King & Wood, P.A.

What Is the Best Way to Pass Property to Heirs?

“Estate planning may not be at the top of anyone’s list of fun family activities. However, it can be an opportune time to discuss what’s best for the shared family home.”

Estate planning is done to ensure that wealth is passed efficiently, while minimizing tax exposure. For many families, wealth includes real estate. Gifting undivided real estate interests is often overlooked as a smart way to pass property to loved ones, as explained in a recent article, “Unlocking Value in Shared Real Estate” from Wealth Management.

Families owning joint properties like vacation homes, rental properties, or inherited land should consider the use of undivided real estate interests to secure a financial legacy. Undivided real estate interests refer to a fractional share of a property that multiple owners hold joint rights to, without any specific part belonging to any one person. Every owner has equal access and ownership to the entire property, and the owners don’t have to be related. These typically take the form of homes passed down to multiple heirs or rental properties owned by siblings or business partners.

The term “tenancy in common” is often used interchangeably with undivided real estate ownership.

There are some drawbacks to this ownership structure. Major decisions will need all owners to agree. Owners may not sell their joint rights to the property, unless they can find someone who wants to be a joint owner—there’s no significant market for buying a house with someone else’s family. This makes it challenging to achieve liquidity due to a lack of control and marketability.

These same drawbacks produce significant benefits, namely, creating valuation discounts because of the inherent limitations on control and marketability. Unlike properties wholly owned by individuals, fractionally owned real estate is recognized by the IRS as having a fair market value that differs from that of properties wholly owned by individuals. A professional valuation expert will be needed to substantiate the discounts, allowing the family to claim accurate value reductions.

Here’s an example of how this might work. Let’s say three siblings inherit a family vacation home valued at $1.5 million. Each receives an undivided one-third interest. While the value of the total property is clear, the experienced appraiser takes into account the fractional ownership structure. The valuation discount is 30%, with the fair market value of the taxable gift being $350,000 per sibling. The total amount transferred for estate tax purposes is then reduced to under $1.1 million from the original $1.5 million.

Planning with an experienced estate planning attorney and a professional valuation expert is crucial for effectively applying valuation discounts. The IRS scrutinizes valuation discounts, so having real market data is necessary to support the discount. This is not the time to use a boilerplate form or use non-professionals.

Despite the complexity, the use of undivided real estate ownership can yield substantial tax advantages, making this something to discuss with your estate planning attorney to secure your legacy.

Reference: Wealth Management (May 19, 2025) “Unlocking Value in Shared Real Estate”

Top Digital Estate Planning Mistakes to Avoid

“The rise of digital platforms, online accounts, and cryptocurrency has reshaped the role of digital assets in modern estate planning.”

While digital assets were once a brief side discussion in estate planning, this new asset class is now so much a part of our lives as to require an in-depth conversation with your estate planning attorney, digital executor, and heirs. A recent article from The National Law Journal, “The Biggest Misconceptions About Digital Estate Planning,” explains the biggest mistakes people make with their digital estates.

Mistake 1: My will protects my digital assets. A generic clause added to your will is a good starting point. However, it could be problematic, especially if your digital assets include bitcoin. Remember, a will becomes a public document when filed with the court, so information like account numbers, private keys, passwords, or anything used to access digital accounts should never be in your will.

Without proper digital asset authorization language in your will and other estate planning documents, anyone acting on your behalf, including executors, agents under a Power of Attorney, and trustees, may lack legal rights to access digital assets. Estate planning documents must provide fiduciaries with the proper directives to allow them to access and manage digital assets. The Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA) has been passed in most states and governs how assets may be accessed and managed.

Mistake 2: Service provider platforms will handle digital assets after death. This is why your father-in-law’s Halloween photograph is still on his Facebook page ten years after his passing. Platforms do not automatically transfer control of accounts, even when your digital executor has the correct documentation. They will need to follow the steps to take control of your accounts. However, they may not always have the necessary access. There are several large platforms now allowing the creation of a “legacy” contact to appoint someone to manage your account, but most do not. Your family may need to go to court to gain access—something to be avoided.

Mistake 3: I can give my passwords to my spouse or children. Every time you change your username or password, you’ll need to update the info and share it. However, that’s just the start. Many digital assets utilize two-factor authentication, which requires your face or phone to verify your identity. A photo of your face won’t work. Sharing passwords and logins violates many laws and terms of service agreements, which are the contracts you click on when downloading an app. It may not matter while you’re alive and using the platform. However, if someone wants to access your accounts if you are incapacitated or have died, your account could be locked permanently.

Mistake 4: Digital assets don’t go through probate. Digital assets are now treated just like any traditional asset when it comes to estate planning. Unless they are owned jointly, placed in a trust, or titled as payable-on-death, they are subject to probate. If the proper legal access isn’t addressed beforehand, the asset may be lost permanently because there’s no paper trail. Even an account as basic as your electric utility bill needs to be dealt with to avoid unnecessary headaches.

Mistake 5: The value of my digital assets is too small to bother with. The value of many digital assets is not in money, but in sentiment. Photos, emails and social media posts are all part of your digital legacy. Imagine if your parents’ old photo books were lost forever—your digital photos hold the same cherished memories.

Identity theft is another reason to secure and plan for your digital assets. If your account is inactive and someone hacks into it, they can use it to create fake accounts and create all kinds of digital havoc for heirs and representatives.

Mistake 6: Digital estate planning is only important for people who invest in cryptocurrency. Digital estate planning is crucial for individuals who hold digital currency. The average person today has around 160 accounts, including email, social media, online banking, cloud storage and more. Even if you die with no net worth, your family could inherit a digital scavenger hunt, which is even more challenging than sorting through endless boxes of old receipts and bank statements.

Talk with your estate planning attorney about your digital assets and how to protect them along with your traditional assets. Your executors and heirs will be glad you did, and they’ll be able to do something about your silly Halloween photo remaining online long after you’ve passed.

Reference: The National Law Review (May 16, 2025) “The Biggest Misconceptions About Digital Estate Planning”

How Do I Protect My Child’s Inheritance in a Second Marriage?

“Make sure that you have a will and up-to-date beneficiary designations on all of your bank accounts, life-insurance policies and brokerage accounts.”

A recent article from MSN, “’I’m 15 years older’: My second wife says she will pass my estate onto my sons. What could go wrong?” presents a question from a man with two adult sons from a prior marriage with $1 million in personal net worth. He’s wondering whether to rely solely on his wife’s verbal assurance to pass his estate to the adult sons if he predeceases her.

The sons are successful in their careers and don’t need his money. The man says his wife is one of the most honest people he’s ever met. However, is trust enough?

Estate planning files are filled with broken promises, not because of dishonesty. Circumstances change, and things happen. Having an updated estate plan, including a trust to safeguard assets for children from a prior marriage, is the best way to ensure that their interests are protected.

A large age difference or a large disparity between the spouses’ assets makes it wise to take the extra steps to preserve assets for the next generation. Otherwise, there’s no requirement for the surviving spouse to pass the assets on to the children.

If the surviving spouse remarries, the assets could even end up with children of their surviving spouse.

There are time-tested ways to distribute assets to children from a prior marriage to ensure that the spouse is well cared for and the children are not disinherited. One way to do this is to use a will to divide assets between the surviving spouse and the children.

Another is to leave the home, if it is in your name only, to the surviving spouse as a life estate, so they will be able to live in it for the rest of their life. The house will need to be maintained, and property taxes paid during that time. When the spouse dies, the house can then be left to the children to sell or keep. This can become complicated if the children are in a hurry to sell the home and the surviving spouse has a long life expectancy.

Marital trusts, like a Spousal Lifetime Access Trust or SLAT, are used to leave assets to the surviving spouse, while protecting the children’s inheritance. They can also be used to control how the assets in the trust are used. Funds can be earmarked for college, or if a child requires rehabilitation, the trust can fund it or set a requirement before distributions are made.

Tax benefits using a marital trust are higher than those for a straightforward inheritance, another reason to use a marital trust.

Note, this is not an issue to be resolved with a pre- or post-nuptial agreement. A will goes into effect upon your passing, and a trust becomes active once it is established. A pre- or post-nuptial is a good idea for a second marriage with age and net worth differences. However, this kind of situation requires a will and a trust.

Talk with an experienced estate planning attorney to create an estate plan to protect your spouse and your children. It will take the burden off all of you, since the decisions for asset distribution will be in place, and you can focus on enjoying your life with your new spouse.

Reference: MSN (May 3, 2025) “’I’m 15 years older’: My second wife says she will pass my estate onto my sons. What could go wrong?”

What Does an Executor Do?

“This expert guide presents 11 proven methods to handle estate settlement properly with support from professional advice and tested practices.”

Being named as an executor is an honor and a large undertaking. An article from msn offers a guideline: “Executor’s Checklist: 11 Essential Steps to Smoothly Settle an Estate.”

Obtain death certificates. Secure multiple original death certificates from the funeral home. You’ll need them to start insurance claims, close Social Security and many other future transactions.

Find the will and other estate planning documents. An estate planning attorney can help you file the will with the probate court. This is necessary for the executor appointment to be approved and the will to be validated. Once these two events occur, you can begin to settle the estate. If there is no will, an estate planning attorney should be contacted to guide the process through the courts.

Notify beneficiaries. You’ll also need to notify family members to avoid misunderstandings, even if they are not mentioned in the will. The attorney will tell you if you need to publish a legal notice in a local newspaper or other outlet. Social Security, Medicare and any other government agencies must be notified. Being transparent and thorough will prevent legal problems from occurring later on.

Secure and inventory assets. If the decedent hasn’t done so, create an inventory of all assets, including real estate, investment accounts, cars, boats and personal belongings. A thorough inventory would minimize the chances of lost assets and conflicts with heirs.

Establish an estate bank account. You’ll need to apply for an EIN number first, then you’ll be able to open an estate bank account to consolidate the deceased’s accounts. The executor uses the funds in the estate account to pay bills, debts, taxes and any estate-related expenses. A clear record will help in reporting to beneficiaries.

Manage ongoing expenses and settle debts. Utilities, mortgage payments and insurance premiums still need to be paid. By keeping them up to date, you maintain the estate's value and prevent disruptions to essential services. If there is no money in the estate, the executor may need to sell assets to pay bills. Document everything to protect yourself from any future conflicts.

File tax returns. The executor is responsible for the decedent’s final income tax return and any estate tax returns. If the decedent lived in a state with an inheritance tax, the inheritance tax is the responsibility of the heirs, not the executor. Consult with a local estate planning attorney to be sure that the required tax payments are being made.

Have assets evaluated by a professional. An expert should value businesses, jewelry, art, collectibles and real estate. You should not do the real estate valuation, even if you are a realtor. A certified appraiser should value high-ticket items. Your estate planning attorney will have a network of experts to offer.

Pay estate taxes. If the estate is higher than the federal estate tax exemption limit, the estate will need to pay taxes within the applicable time limit. If you fail to meet the deadline, the penalties are strict and could result in substantial fines. While the current federal estate tax exemption is at an all-time high of $13.99 million per person, this may change in the future.

Distribute assets. Assets should not be distributed to heirs until all debts and other costs have been paid. Make sure to get receipts or signed agreements from beneficiaries to have proof of compliance.

Close the estate. Don’t overlook this final step. The court must be presented with a final financial summary of all financial dealings, including asset prices and debt repayment. Once the approval has been obtained, estate bank accounts can be closed and you can hang up your executor hat.

As you can see from these 11 steps, being an executor is a large responsibility. If it’s too much, speak with an estate planning attorney who can take on all or some tasks or provide guidance.

Reference: MSN (April 14, 2025) “Executor’s Checklist: 11 Essential Steps to Smoothly Settle an Estate”

Don’t Overlook Estate Planning While Building a Business

“With these pressures, personal estate planning often takes a backseat. This can lead to missed opportunities for minimizing tax exposure and cementing a founder's legacy.”

According to a recent article from Reuters, “Estate planning for founders: a roadmap for success, " estate planning should be at the foundation of an entrepreneur's overall plan for the future.” The pressures of building a business can cause estate planning to be overlooked, leading to significant issues for family members and the business itself.

Core planning, business continuity and wealth transfer strategies are key components to be addressed.

Core planning clarifies estate planning. Who will control the assets, who will benefit from them and how will taxes be paid? Included in core planning is creating a will and trusts and appointing fiduciaries for the estate. Within this area, there are three further elements:

• Planning for taxes. If a startup value appreciates rapidly, there needs to be a plan to mitigate transfer taxes to maximize the wealth passed to the next generation.
• Asset protection. Inheritances need to be protected by implementing asset protection strategies. This may include using trusts, company structures (like LLPs) and other means of protecting assets from claims by creditors or ex-spouses.
• Planning for Incapacity. With properly created documents, including Financial Power of Attorney, Healthcare Proxy, HIPAA Release and Living Wills, the business owner’s personal and financial affairs are handled smoothly by individuals of their choosing.

Business continuity requires a strategic plan for incapacity and the eventual fate of the business, whether it’s to be passed down to the next generation, sold, or dissolved.

• Liquidity planning. If the founder’s retirement is to be funded by the sale or transfer of the business, how will the business continue to operate? Cash flow mechanisms could include insurance policies, investment accounts, or other liquid assets.
• Buy-Sell Agreements. These are often created to take effect following a triggering event, like death or incapacity. The agreements should be designed to avoid any disputes and ensure the stable continuation of the business.
• Funding with Life Insurance: Life insurance is often used as part of buy-sell agreements to ensure that the business can continue and the family receives fair compensation for their portion of the business.

Wealth transfer strategies. The goal is to maximize the owner’s legacy by minimizing taxes and transferring wealth to beneficiaries most efficiently.

• Estate “freezing” techniques include the use of Grantor Retained Annuity Trusts (GRATs), Spousal Lifetime Access Trusts (SLATs) and dynasty trusts, used to minimize estate taxes by transferring future appreciation of assets to beneficiaries.
• Qualified Small Business Stock Planning. If founders have Qualified Small Business Stock (QSBS), they can achieve significant income tax benefits with careful estate planning.
• Charitable Giving. Philanthropy is a means of reducing estate taxes, while supporting causes that have meaning for the founder. Creating charitable trusts or foundations allows business owners to impact their communities, significantly enhancing the founder’s legacy.

Regardless of the size of the business, it’s important to create a plan to address issues to protect the business's long-term growth, maximize the wealth of the founder and their family and create a legacy for the future. Talk with an estate planning attorney about creating a plan today.

Reference: Reuters (April 17, 2025) “Estate planning for founders: a roadmap for success”

Zappos Founder’s Will Is Discovered: What Now?

“Tony Hsieh left a will that was just discovered—4½ years after his death, according to a new court filing that could upend the tech mogul’s probate case and legal battles over his estate.”

This new development in the Hsieh estate saga presents two estate planning lessons: make sure your executor and loved ones know where your estate planning documents are located and have a successor executor in case your co-executor cannot act on your behalf.

An article from the Las Vegas Review-Journal, “Shocking twist: Tony Hsieh left a will after all, new filing says,” explains what we know so far.

Tony Hsieh founded Zappos, building the online shoe and clothing website into a unique and highly successful business. In 2009, Hsieh sold Zappos to Amazon for $1.2 billion, remaining as CEO until 2020.

After Hsieh died, his father acted to take over the administration of his estate. Many court filings stated that no will existed. However, lawyers who aren’t connected to the Hsieh family filed court papers with a will and an explanation of how it was found recently.

The new court papers included a will dated March 13, 2015, signed by Hsieh and several witnesses. The document had been given to Pir Muhammad, who subsequently developed Alzheimer’s disease and passed away. The will was found among Muhammad’s personal belongings.

The will says that only Muhammad had a copy of the original will. Hsieh was worried about someone tampering with his will and made a video as an additional layer of precaution. Hsieh’s letter also said no beneficiaries had been told about his plans, so that they wouldn’t know anything until after his passing. He said he wanted them to “experience the ‘WOW’ factor.”

The ‘WOW’ factor was a core value at Zappos, described as creating a memorable, delightful customer experience. While it was great for his customers, it wasn’t so great for his estate plan.

The newly discovered document named an attorney as co-executor with Muhammad and said that if either Muhammad or Armstrong failed to act, another attorney was the contingent executor. Muhammad had signed the will. However, the other two co-executors had not.

Many claims have been made against the estate by people who say they were doing business with Hsieh. Sadly, in his final years, court papers state his behavior was increasingly erratic. There were allegations of people taking advantage of him as his health deteriorated.

According to the family’s legal counsel, the family sought to locate a will. However, they were unsuccessful.

While Hsieh’s precaution was understandable, given the vast wealth, unfortunately, his decision not to tell anyone about the will’s existence has led his family to an equally large amount of legal trouble and stress.

The lessons apply at any level of wealth. Have an estate plan created with an estate planning attorney, share document details with more than one person and plan for the unexpected to protect your loved ones and your legacy.

Reference: Last Vegas Review-Journal (April 18, 2025) “Shocking twist: Tony Hsieh left a will after all, new filing says”

Three Top Excuses Heard by Estate Planning Attorneys

“We all know we’re going to die one day. There are things we should put in order before that time comes.”

Recognition of your mortality and taking the time to plan for tying up the business of your life are two very different things. Estate planning attorneys hear reasons for delay all the time. However, the explanations aren’t going to help your family when they have to administer an unprepared estate while grieving. A recent article from MarketWatch, “The top 3 excuses people make to put off estate planning--and why they’re all wrong,” offers food for thought.

I don’t own enough to need an estate plan. Even if you die in debt, you need an estate plan to prevent loved ones from having costly problems like probate, taxes and other issues. If you’re in a nursing home and all you own is a bank account with a named beneficiary, you may not need a will. However, you definitely need medical directives, including:

• Healthcare Power of Attorney (or Healthcare Proxy), someone you name who can make medical decisions.
• HIPAA Release so a person of your choosing can access health insurance information and medical records.
• Designated representative for Medicare, Medicaid and Social Security
• Living Will to express wishes for end-of-life care. Do you want to be kept on life support if you aren’t expected to regain consciousness? What about artificial feeding? These are tough issues to address. However, without expressing your wishes, your family won’t know what you want.

Procrastination has worked before, so why change now? Many people are waiting to see if changes will come to federal estate tax exemptions, which are set to happen at the end of 2025 unless Congress acts. No one knows what will happen. However, if your estate is hovering near the $7 million mark and you wait until the last minute to make changes, your estate could become taxable. Creating and executing an estate plan takes time, so that procrastinating could cost your heirs 40% of your estate.

I don’t know where to start. This is what experienced estate planning attorneys are for. Just as you wouldn’t be advised to perform surgery on yourself, you need the services of a skilled and trained estate planning attorney to create an estate plan to achieve your goals.

Start by gathering any documents you might already have, including investment and pension accounts, life insurance policies, titles and deeds and anything you think might be relevant. Next, make an appointment with an estate planning attorney who can explain the process, offer strategic tools to minimize taxes, transfer wealth and prepare an estate plan to protect you and those you love.

If you need more of an incentive consider this: putting a loved one through the process of a scavenger hunt to identify documents, spend their own money to retain counsel to go to court to obtain a guardianship if you are incapacitated and need their help, or be powerless as a lifetime of work evaporates in estate taxes, will teach a valuable lesson of what not to do. If you’d prefer to be remembered with love and affection and not resentment, it’s time to stop procrastinating.

Reference: MarketWatch (April 17, 2025) “The top 3 excuses people make to put off estate planning--and why they’re all wrong”

Why You Need an Estate Planning Attorney

“Handling legal documents without expert guidance can lead to costly mistakes, overlooked details and unintended consequences.”

It seems like some estate planning documents should be easy for a regular person to create. However, as the Greek philosopher Socrates said, “You don’t know what you don’t know.” This is especially true when it comes to estate planning, says a recent article, “9 Legal Documents You Should Never DIY—Here’s When to Call a Lawyer” from msn. If you create documents and they aren’t legally sound and enforceable, your home-made solution could cause a mess for you while living and your heirs after you’ve passed.

Healthcare Proxy. Having a healthcare proxy document prepared allows someone you trust to make medical decisions for you if you cannot. A standardized form is just that—standard—and may not reflect your personal wishes. This document is also important for parents of young children, so a person you trust can make decisions for your children if you cannot.

Power of Attorney. The POA is used to appoint a person of your choosing to handle your financial and legal affairs if you become incapacitated. The agent’s powers end upon your death. An estate planning attorney will draft one reflecting your wishes and following your state’s laws.

Living Will. This document expresses your personal medical preferences if you can’t communicate. If your medical situation is dire and you are not likely to become conscious, it provides clear guidance for long-term care. Without this document, your loved ones will be left guessing what you would have wanted.

Revocable Living Trust. Assets placed into trusts don’t go through probate, remain private and pass directly to heirs as per the instructions in the trust. An estate planning attorney will tailor the trust to your situation during life and after death.

Beneficiary Designations. When you open an investment account or purchase life insurance, you can name a beneficiary. This is the person who inherits the account or receives proceeds on your death. Many estate planning mistakes occur because people don’t update their beneficiary designations. Note that the beneficiary designation overrides any will or trust, so be sure they are correct.

Business Succession Plan. If you own a business, this blueprint will be used to direct how the business should continue when you retire or after you die. It will address issues of leadership, family ownership and your vision for the business to continue in the future. It takes several years to create a business succession plan, and your estate planning attorney will work with family members, key employees, financial officers and CPAs to ensure a smooth transition.

Last Will and Testament. This document directs how you want your property to be distributed upon your death. Without a will, known as intestacy, your estate is distributed according to the laws of your state, usually by bloodlines or kinship.

Prenuptial or Postnuptial Agreements. While these documents are used in case of a divorce, they are sometimes used to support estate planning disagreements to clarify intentions. If you come to a marriage already owning assets, or if there is a big disparity in wealth, it makes sense to have an agreement in place.

Guardian Designation. If you have minor children, your last will and testament includes a guardian named to raise your children if both parents die or become incapacitated. An attorney is needed to be sure this is properly documented. Without a will naming a guardian, a court will decide who will raise your children.

Working with an experienced estate planning attorney protects your family, finances and future. Estate planning attorneys know what you don’t—covering all bases and preventing legal complications for you and those you love.

Reference: msn (March 17, 2025) “9 Legal Documents You Should Never DIY—Here’s When to Call a Lawyer”

Estate Planning Lessons from Celebrities

“While it can be easy to assume that celebrities would have airtight estate plans, time and time again Hollywood stars have made costly decisions that could have been easily avoided.”

Putting off making estate plans is common. However, it is also not wise. You won't know about the legal battles, tax bills, financial chaos and family stress. However, your family will. Learning from the mistakes made by famous people provides good lessons, says a recent article from CNBC, “3 end-of-life money mistakes celebrities have made—and how you can avoid them.”

Aaron Carter was very young when he died without a will, leaving behind an 11-month-old son and a fiancée. In California, the court designates the child as the sole heir when an unmarried person dies without a will. However, Carter’s son was a minor, and minors may not legally inherit assets. In this case, the court appointed a fiduciary to manage the estate.

A better way: have an estate plan created, even if it’s just a basic will. Parents of minor children should have a will to name a guardian, unless they want the court to appoint a guardian. An estate plan could also be used to care for a loved one if you aren’t married.

Another problem is created when there’s money but no estate plan. Few people want an 18-year-old child to inherit large amounts of money with no guardrails in place. A trust is an excellent way of setting terms and conditions on an inheritance, whether the parent is living or has died.

Kobe Bryant is an example of what happens when you don’t update an estate plan. When he died, he did have an estate plan. However, it hadn’t been updated to reflect the birth of his child, Capri. As a result, she wasn’t legally a beneficiary of his estate. His widow had to go to court to petition to have the daughter added to the trust.

Had the trust been updated, his widow would not have had to go through this process in the public eye.

Your estate plan needs to be updated when new family members are welcomed. The same is true for any big life event, like marriage, divorce, death, or a major financial change. Estate planning documents need to reflect the changes in your life.

James Gandolfini offers a harsh lesson in how estate planning is needed to prevent an estate from being decimated by taxes. Gandolfini had taken the time to create a will. However, no tax planning was done for his estate. His $70 million estate paid an estimated $30 million in federal and state estate taxes before making distributions to friends and relatives.

An experienced estate planning attorney will be able to review your situation and determine which strategies will work best to protect your estate and your family. Everyone needs to have an estate plan, no matter the size of your estate or how many people recognize you when you walk down the street.

Reference: CNBC (April 20, 2025) “3 end-of-life money mistakes celebrities have made—and how you can avoid them”

Is Power of Attorney for Health Care Needed If You’re Healthy?

 

“No one expects a sudden medical crisis. However, being prepared can save your family from unnecessary legal battles and emotional distress.”

Like most people, a 61-year-old man never thought he would have a health crisis. Neither did his family. However, he was struck with a sudden heart attack, followed by complications leading to a brain injury and he became incapacitated. The family was faced with a terrible situation in addition to their father’s health crisis.

The couple had never done any estate planning, nor did they have a Power of Attorney for Health Care. The spouse assumed she would have the legal right to make medical choices for her husband.   However, without a POAHC, she had no standing. A recent article from the Wisconsin Newspaper Association, “Wisconsin Spouses can’t make medical decisions without this document,” should serve as a wake-up call for families across the country, since this is not a one-state issue.

There is no automatic right to make healthcare decisions for an incapacitated partner. Unless both spouses are joint owners, one can’t access bank accounts. Without having the right estate planning documents in place, a spouse won’t be able to make decisions, pay bills, or transfer money between accounts to ensure the household runs smoothly.

Medical decisions for the man fell into legal limbo and got tangled up in red tape. Instead of focusing on his recovery, they embarked on a legal process that could have easily been avoided with one document.

First, the family had to petition the court for legal authority over his medical care, known as guardianship. This was an expensive, time-consuming and emotionally exhausting process, all going on while they were adjusting to this dramatic change in his health.

Making matters worse, he was not a compliant patient in his altered state. He wandered frequently, and one night, he got out of the hospital on a bitterly cold night. To make matters worse, the hospital couldn’t discharge him to a rehabilitation facility until the court awarded the family guardianship. The family was bombarded with questions about the status of his case, which was scheduled weeks away.

At the same time, there were further problems with the hospital without a designated health care agent. First, the hospital administrators insisted that the patient be discharged to a long-term care facility. They then said the insurance company had stopped paying, so he had to go home. When the family sought help from the county, the hospital threatened to tell the courthouse that the family was neglecting him and threatened the guardianship process.

The hospital reneged on its promise to help provide at-home nursing care when the guardianship process was finally completed. The family was left on their own to find appropriate care.

This nightmare could have been avoided if the couple had an estate plan, including naming a healthcare agent with a Power of Attorney for Healthcare. When he became incapacitated, his wife or adult child could have had the legal authority to make health care decisions on his behalf without the delays, added expense and frustration of court proceedings.

Everyone should have a Power of Attorney for Healthcare, sometimes known as a Healthcare Proxy, to name another person to step in and make decisions for them in case of incapacity. We never know what will happen, even to our healthiest family members. Anyone over age 18 needs to have a POAHC. Talk with your estate planning attorney and take care of this before it’s needed.

Reference: Wisconsin Newspaper Association (April 7, 2025) “Wisconsin Spouses can’t make medical decisions without this document”