King & Wood, P.A.

Estate Plan can Ease Anxiety and Confirm Legacy

“Preparing for the future supports the causes you believe in and provides peace of mind for you and your heirs.”

Creating an estate plan can take stock of today’s priorities while creating a legacy by clarifying intentions. This could mean providing for your family, supporting charitable organizations, or providing a means for future generations to know about your passions. Estate planning also addresses tax issues and can be used to reduce court involvement with your estate, according to a recent article from Worth, “Take Charge of Your Legacy With an Estate Plan.”

For most people, considering death is uncomfortable, but your estate plan is essential to those loved ones taking care of your estate. Nearly all wealthy Americans expect to leave money or other assets to their children. People who don’t consider themselves wealthy also intend to leave property to their loved ones.

Consider what happens when no estate planning is done. It took six years to settle the $156 million estate of singer Prince, who died without a will in 2016. A jury only recently finished determining the inheritance of Aretha Franklin, who left conflicting wills after she died in 2018. While the estate was being decided, it dwindled from an estimated $80 million to $6 million.

Having an estate plan can also alleviate anxiety, with a survey showing individuals with investible assets of $1 million—$10 million feeling more in control of their finances once they have an estate plan in place.

Creating an estate plan may be easier if you address parts individually. You may even have some parts in place already, such as details about ownership of bank or investment accounts and beneficiary designations.

All assets need to be recorded, including digital assets. The estate plan should include information on life insurance proceeds because there may be adverse tax implications for the estate if they’re not appropriately structured. For instance, life insurance proceeds are generally exempt from federal income taxes; they are included in the estate and could potentially bump the estate's value above the federal estate tax exemption. This can be avoided by transferring ownership of the policy to another person or establishing an Irrevocable Life Insurance Trust. Any transfer of life insurance policies made within three years of death is subject to federal tax, so this step needs to be considered carefully with the help of an estate planning attorney.

Don’t overlook the emotions of loved ones. Items with sentimental value often cause family strife, so create a distribution plan for possessions. Your last will and testament should include jewelry, artwork, and family heirlooms.

Part of your estate plan addresses what would happen if you become incapacitated. This includes Do-Not-Resuscitate instructions and other wishes for medical care. Everyone over 18 should have a Power of Attorney in place so someone can manage their legal and financial affairs in case of incapacity. There are different types of POAs; your estate planning attorney will know which best suits your needs.

Estate planning is a time to speak with family members about the role they can play in carrying out your legacy. A family meeting to discuss values, vision, and purpose can be helpful at any level of wealth, from endowing a new building at an alma mater to volunteer opportunities in the community.

Your estate plan is not a “set-it-and-forget-it” document. It should be reviewed annually and fine-tuned, especially when significant life changes occur, like marriage, divorce, death, the sale of a business, a change in the law, or a change in real estate ownership.

Reference: Worth (Sep. 22, 2023) “Take Charge of Your Legacy With an Estate Plan”

How Can I Choose an Estate Planning Lawyer?

“Planning for the future provides protection and peace of mind, so it becomes increasingly important to seniors as they approach their twilight years.”

Only about a third of Americans have an estate plan, according to the article “Choosing an estate planning lawyer” from Senior Matters. The number of people with wills is decreasing, rather than increasing, despite the events of recent years. Estate planning is worth doing, for the peace of mind, the personal and financial protection it provides, not to mention leaving a legacy of caring about the future for the next generation.

Estate planning involves making end-of-life decisions, with an emphasis on both finances and health. Most people think of estate planning as “who gets what,” which is accomplished largely through wills and trusts. For people who have amassed significant assets, this can be complex. An estate planning attorney makes it streamlined and will explain the implications of all aspects of the estate plan.

Estate planning includes gifting, generation skipping transfers, taxes, advance directives, power of attorney, health care proxies, living wills, naming an executor, organ donations, burial preferences, Do Not Resuscitate (DNR) orders and final wishes.

Estate planning is a highly personal process. This is why it’s important to find an estate planning attorney who is compassionate, as well as technically proficient. Estate planning attorneys tend to be caring individuals who chose this field of law because they sincerely wish to help others. They also know what happens when estate planning is not done, because they also help children when their parents fail to do estate planning.

Some people are reluctant to embark on estate planning, in part because they don’t wish to be reminded of their own mortality. Others are concerned about relatives with designs on their estate. However, not having an estate plan makes it more likely that relatives or others could challenge the estate and end up owning assets. An estate plan provides protection.

When a person dies without an estate plan and assets subject to probate, their estate is considered to be “intestate.” Only the court will have any control over how the probate assets are distributed. The probate court will simply follow the laws of your state, which frequently are based on kinship. The exact details vary from state to state, and this is known as “intestate succession.”

The intestate laws may result in outcomes completely different than what you wished. An estranged spouse could end up owning everything, or a child with substance issues could inherit a substantial sum which will be gone in months. In most states, minor children may not receive inheritances, so trusts or custodial accounts are needed.

Estate planning is just as important for people of modest means as it is for wealthy people. If a senior owns their own home, the increase in property values could mean their estate is much bigger than they even realize.

Choosing an estate planning lawyer isn’t difficult. Ask friends and family for referrals, visit websites and find an estate planning attorney who shares your values, understands your family and feels like a good fit. Once your estate plan is in place, you’ll gain peace of mind.

Reference: Senior Matters (Aug. 17, 2022) “Choosing an estate planning lawyer”

 

What’s the Difference between a Living Will and a DNR Order?

“Q: Is there a difference between a ‘living will’ and a ‘do not resuscitate’ order?”

A living will and a Do Not Resuscitate Order, known as a DNR, are very different documents. However, many people confuse the two. They both address end of life issues and are used in different settings, according to the article “One Senior Place: Know the difference between ‘living will’ and ‘do not resuscitate’” from Florida Today.

What is a Living Will?

A living will is a written statement describing a person’s wishes about receiving life-sustaining medical treatment in case of a terminal illness if they are near death or in a persistent vegetative state. This includes choices such as whether to continue the use of artificial respiration, a feeding tube and other highly intensive means of keeping a person alive.

The living will is used to make your wishes clear to loved ones and to physicians. It is prepared by an estate planning elder care attorney, often when having an estate plan created or updated. To ensure it is valid and the instructions can be carried out, be sure to have this document created properly.

What is a DNR?

A DNR is a medical directive used to convey wishes to not be resuscitated in the event of respiratory or cardiac arrest. This document needs to be signed by both the patient and their treating physician. It’s often printed on brightly colored paper, so it can be easily found in an emergency.

The DNR should be placed in a location where it can be easily and quickly found. In nursing homes, this is typically at the head or foot of the bed. At home, it’s often posted on the refrigerator.

The DNR needs to be immediately available to ensure that the patient’s last wishes are honored.

A key mistake made by well-meaning family members is to have the DNR with someone else, rather than at home or at the bedside of the patient. If the DNR cannot be found and emergency medical responders arrive on scene, they are legally bound to provide CPR or other medical care to revive the patient.

When the DNR is available, the emergency responders will not initiate CPR if they find the patient in cardiopulmonary arrest or respiratory arrest. They may instead provide comfort care, including administering oxygen and pain management.

If a person is admitted to the hospital, their living will is placed on the chart. Depending on the state’s laws, a certain number of physicians must agree the patient is in a persistent vegetative state or has an end-state condition and can no longer communicate. At that point, the terms of the living will are followed.

In addition to having these documents created with your estate plan, make sure that family members know where they can be found.

Reference: Florida Today (July 19, 2022) “One Senior Place: Know the difference between ‘living will’ and ‘do not resuscitate’”

Do You Need an Estate Plan or Will?

“Have you thought about how you'd like your family to continue after you're gone? Having an estate plan isn't just for the ultra-wealthy.”

No one wants to squander a lifetime of sacrifice and hard work. However, if there is no estate plan, it’s entirely possible for this to occur. The aim of every estate plan, no matter how larger or small the estate, is to protect loved ones. What steps need to be taken are described in the article “Estate Planning for Everyone” from The Street. An estate plan can include almost any of your goals, and it’s not something to postpone.

Think of estate planning as a means of efficiently transferring the assets you’ve accumulated over a lifetime, while protecting your family from unnecessary expenses, stress and yes, taxes. Without an estate plan, the laws of your state and the federal government will determine who receives what, and your estate will be reduced considerably by taxes. The process will take months, or even years. If you have ever been divorced, own property in more than one state, own a business or care for a family member with special needs, the complications and costs grow exponentially.

The core of any estate plan is the answer to a few simple questions: how do you want future generations to carry out your wishes? Who would you like to take care of? And how do you want to be remembered? An estate plan can allow you to set up a roadmap for future generations, manage how and when wealth is distributed, create a legacy for your family and, if you are charitably minded, for your community.

A Will, or Last Will and Testament. This document is used to spell out how your assets should be distributed upon your death. It also includes naming a guardian if you have minor children and names an executor, the person who will be in charge of carrying out the directions in the will. You can also use a will to name gifts to individuals or institutions. Without a will, assets may be distributed in accordance with state law, which may not be the same as your wishes. Heirs will almost assuredly pay more in estate taxes and the family may find themselves battling over personal items.

The will forms the foundation of estate planning, but it is by no means the only document you’ll need.

Living Will. This is a legal document used to communicate end-of-life decisions. In some states, it’s referred to as an Advance Healthcare Directive. It often includes a Do Not Resuscitate (DNR) order, if you do not want life-extending treatments, like a breathing or feeding tube, blood transfusion, dialysis, or pain medication. The living will only work if the family knows where it is and shares it with your healthcare providers. Let loved ones know your wishes and tell them where the living will is located.

Power of Attorney—Healthcare and Financial. Power of Attorney, or POA documents, name people to manage specific tasks for you if you are incapacitated, whether by illness or injury. Don’t make the mistake of using a standard form because it may not reflect your wishes. For instance, you may want to name one person to handle your finances, but you may not want the same person to handle the sale of your home. The POA can be as broad or as narrow as you want, but only if it is created for your needs.

Without a POA, the family will need to go to court and have one or more people named to act as your guardian. This takes time, is expensive and extremely stressful. What if the court names a family member to make all of your decisions, and it is someone you don’t want? The matter will be out of your control.

Trusts are used to avoid certain assets passing through probate, minimize taxes and maintain privacy. Trusts are legal entities, funded with a wide range of assets, which are transferred out of your control and into the trust, where they are the responsibility of the trustee. When the trust is a “revocable living trust,” then you will likely serve as the trustee as long as you are able. The person who receives the assets at the direction of the trust is known as the beneficiary. There are numerous types of trusts, and your estate planning attorney will recommend the one that works best for your purposes.

Reference: The Street (Nov. 4, 2021) “Estate Planning for Everyone”

Planning Future for Nontraditional Families

“Some people are concerned that the new conservative 6-3 majority on the Supreme Court will roll back protections for non-traditional families. Regardless of the decisions at the Supreme Court, or the impact on the state family courts, there are many ways that non-traditional families can maintain control.”

Today’s non-traditional family are not just LGBTQ couples, but families undergoing gray divorces, blended families, stepchildren, multinational families and children born through assisted reproductive technologies, referred to as ART, in a recent article titled “How to Plan for LGBTQ, Blended Families, Cohabitation, Other Nontraditional Families” from Financial Advisor.

The key is having an estate plan prepared that is flexible so that last wills, trusts, and all documents reflect the non-traditional family very clearly and do not leave room for courts to make decisions. Here are a few new elements to consider:

Gendered pronouns and definitions. Ideally, your estate documents should use specific names of individuals, not pronouns. We live in a fluid society and using pronouns could lead to unnecessary complications.

Recognize ART and its implications. If there are children conceived by ART, they need to be explicitly included as children of the family. DNA testing can result in a child inheriting assets from a parent they never knew. It may be wise to exclude biological children, parents or siblings who do not have a relationship with the family.

Trust Protector/Trust Decanting. By including provisions that permit trusts to be decanted, that is, transferred from one trust to another, your estate planning attorney will create flexibility to allow a trust protector (a non-fiduciary appointment of a third party) to make changes. The selection of the trust protector is particularly important, as they could have a large impact on the overall plan.

Marriage, non-marital relationships, divorce, remarriage. An estate plan needs to prepare for future changes with precision and flexibility. Protecting the family, its privacy and dignity can be done by limiting the information in the last will, which becomes a public document. While we can’t know what the future holds, we can plan for change.

Prenuptial agreements. State laws vary on what is acceptable and procedurally necessary for a prenup to be enforceable. Typically, the agreement must be voluntary and include full disclosure of both parties’ financial situation. In some states, post-nuptials can be prepared, if the parties can’t agree on the document before they are legally wed.

Divorce creates special estate planning issues. Beneficiary designations need to be changed for life insurance, IRAs and other non-probate assets. Take affirmative steps to ensure that ex-spouses, or soon-to-be exes are removed as beneficiaries on all accounts, including pensions and insurance plans subject to ERISA.

Cohabitating couples. Marital gifts are tax free, but that is not the case for people living together. Estate planning and tax planning needs to be done, so the surviving partner is taken care of. This may include the creation of a cohabitation agreement, similar to a prenuptial agreement.

Planning for sickness and death. Explicitly stating wishes for end-of-life medical treatments, including feeding tubes, respirators, heart machines, etc., is step one in having an Advance Medical Directive created. Step two is deciding who is empowered to make those decisions. Someone who is unmarried but has a partner or a second spouse needs to be authorized. Note that when an individual is hospitalized, stepparents may attempt to deny access to spouses’ children, or children may block access to a stepparent. There should also be a Do Not Resuscitate (DNR) or Physicians Orders for Life-Sustaining Treatment (POLST) in place with the person’s wishes.

Non-traditional families of all types need to protect the family with estate planning and documentation. Issues about protecting children, making health care decisions for a critically ill partner and control of assets must be addressed in a way that respects the individuals and their families while working within the law.

Reference: Financial Advisor (Feb. 2, 2021) “How to Plan for LGBTQ, Blended Families, Cohabitation, Other Nontraditional Families”

Requests for Estate Plans Reflect Fears about Coronavirus

 

“Lawyers are being bombarded with requests to write wills, update estate plans and prepare health surrogate or "pull the plug" documents, as people are confronted by the realization that they could be diagnosed with COVID-19 and dead within days.”

Estate planning lawyers have always known that estate planning is not about “if,” but about “when.” The current health pandemic has given many people a wake-up call. They realize there’s no time to procrastinate, reports the article “Surge on wills: Fearing death by coronavirus, people ask lawyers to write their last wishes” from InsuranceNews.net. Legal professionals urge everyone, not just the elderly or the wealthy, to put their end-of-life plans in writing.

The last time estate planning attorneys saw this type of surge was in 2012, when wealthy people were worried that Congress was about to lower the threshold of the estate tax. Today, everyone is worried.

Top priorities are creating a living will stating your wishes if you become incapacitated, designating a surrogate or a proxy to make medical decisions on your behalf, granting power of attorney to someone who can make legal and financial decisions and preparing advance directives, such as “Do Not Resuscitate” orders.

An estate plan, including a last will and testament (and often trusts) that detail what you want to happen to assets and who will be guardian to minor children upon your death, spares your family the fights, legal costs and hours in court that can result when there is no estate plan.

The coronavirus has created a new problem for families. In the past, a health care surrogate would be in the hospital with you, talking to healthcare providers and making decisions on your behalf. However, now there are no visitors allowed in hospitals and patients are completely isolated. Estate planning attorneys are recommending that specific language be added to any end of life documents that authorize a surrogate to give instructions by phone, email or during an online conference.

Any prior documents that may have prohibited intubation need to be revised, since intubation is part of treatment for COVID-19 and not necessarily just an end-of-life stage.

Attorneys are finding ways to ensure that documents are properly witnessed and signed. In some states, remote signings are being permitted, while other states, Florida in particular, still require two in-person witnesses, when a will or other estate planning documents are being signed.

There are many stories of people who have put off having their wills prepared, figuring out succession plans that usually take years to plan and people coming to terms with what they want to happen to their assets.

Equally concerning are seniors in nursing homes who have not reviewed their wills in many years and are not able to make changes now. Older adults and relatives are struggling with awkward and urgent circumstances, when they are confined to nursing homes or senior communities with no visitors.

Reference: InsuranceNews.net (April 3, 2020) “Surge on wills: Fearing death by coronavirus, people ask lawyers to write their last wishes”

 

Estate Planning Checklist, Especially for Procrastinators

“Nobody likes to think about dying. However, it happens whether we prepare for it or not.  If you don’t do some advance planning, it can cause even more longer lasting pain and grief, not to mention money and strained relations for your loved ones.”

Many people don’t think of themselves as having an “estate.” However, a house, car, savings account, life insurance, and all the possessions you own are an estate. If, after years of procrastinating, you finally did the right thing and had an estate plan created with an experienced estate planning attorney, is there anything else you need to do? Yes, says Federal News Network in the article “Good at putting things off? Here’s the last checklist you’ll ever need!”

Where should you keep your estate planning documents? These documents need to be kept in a secure location that is known to the people who will need access to them. A will might be kept at home in a fire and waterproof safe, or at your attorney’s office. Each estate planning attorney has his or her own process and can make recommendations. A will placed in a safe deposit box may create huge headaches, if the box is sealed upon death. Remember that people will need easy access to some documents, like a Do Not Resuscitate, or Medical Health Care Proxy, so they could be stored somewhere in the home where they can be grabbed in an emergency.

Who should have a copy of my estate plan? This is a personal preference. Some people give a copy to all heirs and their executor. Others prefer to keep it private. It is essential that the person who will be your executor knows where your will is and can get access to it quickly.

Update beneficiary designations. Many assets are governed not by the will, but by the beneficiary designations on the accounts. That may include retirement accounts, annuities, IRAs, life insurance, and possibly bank accounts and investment accounts. Check them every few years, especially if there have been divorces, marriages and new members added to the family.

Review how your assets are titled. If there are assets owned as “joint with right of survivorship,” they will not pass through probate and will become owned by the joint owner upon death. Sometimes this works well for large accounts, but sometimes it backfires. Talk with your estate planning lawyer.

How long does my estate plan last? An estate plan does not have an expiration date.

When should I amend my estate plan? Anytime there is a large change in the law, as has recently occurred with the passage of the SECURE Act, the estate plan should be reviewed. The SECURE Act has changed the rules about IRA distributions for heirs. Anyone with a sizable IRA should review their plan.

Any time there is a large event in your life, is another time when your estate plan should be reviewed. Those events include a death, birth, marriage, or divorce. If the person you had named as your executor or who had been given Power of Attorney or Health Care Proxy is no longer in your life or is no longer trusted, you also want to review and change these documents.

Reference: Federal News Network (Feb. 5, 2020) “Good at putting things off? Here’s the last checklist you’ll ever need!”

 

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”