March 2011 Archives

March 23, 2011

What to Do with Power of Attorney and Health Care Directive?

courthouse.jpgDear Liza: I created the Durable Power of Attorney and Health Care Directive (Living Will and Power of Attorney) documents using Quicken WillMaker software.  I recognize that I at least need to have them signed/notorized by the parties identified in the documents.  Now what do I do? Am I required to register these or send these documents to a local authority to make them "official"?  I'm sure it's more than just having them saved in my safe deposit box.  So, guess what? Actually you generally DON'T record these documents or register them with any state authority. The only time I've ever done so is when a client needs to sign a property deed using their authority as an Agent under a Power of Attorney--in that case, you need to record the Power of Attorney in the same county as you've recorded that deed. But, otherwise, you can give a copy of your Health Care Directive to your doctor and a copy of your Power of Attorney to your bank (if they'll accept it). You definitely should make sure that your named Agents have copies. These documents, which give a third party the power to act on your behalf if you're unable to do so, are generally simply used when needed. If your Agent for Property, for example, needs to transfer money from your bank account, they'd take the Power of Attorney to the bank at that time and get the job done; if your Agent for Health Care needs to make medical decisions for you, they'll need to show the Health Care Directive to the hospital or doctors in charge of your care. I do know of two states that require a Durable Power of Attorney to be recorded to be valid upon your subsequent incapacity: North and South Carolina, but unless you live there, these documents do not need to registered to be 'official," just properly signed and notarized (or witnessed, depending upon your state's rules.) Nolo does a really great job at keeping up with the rules in all 50 states, so I'd also check WillMaker's help section to see if it has specific rules for your state.
March 20, 2011

Finding a Professional Fiduciary

professional fiduciary.jpgDear Liza: We're in the process of establishing a Child's Trust as part of our estate planning; the Trust would exist until our daughter turns 35 (32 years from now; we're both about to turn 50).  We have created a list of four Successor Trustees, but each one is either our age or slightly older. Nolo's advice is to list a last choice a "private trust company." What's that?  It's great that you're thinking about how old your trustees are going to be when you daughter is 35--sadly, our trustees age right along with our kids. I am not familiar with the term 'private trust company' but I think Nolo may be suggesting that you consider naming a private fiduciary as a backup trustee. This is someone who is licensed to serve as a trustee, but is not a bank or a large corporate institution. Such people are licensed in California via the Department of Consumer Affair's Professional Fiduciaries Bureau. Alternatively, you might consider allowing your daughter to become the Trustee if none of the above can serve and she is over a certain age, say 28. (Serving as her own Trustee would give her management control over the trust, but still protect the trust's assets from her creditors or a bad marriage.) You might also, though, check with the bank where you do most of your business, you might find that their rates are competitive for trust services.


March 18, 2011

Wills and Children from prior marriages

  Will being signed.jpgDear Liza: I am writing my first Will. I have two children with my current husband. He has one surviving child from his first marriage. I don't want her to receive anything if my husband dies before I do, I just want my two kids to inherit what I leave behind. I am not sure what to do? I think that the best thing to do in a situation like this is for your Will to be super clear. Name your children with your husband. State that he has a daughter from his previous marriage. Then make sure that your Will says that you have not adopted this child, do not have a parent/child relationship with her and that she is not to be considered a child for purposes of your Will, but that this term should only apply to your two, mutual children. Better to say this in the Will itself and not rely on anything separate from it, since things like that can get lost. If you are using software to do this Will, only list your two children. Usually you can add a new paragraph on your own, somewhere, to acknowledge this unadopted step-daughter and clarify your wishes with respect to her. If the software won't let you do this, see a lawyer who can draft just what you need.

March 16, 2011

Inheriting with a sibling

  siblings.jpgDear Liza-my boyfriend and his sister inherited a small parcel of raw land in the Hamptons, NY.  His sister seems to think she will get a princely sum for the parcel and refuses to consider a reasonable offer, even ignoring what the local real estate agents say it is worth.  My boyfriend wants to sell the property but his sister is adament about waiting and getting an unrealistic price.  Does my boyfriend have a choice--does he have to go along with his sister or does he have any rights to say No, sell it for what the real estate agents assess it? Oh, siblings can be so much fun! So, here's the thing--I don't know how your boyfriend and his sister own that property together. There are two likely ways that they could own it: tenants in common or as joint tenants. Both mean that each owns 1/2 of the property. Your boyfriend should consult with a local real estate lawyer to see what his rights are with respect to his half. It's probably possible he could force a sale with respect to his half if he really wants to. At the very least, that would get his sister's attention, if not cooperation.
March 13, 2011

Self Serving Blog Post: If you like this blog, let Lexis/Nexis know

estate-probate-elderlaw-nominee-220x180.JPGHi Dear Readers:

If you like my blog, please click on the Lexis/Nexis link to the right of this post (not the graphic to the left here) and nominate it for one of their Top 25 Estate Planning Blogs for 2011. Thanks so much!

March 13, 2011

Special Needs Trusts

downs syndrom girl.jpgDear Liza: we had a special needs trust drawn up by a lawyer for our disabled daughter who has turned 21 and is entitled to an annuity.  Our lawyer is stating in
the trust that any benefits received by SSI or medicare throughout her life
must be reimbursed to the state (new york) upon her death or upon
termination of the trust.  We want her to be entitled to government benefits
so that she can stay active (day programs, job coaching, etc) but we were
surprised to read in the drafted trust document that any of these benefits
would have to be "paid back".  Is this true in New York State?
If the money that you are going to place in that Special Needs Trust is her money, and not a gift from a third party (and this is often the case if there's an accident settlement or the like), then, yes, your lawyer sounds as if he or she is setting it up correctly. A self-settled Special Needs Trust requires, by federal regulation, that the assets left at the end of the beneficiary's life must be paid back to the state Medicaid agencies that provided service. Here's a link to a helpful site, The Learning Disabilities Association of America, read the entry on Restrictions on Self-Settled Special Needs Trusts.