As I mentioned in a previous post, as a parent selecting a guardian for your children is one is the hardest steps in creating an Estate Plan. Even the thought of not being around to raise your children is enough to solidify the hesitation of creating an Estate Plan for many people.
Many parents begin planning for their child’s future even before they are born. An Estate Plan should be a facet of this planning. Because selecting a guardian can be overwhelming, I advise my clients to start small.
Make a list of traits that you want to have in a guardian, as well as a list of values that are important for you to pass on to your children. It also helps to rate the traits and values in terms of their importance to you. I recommend having each parent make his or her own list and then discuss them together.
People put off drafting their Estate Plans for a variety of reasons. Over the past twenty-five years in my Culver City office I have heard everything from “Estate Planning is only for the wealthy, not me” to “if I make a plan, I will die because the plan is already in place.” These and other Estate Planning misconceptions are for another post, for now I would like to focus on Estate Planning for parents.
One of the largest obstacles that keeps parents from meeting with an Estate Planning attorney is the issue of guardianship. As a parent choosing the best school, packing the perfect lunch, and checking for monsters under the bed are all standard, but entertaining the idea of who you would select to do these things if you could no longer do them is an emotional process. For anyone, thinking about the decisions that they would make for their loved ones after they have passed is difficult, in many respects this becomes even harder as a parent.
Almost every client asks me where they should keep their Estate Planning documents. And every time I explain that there is not a perfect answer. Historically, many people left the originals with the attorney who drafted the documents. I am not a proponent of that, and in fact retain only two client’s original documents. Both of those clients requested that I do so.
I think that one of the reasons some Estate Planning attorneys keep the original documents is because it insures that they would get future business from the client's family when the Trust was executed. I recommend that my clients keep their Living Trust; Wills and other Estate Planning documents in an easily accessible place. Moreover, I suggest that they inform their successor trustee/executor where they are kept.
For the most part, the results of our work are not seen by our clients. When we prepare an Estate Plan for someone, it is generally not implemented until the client’s incapacity or death.
What other professions is that true about? You go to the accountant or to the doctor, or to the dentist, or to the mechanic – well you get the picture – and you see the results fairly quickly. When you ask your friends for recommendations or read recommendations on the internet for those professions and most others, you are talking with people who have experienced the results of the work – not just the process of the work.
Elder abuse can take a variety of forms. Family members, including spouses, can be guilty of elder abuse.
This can include the conditional and physical abuse that most people think of, as well as having the elder person directly give them assets; make them the power of attorney; and or rewriting estate planning documents to provide (more) for the abuser.
However, a lot of elder abuse is financial and committed by people who are not related or close to the individual. Caregivers make up the largest portion of these individuals. Obviously, they need to be screened. Agencies are helpful. However, they are not perfect. You need to talk to the candidate’s references.
In my practice, this is important. I certainly do not want to be preparing Estate Planning documents for clients that are incompetent. By definition, someone who is incompetent cannot be signing a Trust, a Will, a Power of Attorney, an Advance Health Care Directive, or any other legal or Estate Planning document.
In California, our probate code sets forth the criteria to be used in determining whether someone is incompetent. (The probate code deals with a lot more than Wills and includes Living Trusts.) As an Attorney who prepares Estate Planning documents, it is important for me to be confident that the client is competent. This is true, because some day I might be required to give a deposition explaining why I believed the client was competent at the time of the documents execution.
Have you thought about that question? When a client comes to see me as there Estate Planning attorney about preparing an Estate Plan including a Living Trust, a Will, a Power of Attorney, Advance Health Care Directive, etc., it is something that I have started to ask about.
Honestly, I have not done anything myself yet. As many of us do, I have emails sent to me at four sites; I have financial records sent to me from a variety of sources – and they all require a password. I have business records and personal records all over the place. What about the fun things? Facebook? Linked In? or whatever follows?
For virtually every client that comes to my office to do Estate Planning including their Living Trust and Will, I prepare an Advance Health Care Directive. In the document, the client gives a power of attorney to someone to make medical decisions in the event that they are no longer able to make their own medical decisions. In another part of the document, the individual makes known his or her thoughts concerning life support.
I think that it is important for people to know of an issue that many Estate Plans do not adequately address and that is: what is going to happen to their vacation home, cottage, cabin or camp?
Many clients come in to the office and when I ask about it they think they will just give it to the kids. Usually the clients tell me that their kids will know how to handle it and that they get along fine. Maybe they do and maybe they don’t. Let us say they get along perfectly. What happens if one of them cannot meet the financial obligations of the cottage? What if one of them has creditors or a bankruptcy? What happens if one of them gets divorced?
As virtually everyone reading this knows, the United States Supreme Court ruled that same sex marriage is legal in all 50 states and the District of Columbia because of the Fourteenth Amendment’s equal protection clause.
From an Estate Planning perspective for same sex individuals who are contemplating marriage, it really does not change all that much. However, there are a couple of things that can be stated. The first is that the unlimited marital deduction now applies to same sex marriages. This is really only relevant to those couples that have estates worth over $10,860,000 dollars.
On the other hand, there are advantages that are available from an Estate Planning perspective to not being married – whether opposite sex or same sex. As often is true in life, there are two sides to the coin.
I (like many others) think of millionaires as being financially savvy, to make a million or more, they must be doing something right. A recent survey by The Spectrum Group, conducted by CNBC revealed that 38 percent of the 750 millionaires surveyed do not have an Estate Plan.
When clients decide to do a Living Trust or a Will, one of the questions they have to answer is who will be the executor or successor trustee?
For some, the answer is obvious. It might be a son or daughter. However, for many the question requires serious thought. One needs to consider not just who would be the best person (or bank or trust company) at the current time, but who will be the best when the trustee actually has to function. That may or may not be the same person or institution.
As a society driven by youth, and surrounded by ‘the rich and the famous,’ anti-aging miracle creams, and the ‘selfie’ phenomena, growing old has innately become a topic to be avoided. Quite simply, the prospect of death, wrinkles, and nursing homes is enough to keep just about anyone from planning for their last stages of life. However as psychological research regarding the deterioration of the human mind mounts, it becomes more and more vital that planning for the future begins before it’s too late. While it is well known that an aging brain puts us at a disadvantage, few people connect this with the decline in their ability to maintain their personal finances. The catch being that by the time this issue is brought to light, it is more often than not met with already developing problems.
Estate Planning and Probate Attorney, Manhattan Beach Local, Sports Enthusiast