff still will need to see a Health Care Proxy (or, you guessed it, send your family off to court for guardianship).

Moral of the story? Put a Health Care Proxy in place now. It doesn’t take much time at all.

Life and the Afterlife: Durable Powers of Attorney & Health Care Proxies vs. Wills

January 14, 2014

Filed under: Estate Planning — Alexis @ 2:15 PM

There is some basic vocabulary that almost everyone mixes up. Understanding which word to use when will help you better understand your estate planning documents.

During Life

During your lifetime, you want to have someone as “backup” to help you with your finances and personal business should you become incapacitated. (Or if you decide you’ve just had enough paperwork for one lifetime and would like to hand off financial management off to someone else.) You do this through your durable powers of attorney, and the person you name is called your agent.

You also want to name someone now to make health care decisions for you if at some point in the future you can’t make or communicate your own. You do that though a health care proxy, and the person you name is called your agent.

In the Afterlife

After you pass away, the durable powers of attorney and the health care proxy become null and void. At this point, your assets will be managed by others in one of two ways, depending on how you held title to the various assets during your lifetime: (1) nonprobate and (2) probate.

Nonprobate assets are those assets on which you have put someone else’s name along with yours, such as joint ownership on a house, listing a beneficiary on a life insurance policy, or listing a “payable on death to” on a bank account. Whomever you named will take ownership of that asset at your death, either automatically or by filing simple forms with the financial institution holding that asset.

Probate assets are those that are in just your name, for example if you are a single person and own your home, or if you have a bank account in your name alone. Those assets will be governed by your will, and the person you name is your personal representative. That’s actually a new term – the Massachusetts legislature recently overhauled the probate laws. The person you name as the “manager” under your will used to be called the executor. Your personal representative will manage the assets and distribute them to the devisees that you have named in your will.

Where Do Trusts Fit in?

Trusts serve you both during your lifetime and after you die. You will name someone in your trust to serve as the “manager” – that person is called the trustee. It is very common to name you (the “grantor” or “settlor” of the trust) as the first trustee, and to name successor trustees to take over during your lifetime should you need help, as well as after you die.

If your attorney drafts a trust for you, she will most likely tell you which of your assets to transfer to the trust. For any assets held by the trust while you are living, the trust acts like a durable powers of attorney: If you become incapacitated or if you would simply like someone else to manage the trust assets for you, then whomever you have named as your (successor) trustee can manage those assets while you are living. After you die, the trust acts like a will: The trustee will manage the assets and distribute them to the beneficiaries that you have named in the trust.

[Side Note: If you have a trust, then you may be wondering why you also need a durable powers of attorney and a will. There are two reasons: First, not every type of asset can be placed into a trust, for example, retirement benefits. Second, you want these extra documents as “back up” in case over the years you acquire new assets or open new accounts and forget to list the trust as owner.]

Understanding which word to use when will help you have a more productive conversation with your elder law attorney (and to impress your friends).

Heard in the Office: “I Want to Name My Son Executor under My Power of Attorney.”

August 2, 2012

Filed under: Estate Planning — Alexis @ 10:20 AM

I hear this a lot.  This post is about vocabulary.

A Durable Power of Attorney is the document where you name someone to help you while you are living – you name someone (usually a spouse, child, sibling, or best friend) to help you in case you are unable to manage your finances yourself, for example if you are in the hospital, develop dementia, or – gasp – go on vacation.  When you name someone in your Durable Power of Attorney, we call her an “Agent.”   You Agent can help you, while you are living, with banking and personal business, like paying bills, applying for a reverse mortgage, changing the amount of your IRA distributions, etc.

After you die, the Agent’s power ceases.  Now your Will comes into play, and whomever you have named as your “Personal Representative” takes over managing your finances.  (Wait! What happened to the word “Executor”?  See this post.)  Your Personal Representative will pay your last bills, cash out your life insurance, probably consolidate multiple bank accounts into one account, sell your house, etc., and then, once all the dust has settled, divide the proceeds up among your heirs.

The “Agent” under the Durable Power of Attorney and the “Personal Representative” under your Will have essentially the same jobs.  And quite likely, you have named the same person in both documents.  (Usually, whomever a client wants handling her money while she is living is the same person she wants handling it after she dies.)  But to avoid confusion when your Agent is dealing with the bank or other financial institution, make sure the Agent refers to herself as the “Agent” and not the “Executor.”  If she introduces herself as the “Executor,” people will think that means that you have died – and most of us would rather not have others thinking that until the time actually comes.

 

 

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