Tag Archives: Estate Planning

I’ve GOT a will…

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.

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Digital Asset Planning

Usually when you visit an estate planning attorney, there is a LONG form to fill out describing family, last wishes, assets and liabilities, and who should be your executor, trustee, or guardian of minor children.  There are often conversations about health care choices, nursing homes, and how the primary residence should be owned.

When was the last time your attorney asked you to write down your Facebook username?  Probably never.  In our rapidly changing relationship with technology, what we own and how we own it is also changing.  I heard on the radio this morning that 60% of bills are paid on-line now (this is why the U.S. Post Office needs to shrink).

Think about how that will affect the person who probates your estate…We used to hope that there would be an organized file with bills and account numbers, we’d count on the mail coming with statements and other account numbers.  How do we find the electronic accounts that “Aunt Edna” kept on her office computer?  How will we find the beautiful photo albums that mom kept in her Flickr account?  What about the software that has three years left on its license – who owns that, and what is it worth?  How on earth do you cancel the monthly Xbox Live account?  (Anyone who can provide this information to currently living mothers will also score some major points!)

Let’s get started on our digital asset planning.  I’ve got another long form that I’m happy to e-mail to anyone who requests one.  Please put “digital asset planning” in the subject line and send a request to bridget@bmurraylaw.com.

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Do we REALLY need two witnesses?

Going through the correct procedures of witnessing and notarizing estate planning documents can seem onerous, but skip it at your peril.  I recently read this in ElderLaw Answers…

 

 

Texas Attorney Disbarred for Attempted Theft Through Improper Will Filing

 

A Texas appeals court affirms an attorney’s disbarment for attempting to steal from an elderly woman’s estate by filing a will that had not been properly witnessed or notarized. Olsen v. Comm. for Lawyer Discipline (Tex. App., 5th Dist., No. 05-09-00945-CV, Aug. 9, 2011).

In 2002, Mary Ellen Logan Bendtsen executed a will that left her entire estate to her daughter and only child, Frances Ann Giron, and named Ms. Giron as executor of Ms. Bendtsen’s estate.  Following a fall in early 2005, Ms. Bendtsen, then 88 years old, was admitted to a hospital where a psychiatrist determined that she suffered from dementia.  While in the hospital, Ms. Bendtsen was visited by attorney Edwin C. Olsen IV and she executed a new two-page will that he had prepared which replaced Ms. Giron as executor and sole beneficiary of her mother’s estate and named a new executor and beneficiaries.

Ms. Bendtsen died on March 2, 2005, and within hours Mr. Olsen filed an application for probate of the new will on behalf of the new executor.  He attached to the application the two pages signed by Ms. Bendtsen and a one-page jurat signed and notarized by a notary.  Ms. Giron filed an application for probate of the 2002 will and a petition contesting the new will’s validity.  Subsequent evidence revealed that Ms. Bendtsen had not signed the will in the presence of both witnesses and that the notary, despite language in the jurat to the contrary, had not witnessed Ms. Bendtsen sign the will and had not signed and notarized the jurat in her presence.  The probate court set aside the 2005 will and admitted the 2002 will to probate.

Ms. Giron then filed a complaint against Mr. Olsen with the state bar.  A trial court granted the Commission for Lawyer Discipline’s motion that Mr. Olsen violated various rules of professional conduct and had committed the criminal offenses of attempted theft and securing execution of documents by deception.  The trial court later entered a final order permanently disbarring Mr. Olsen from practicing law in Texas and ordered him to pay the commission’s attorneys’ fees and costs.

On appeal, Mr. Olsen acknowledged that the jurat falsely stated that Ms. Bendtsen had signed the will in the presence of the notary.  However, he argued that the filing of the three-page will with the notary’s jurat instead of only the two-page will signed by Ms. Bendtsen was not done for dishonest reasons but rather to accommodate the notary, who had refused to go to the hospital to notarize the document.

The Court of Appeals of Texas, Fifth District, affirms Mr. Olsen’s disbarment.  The court concludes that he failed to raise a genuine issue of material fact that would preclude summary judgment on the commission’s claim that by filing the 2005 will and jurat, knowing them to include false information, he violated the rules of professional conduct relating to honesty, deceit and making false representations to the court.

For the full text of this decision, go to: http://www.5thcoa.courts.state.tx.us/cgi-bin/as_web.exe?c05topin.ask+D+769150

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Capacity–Can she really make that decision?

Capacity Requirements

Proper execution of a legal instrument requires that the person signing have sufficient mental "capacity" to understand the implications of the document. While most people speak of legal "capacity" or "competence" as a rigid black line–either the person has it or doesn’t–in fact it can be quite variable depending on the person’s abilities and the function for which capacity is required.

One side of the capacity equation involves the client’s abilities, which may change from day to day (or even during the day), depending on the course of the illness, fatigue and the effects of medication. On the other side, greater understanding is required for some legal activities than for others. For instance, you need to have a higher and clearer amount of “capacity” to enter a contract than to write a will. 

Capacity to make a will was summed up by the Massachusetts Supreme Judicial Court:

Testamentary capacity requires ability on the part of the testator to understand and carry in mind, in a general way, the nature and situation of his property and his relations to those persons who would naturally have some claim to his remembrance. It requires freedom from delusion which is the effect of disease or weakness and which might influence the disposition of his property. And it requires ability at the time of execution of the alleged will to understand the nature of the act of making a will.

This is a relatively "low threshold," meaning that signing a will does not require a great deal of capacity. The fact that the next day the testator does not remember the will signing and is not sufficiently "with it" to execute a will then does not invalidate the will if he understood it when he signed it.

The standards for entering into a contract are different because the individual must know not only the nature of her property and the person with whom she is dealing, but also the broader context of the market in which she is agreeing to buy or sell services or property.  This is a more long range kind of understanding, and requires a more complex ability.

While the standards may seem clear, applying them to particular clients may be difficult. The fact that a client does not know the year or the name of the President may mean she does not have capacity to enter into a contract, but not necessarily that she can’t execute a will or durable power of attorney. The determination mixes medical, psychological and legal judgments. It must be made by the attorney (or a judge, in the case of guardianship and conservatorship determinations) based on information gleaned by the attorney in interactions with the client, from other sources such as family members and social workers, and, if necessary, from medical personnel. Doctors and psychiatrists cannot themselves make a determination as to whether an individual has capacity to undertake a legal commitment. But they can provide a professional evaluation of the person that will help an attorney make this decision.

Because you need a third party to assess capacity and because you need to be certain that the formal legal requirements are followed, it can be risky to prepare and execute legal documents on your own without representation by an attorney.

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Tell me again why I should do my estate plan?

Everyone has a different reason for beginning, updating, or implementing an estate plan.  Usually one very specific reason.  For some, it’s the birth of a child and the need to secure their future.  For another it might be a divorce and the need to separate in life and in death.  For a third, it’s the death or illness of a loved one that makes a client realize that planning can make a death either easier, or much harder for their family members.

For others it’s a chance encounter or event.  I have some friends who were first time homebuyers, excited about a great home, and in a hurry to move in with their young family.  Sadly, the elderly owner of the home passed away two weeks before the closing.  This could have completely derailed this family’s plans, but the home was held in a trust.  The home did not need to go through probate since it was legally owned by the trustees.  Because of this, the closing could continue, and the heirs and the family were able to finish the transaction quickly and efficiently.  You can be sure that the young family was much more enthusiastic about good estate planning once they had seen it in action.

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Will Basics

What exactly is a will, and what does it do? 

A will is a document that disposes of a person’s property after death.  In addition, it names fiduciaries, including an executor, maybe a trustee, and a guardian of your minor children.  A will can spell out specific gifts (I give my engagement ring to my granddaughter Alice); charitable bequests (I leave $500 to the First Parish Church of XYZ); and dispose of whatever is left in the way that you direct.

A will comes into effect at the death of the testator (person making the will).  Prior to death, the testator can change or amend their will at any time, presuming that they remain mentally competent.  A will must be executed EXACTLY according to state law, there is very little wiggle room to accommodate mistakes in execution.

In Massachusetts, once you pass away, your original will must be located and presented to the probate court of the county you live in within 30 days.  This is important for two reasons.  The first being that someone needs to know where you keep your original documents.  A safety deposit box is not a good place for an original will, unless someone else has access to it.  (This means they’re “on” the safety deposit box, a notation in a power of attorney will not work once you have passed away).  The second important point is that time is, as they say, “of the essence”.  While probate can seem like a long process, getting started should happen pretty quickly.  Once your will is filed, it becomes a public document.  Under no circumstances should you put private financial information into this document!  I say this because there are “do it yourself” kits that insert social security numbers into the will, which is obviously an unwise thing to do.

So here is your “to do” list:

— Think about guardians for my children

— Who would I want to be the executor of my estate?

— What charities or special bequests do I want named in my will?

— Have a will drafted by an attorney I trust

— EXECUTE MY DOCUMENTS

— Put them somewhere safe, and tell someone where they are

 

I will write about the other documents in a basic estate plan in later posts.

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Free Medicare Preventive Care Has Kicked In

 

One of the benefits of the health reform law took effect January 1, 2011: free preventive services for Medicare recipients. Under the law, people with regular Medicare will no longer have to pay a copay, coinsurance or deductible to receive preventive services that are highly recommended by the U.S. Preventive Services Task Force — services that include screenings for breast cancer, colon cancer, diabetes and heart disease, as well as smoking cessation counseling. Private Medicare plans (also known as Medicare Advantage plans) may still charge for these services, but many do not.

Also under the health reform law, Medicare Part B beneficiaries will now receive an annual wellness visit free of charge. During this yearly visit, your doctor or other health practitioner recognized by Medicare (such as a nurse practitioner) will update your medical history and current prescriptions; measure your height, weight, blood pressure and body mass index; create a screening schedule for the next 5 to 10 years and screen for cognitive issues. And Medicare now pays in full, without patient co-pays or deductibles, for the initial "Welcome to Medicare" that Medicare has offered since 2005 to beneficiaries within 12 months of their becoming covered under Medicare Part B. (For a CommonHealth article on what to expect from a wellness visit and how to get the most out of yours, click here.)

"Preventing diseases that can be prevented, and detecting others at earlier, more treatable stages, are among the keystones for transforming Medicare," said Jonathan Blum, deputy administrator and director of the Center for Medicare at the Centers for Medicare and Medicaid Services.

"By eliminating the beneficiary’s out-of-pocket costs for most preventive services, we are removing a barrier to access and paving the way for improved health for seniors and people with disabilities who rely on Medicare for their health coverage."

For a detailed list from the Medicare Rights Center of preventive services that will no longer require out-of-pocket payments,click here. For more on Medicare’s preventive services from the Medicare Rights Center, click here, and from the Center for Medicare Advocacy, click here.

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Massachusetts Pet Trust Legislation signed into law

On January 7th, Governor Patrick signed legislation allowing funds to be set aside for the care of pets.  A pet owner may establish a fund and designate a trustee so that in the event of death or incapacity, the pet owner can be certain their pet will be cared for.  Massachusetts is one of 44 states to enact pet trust legislation; this is good news for pets, for pet lovers, and for the shelters in our community who traditionally care for pets after the owner has passed away.  Our own Bruce Tarr was one of the co-sponsors of the bill –many thanks to him, to those that drafted and moved this through the legislative process, and to the Governor for signing it. 

 

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Massachusetts Health Care Proxies FAQ

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1.  What is a health care proxy? 

A health care proxy names the person that you want to make your medical decisions if  you become incapacitated.

2. Is a health care proxy the same as a living will?

No.  A living will is a document that gives instructions about your medical wishes.  In Massachusetts, the health care proxy has this power, and while it it easier for everyone if your wishes have been communicated in writing, the health care proxy is not bound by your living will.

3.  Can I name both my children as proxies?

No, you can only have one health care proxy at a time.  You may name successors if the first person becomes unavailable to serve as your proxy, but only ONE person can act as your agent at one time.

4.  When does a health care proxy go into effect? 

Usually your doctor “activates” your health care proxy by determining that you are unable to make your own decisions.  This can happen, for example, to an elderly person who is suffering from dementia, or a young person who is unconscious after an accident or other illness.

5.  Can I revoke my health care proxy?

Yes, you can revoke your health care proxy at any time.  In addition, even if a doctor has determined that you are incompetent, if you don’t agree with your proxy’s decisions, YOUR decisions and wishes must be respected unless a court has determined that you are incompetent.

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What about my pet?

I’ve got a great dog, a turtle who will live for 80 years, and three opinionated cats.  Right now there are several household members who will take care of them should I get in an accident, or have to go into the hospital.  What should someone who lives alone be considering for their pets?  I can’t imagine anything worse than coming from the hospital to find malnourished (or worse) pets.  One tool is a Pet Care card.  Carry it in your wallet to let people know who to call if you wind  up in the hospital .  Also consider posting one on your fridge for first responders in the case of a medical emergency at home.  Send me an e-mail with your mailing address, and I will send you the card that I give my clients.

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