Do you have a child in college? Did you realize that if he or she winds up in the hospital that you do not automatically have the right to direct the medical attention your child receives, or even to speak with the physicians? This comes as a shock to most parents. Everyone over 18 should have a Health Care Proxy and HIPPA release form. These documents tell the doctors who can see medical records, who can speak with physicians, and who can make medical decisions if the patients is unable to do that himself. Just because you pay the bills, just because you’re his mom, just because it’s the “right” thing does not mean the hospital needs to respect this. Get the documents in place; it is easy to do and if there is ever an emergency, you will be glad you did. The college might have forms you can use, and your estate planning attorney can certainly help you.
I’m almost 50, I use computers every day. My life is more organized and more efficient because of on-line banking, automatic bill pay, PayPal, and my smart phone. What happens to my life if I get hit in the head and forget my passwords? Have you ever forgotten the secret questions for the ITunes account you opened 8 years ago? Have you ever had a small child “re-set” your security code on your Iphone? Have you had a loved one pass away and have no way to access their email account or banking services? If any of these things have happened to you, you know that digital assets are an important part of life today.
All these services, data, and passwords are part of your digital assets. Your music collection on ITunes is a digital asset, as are photos and albums you store on the internet, blogs you write for personal enjoyment or for business, content that is published on YouTube or on Twitter. In many cases, these assets are licensed to you personally. If you die, your heirs may have not rights to them. If you become incapacitated and no one knows about them or how to access them, they may be lost. It makes sense to keep track of passwords, account numbers and names, security questions, where your domain is hosted, what email it was associated with when you set it up, and much more. It may also make sense to designate someone who can control these assets if you are not able to. Many estate planning attorneys are adding rights to digital assets to durable powers of attorney. Others are specifying what happens to digital assets in wills or trusts. Everyone should have a digital asset organizer that you update on a regular basis, preferably kept somewhere that a friend or loved one will be able to find it if they ever need to.
Clients often ask, how often should I review my estate planning documents? The best answer is, when anything major changes in your life, when there are changes to the tax laws, changes with estate related laws, or when you have moved from one stage of life to another.
If you made your will when your children were young and named guardians who would take care of them and handle any assets, and now you have young adult children, the guardians will no longer be relevant. But while we hope our 22 year old children can physically fend for themselves, do we want them inheriting a chunk of money outright? Perhaps not; perhaps a review of your documents is in order. If these same children are now 18 and 19, do you have health care proxies for them? Will the college health service be authorized to speak with you if there is an accident or illness? Time to get some health care proxies in place.
Did you have a power of attorney, health care proxy, or other document drawn up when you were close to someone who is no longer in your life? While a divorce or legal separation may take the spouse out of your documents, breaking up with a significant other does not have the same impact. They could still be in your plans, perhaps in a way you would no longer be comfortable with. (I personally would not want any ex-boyfriends showing up in my hospital room to make decisions for me while I was unconscious!)
Has the probate code just undergone a major overhaul? (Yes, if you live in Massachusetts). Are Federal tax laws changing? (Not really, but we get to worry a lot about that).
Really, there is never a bad time to call your estate planning attorney and just check in as your life changes.
PS: If you move assets into an irrevocable trust, check with your tax specialist about whether you need to file a gift tax return!
Statistically, women outlive men. That means that the estate plan, or lack of estate plan, will often be played out by us. If there is no will, no power of attorney, no trust protecting our assets, women are often left holding the bag, with no good results. Often women do not manage the money side of things, and when pushed into that role by the illness or death of a spouse, all the grief and dislocation can be magnified by a sense of panic – needing to deal immediately with complex legal and financial concepts which can have long term consequences – sometimes impacting the rest of our lives.
Educate yourself, find an estate planning lawyer that you trust, and who can explain your options. Find a financial planner, again, someone you trust, who will take the time to explain things until they really make sense. Know who you want to call when you need them; don’t be in the position of having to find an advisor when you are desperate. Put a plan in place. This can be easier than you think, and while there will be some costs involved, consider what could happen without any planning. An old plan (you know the one you did when the kids were little) may not work now that you are 62 and thinking about retirement.
Start planning now, before there is a crisis, and save yourself money, stress and time.
I know that neither of these topics is particularly cheery, but in some cases they do go hand in hand. If your marriage is going downhill, and you anticipate a divorce, or are in the process of getting divorced, it makes sense to take two immediate steps:
Name someone other than your spouse as your healthcare proxy; and
Revoke any durable power of attorney that allows your spouse to sign papers on your behalf, and designate a new power of attorney to act for you if you are incapacitated.
These two steps should be taken right away. As long as you are still legally married, these documents generally continue to be in effect, and as you probably know, a divorce can take a long time to finalize.
Comprehensive estate planning is important, but it is unrealistic to think that most couples can deal with it while going through a separation or divorce. Estate planning can wait a bit, but these other steps cannot wait. My office is happy to assist you with this, and credit the amount towards an estate plan, or if you are working with a family law attorney, he or she should be able to assist you with a new health care proxy and power of attorney.
But I made it two spouses, three children, and two businesses ago. When your life changes, your estate plan should ideally keep up with those changes. You do not need to revise a will every time something changes in your life –many documents are drafted to take some changes into account. However, as part of your financial planning, you should revisit your estate plan every 3-5 years, and definitely in the case of a divorce or marriage.
Divorce: In some states marriage or divorce nullifies a will, health care proxy or power of attorney. In other cases it may not. If you and your spouse are on good terms and you want him or her to make the decisions about your medical care, it is best to revise your health care proxy to make it clear that this is your desire. Similarly, you may not want your soon to be former spouse to have the ability to write checks from your bank account, but even if divorce nullifies a power of attorney, simply being in the process of divorcing will not. Revoke or change your health care proxy, will, and power of attorney if you realize that your spouse is no longer a trusted partner and you are heading your separate ways.
Wills, trusts, health care proxies and powers of attorney are powerful documents; take a look at them from time to time and be sure they are still relevant to your life.
One of the scariest scenarios we face is the prospect of no longer being able to make our own decisions and to think for ourselves. Often this is a process of gradual decline, and either we, or those close to us, can see the changes and understand what is happening. If you have not done advanced planning, that’s a good time to get moving. There are some fairly straightforward documents that you can draft and execute which will allow those you love and trust to make important decisions.
1. Health Care Proxy: this document names the person who can make medical decisions for you in the event that you are unable to make them yourself. In Massachusetts, only one person can be named at a time, but you can have successor agents in case the first person is not available. I recommend that everyone have a Health Care Proxy (including young adults so that doctors must listen to their parents, or to the person they have designated).
If you do not have a Health Care Proxy and there is a disagreement about your care, it is possible that a Guardian will have to be appointed by the probate court. This is a process that can be time consuming, complex, and expensive. In the end, the court decides who will make decisions about your care, not you.
2. Durable Power of Attorney: this document names a person who can sign documents on your behalf, and who can make financial and administrative decisions on your behalf. This can be effective now, or it can come into effect upon your incapacity.
Like a Health Care Proxy, if you do not have a Durable Power of Attorney, and become incompetent, a family member or caregiver will have to go to court to be named to represent you. This person is called a Conservator, and this process, like naming a Guardian, requires court involvement and much expense. It also means that the court makes the final decision about the person best suited to manage your affairs. Judges are wise and thoughtful, but they don’t know you or your family members the way that you do – don’t you think you’ll make a better decision?
Everyone over the age of 18 should have a health care proxy. Period. Everyone. That means you, too. A health care proxy appoints the person of your choice to make health care decisions for you if you are unable to do so. If your college student has a car accident and is taken to the local hospital, you want to be called, consulted, and listened to. A health care proxy can assist in this process. (Have him or her keep a copy in the glove box). A beloved family member is fading from a variety of age related illnesses, a health care proxy will help her get (or not get) the type of treatment SHE would choose. Will your frail parent want to be resuscitated if it will result in pain, broken ribs, and the extension of their terminal illness? Are you a “keep on trying no matter what!” type of person? Make that clear to your health care proxy.
A health care proxy in Massachusetts does not replace a living will. It appoints one person who can direct the medical decisions of the person who has made the document (principal). The best way to assure that your wishes are honored is to speak with the person you have chosen, and have some honest conversations about your wishes, well before the need arises. What makes a life worth living, rather than simply existing in pain or incapacity? This is a personal viewpoint, and one that it’s hard to know about someone else. Two tools I use with my clients are the “What If Workbook” and “Five Wishes”. Each lays out some of the questions and decisions we face with end of life medical care.
One final point. If you want your children or spouse or best friend to be able to speak with your medical provider, they should be named in a HIPPA release form. Our privacy laws can be a great help in protecting confidentiality, but can frustrate our families attempts to understand our condition and prognosis. A health care provider may not speak to you even if you are a parent, spouse, or child without legal permission to do so.